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decision theory

A normative (1) approach to decision making based on expected utility theory, some versions also incorporating Bayesian inference. It starts from the assumption that, for any pair of ...

decision theory

decision theory   Quick reference

A Dictionary of Marketing (4 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
53 words

... theory A branch of statistical theory that enables problem-solving and which leads to decisions about the most advantageous course of action under the given conditions, particularly conditions of uncertainty. Decision theory divides decisions into three classes: 1) Decisions under certainty; 2) Decisions under conflict; 3) Decisions under uncertainty. See also game theory...

decision theory

decision theory   Quick reference

The Concise Oxford Dictionary of Mathematics (6 ed.)

Reference type:
Subject Reference
Current Version:
2021

...decision theory The area of statistics and game theory concerned with decision making under uncertainty to maximize expected...

decision theory

decision theory   Quick reference

A Dictionary of Philosophy (3 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Philosophy
Length:
82 words

... theory The theory of choices made when each option is associated with a risk, or expectation of gain or loss, where the expectation is a function of the probability of some outcome and the total gain or loss involved. Decision theory may be pursued with the aim of finding results about how decisions ought to be made (normative decision theory) or with the aim of finding out how they are actually made (empirical decision theory). See dominance , expected utility , game theory...

decision theory

decision theory n.   Quick reference

A Dictionary of Psychology (4 ed.)

Reference type:
Subject Reference
Current Version:
2015

...as z , then x is at least as preferable as z . The theory then requires a decision maker always to choose a maximally preferable alternative (which may not be unique). Many writers use the term synonymously with rational choice theory . Applied decision theory, taking into account the decision makers’ utility functions , is called decision analysis . See also expected utility theory , intransitive preferences , money pump . Compare behavioural decision theory , psychological decision theory . DT ...

decision theory

decision theory   Quick reference

A Dictionary of Social Research Methods

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Sociology
Length:
103 words

...decision theory A wide-ranging theory which attempts to capture the parameters of (rational) decision-making and which focuses on how agents make decisions when dealing with uncertainty. A central hypothesis is the expected utility hypothesis, which asserts that individuals will behave to maximize their expected utility. Empirical work has shown that various heuristics moderate the effect of expected utility on real-world decision-making. An additional complexity is whether all the possible outcomes of a decision can be formally expressed, even...

decision theory

decision theory   Quick reference

A Dictionary of Economics (5 ed.)

Reference type:
Subject Reference
Current Version:
2017
Subject:
Social sciences, Economics
Length:
164 words

...decision theory The analysis of rational decision-making. A rational decision-maker chooses between the available alternatives on the basis of their consequences. If there is certainty each alternative has a known consequence that can be evaluated in terms of the decision-maker’s objectives. In most circumstances the objectives can be summarized in a utility function . Decision theory then describes the conditions under which an optimal choice exists, and provides a characterization of the optimal choice. When there is risk, each alternative generates a...

decision theory

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A Dictionary of Statistics (3 ed.)

Reference type:
Subject Reference
Current Version:
2014

... theory A method of deciding between various alternative experiments and actions. The decision process is informed by assigning probabilities to the various alternatives and assigning costs (or benefits or utilities ) to the alternative outcomes. The decision process is governed by the wish to minimize the expected cost or to maximize the expected benefit or...

decision theory

decision theory   Quick reference

A Concise Oxford Dictionary of Politics and International Relations (4 ed.)

Reference type:
Subject Reference
Current Version:
2018
Subject:
Social sciences, Politics
Length:
77 words

... theory The theory of how rational individuals (should) behave under risk and uncertainty. One branch deals with the individual against an uncertain environment (‘Nature’); the other, game theory , with the interactions of rational individuals who jointly produce an outcome that no one can control. Decision theory uses a set of axioms about how rational individuals behave which has been widely challenged on both empirical and theoretical grounds, but there is no agreed substitute for...

decision theory

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A Dictionary of Public Health (2 ed.)

Reference type:
Subject Reference
Current Version:
2018

...decision theory A specialized branch of logic that provides a conceptual framework and formal rules for decision making. One of the pioneers in this discipline was the British mathematician Charles Lutwidge Dodgson ( 1832–98 ), better known by his pseudonym Lewis Carroll , author of Alice's Adventures in Wonderland and other works that playfully illustrate the rules of formal logic. ...

decision theory

decision theory   Reference library

Jan Narveson

The Oxford Companion to Philosophy (2 ed.)

Reference type:
Subject Reference
Current Version:
2005
Subject:
Philosophy
Length:
205 words

... theory . The abstract (or ‘formal’, or mathematical) theory of decision-making, or more precisely of rational decision-making. The decision-maker is assumed to have a range of objectives, measurable at least in terms of their rank order, though it is theorized that we can also talk of their ‘utility’ or relative degree of preferredness; but it is not assumed that one agent's utility may be directly compared with another's. Of special interest are decisions under various kinds of limited knowledge of outcomes of possible actions, such as those in which...

sensory decision theory

sensory decision theory n.   Quick reference

A Dictionary of Psychology (4 ed.)

Reference type:
Subject Reference
Current Version:
2015

...decision theory n . Another name for signal detection theory. SDT abbrev...

behavioural decision theory

behavioural decision theory n.   Quick reference

A Dictionary of Psychology (4 ed.)

Reference type:
Subject Reference
Current Version:
2015

...decision theory n. An approach to judgement and decision making focusing on subjective expected utility and on departures from normative ( 1 ) theories such as Bayes' theorem and utility theory . It was first put forward by the US psychologist Ward (Dennis) Edwards ( 1927–2005 ) in an influential article in 1954 , and many authorities interpret it to include psychological decision theory . US behavioral decision theory . Compare decision theory . BDT ...

psychological decision theory

psychological decision theory n.   Quick reference

A Dictionary of Psychology (4 ed.)

Reference type:
Subject Reference
Current Version:
2015

...decision theory n . A normative ( 2 ) and descriptive approach to judgement and decision introduced in the early 1970s by the Israeli‐American psychologists Amos Tversky ( 1937–96 ) and Daniel Kahneman (born 1934 ) and the US psychologists Paul Slovic (born 1938 ), Sarah C. Lichtenstein ( 1933–2017 ), and Baruch Fischhoff (born 1946 ). See base-rate fallacy , causal schema , conjunction fallacy , elimination by aspects , framing effect , heuristic , hindsight bias , non-regressiveness bias , prospect theory , regression...

Bayesian decision theory

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A Dictionary of Marketing (4 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Social sciences, Business and Management
Length:
46 words

...decision theory A statistical approach for quantifying trade-offs between various decisions using probabilities and costs that accompany such decisions. This technique is used by marketers (using statistics and probability) to make decisions, when there is lack of information or certainty on which to judge...

Behavioral Decision Theory

Behavioral Decision Theory   Reference library

Kazuhisa Takemura

The Oxford Encyclopedia of Political Decision Making

Reference type:
Subject Reference
Current Version:
2021
Subject:
Social sciences, Politics
Length:
12,293 words
Illustration(s):
20

...of Prospect Theory. Prospect theory combines behavioral decision-making theory with nonlinear utility theory (or generalized expected utility theory). Prospect theory was proposed initially as a descriptive theory of decision making under risk ( Kahneman & Tversky, 1979 ) and later evolved into a theory for decision making under uncertainty ( Tversky & Kahneman, 1992 ; see Vieider and Vis, this work, for a review of prospect theory research). The word “prospect” in prospect theory refers to the uncertainty of various “gambles” as seen in decision making under...

causal/evidential decision theory

causal/evidential decision theory   Quick reference

A Dictionary of Philosophy (3 ed.)

Reference type:
Subject Reference
Current Version:
2016
Subject:
Philosophy
Length:
351 words

...decision theory Suppose an agent with a set of options, who attaches a probability to various outcomes for each option, and who has a set of preferences, or a way of attaching utilities to the various outcomes. A normative decision theory then has the data from which it can recommend some option. A causal decision theory tells the agent to choose the option that (she supposes) has the best chance of bringing about the maximum utility. By contrast an evidential decision theory, also known as Bayesian decision theory, tells the agent to choose...

Prospect Theory and Political Decision Making

Prospect Theory and Political Decision Making   Reference library

Ferdinand M. Vieider and Barbara Vis

The Oxford Encyclopedia of Political Decision Making

Reference type:
Subject Reference
Current Version:
2021
Subject:
Social sciences, Politics
Length:
10,218 words
Illustration(s):
2

...prospect theory to political decisions (see, e.g., Boettcher, 2004 ; Levy, 1992 , 1997 ; McDermott, 2004 ; Mercer, 2005 ; Shafir, 1994 ; for reviews and discussions) by concentrating on the methodological challenges of applying prospect theory to political decision making. Our focus on methodological challenges makes this article especially relevant for those readers who already have some background in prospect theory. To also accommodate those readers who are novices in this area, prospect theory and expected utility theory are contrasted...

The Poliheuristic Theory of Crisis Decision Making and Applied Decision Analysis

The Poliheuristic Theory of Crisis Decision Making and Applied Decision Analysis   Reference library

Inbal Hakman, Alex Mintz, and Steven B. Redd

The Oxford Encyclopedia of Crisis Analysis

Reference type:
Subject Reference
Current Version:
2022
Subject:
Social sciences, Politics
Length:
9,120 words

...Poliheuristic Theory of Crisis Decision Making and Applied Decision Analysis Poliheuristic Theory The poliheuristic theory of decision making has been developed as a bridge between the rational choice school and the cognitive psychology school ( Mintz, 2004 ; Mintz & Geva, 1997 ; Mintz et al., 1997 ). The theory recognizes the use of poly (many) heuristics (shortcuts) in making decisions and the critical role of the political dimension in the political decision process ( Mintz et al., 1997 ). A key premise of the poliheuristic theory is that...

Rational Choice Theory in Political Decision Making

Rational Choice Theory in Political Decision Making   Reference library

Scott H. Ainsworth

The Oxford Encyclopedia of Political Decision Making

Reference type:
Subject Reference
Current Version:
2021
Subject:
Social sciences, Politics
Length:
10,910 words

...preference because everyone must accept or manage with the social outcome. 11 Social choice theory and game theory offer two (related) ways to consider the aggregation of individual rational choices into some sort of group or collective outcome. In this sense, social choice theory and game theory allow one to consider how attributes of individual decision making or rational choice theory “scale up.” Arrow’s theorem, perhaps the best-known result in social choice theory, has been interpreted to mean that individual rationality cannot ensure group rationality....

The Poliheuristic Theory of Political Decision-Making

The Poliheuristic Theory of Political Decision-Making   Reference library

Alex Mintz, Steven B. Redd, and Eldad Tal-Shir

The Oxford Encyclopedia of Empirical International Relations Theory

Reference type:
Subject Reference
Current Version:
2018
Subject:
Social sciences, Politics
Length:
9,311 words

...various elements of the theory as well as the varied subfields of political science that have been examined using poliheuristic theory. Finally, we present a case study illustrating poliheuristic theory using the U.S. decision not to use military force in Syria. Poliheuristic Theory The poliheuristic theory of decision-making integrates the conditions surrounding foreign policy decisions, as well as the cognitive processes associated with these surroundings ( Mintz & Geva, 1997 ). Put another way, the theory addresses why decision-makers make the choices...

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