scholarly journals The key to the knowledge norm of action is ambiguity

Synthese ◽  
2021 ◽  
Author(s):  
Patricia Rich
Keyword(s):  
Decision Theory ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Decision Problems ◽  
Epistemic State ◽  
Modeling Tool ◽  
Knowledge Norm ◽  
Knowledge Based

AbstractKnowledge-first epistemology includes a knowledge norm of action: roughly, act only on what you know. This norm has been criticized, especially from the perspective of so-called standard decision theory. Mueller and Ross provide example decision problems which seem to show that acting properly cannot require knowledge. I argue that this conclusion depends on applying a particular decision theory (namely, Savage-style Expected Utility Theory) which is ill-motivated in this context. Agents’ knowledge is often most plausibly formalized as an ambiguous epistemic state, and the theory of decision under ambiguity is then the appropriate modeling tool. I show how to model agents as acting rationally on the basis of their knowledge according to such a theory. I conclude that the tension between the knowledge norm of action and formal decision theory is illusory; the knowledge-first paradigm should be used to actively select the decision-theoretical tools that can best capture the knowledge-based decisions in any given situation.

scholarly journals Risk, rationality and expected utility theory

2015 ◽  
Vol 45 (5-6) ◽  
pp. 798-826 ◽  
Author(s):  
Richard Pettigrew
Keyword(s):  
Decision Theory ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Decision Problems ◽  
Natural Way

There are decision problems where the preferences that seem rational to many people cannot be accommodated within orthodox decision theory in the natural way. In response, a number of alternatives to the orthodoxy have been proposed. In this paper, I offer an argument against those alternatives and in favour of the orthodoxy. I focus on preferences that seem to encode sensitivity to risk. And I focus on the alternative to the orthodoxy proposed by Lara Buchak’s risk-weighted expected utility theory. I will show that the orthodoxy can be made to accommodate all of the preferences that Buchak’s theory can accommodate.

scholarly journals Farm decision making under risk and uncertainty

1997 ◽  
Vol 45 (2) ◽  
pp. 307-328 ◽  
Author(s):  
G.B.C. Backus ◽  
V.R. Eidman ◽  
A.A. Dijkhuizen
Keyword(s):  
Decision Making ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Decision Problems ◽  
Subjective Expected Utility ◽  
Risk And Uncertainty ◽  
Decision Making Under Risk ◽  
Agricultural Risk ◽  
Risk Research

Relevant portions of the risk literature are reviewed, relating them to observed behaviour in farm decision-making. Relevant topics for applied agricultural risk research are proposed. The concept of decision making under risk and uncertainty is discussed by reviewing the theory of Subjective Expected Utility and its limitations. Subjective Expected Utility theory is the major framework for thinking systematically through complex issues of decision. Limitations of Subjective Expected Utility theory were that its application to unique decisions is doubtful, that it does not contribute to difficulties in determining the available decision alternatives, and that it is cast in a timeless setting, making the theoretic framework to a very limited extent helpful to solve real world decision problems. Most empirical studies indicate that farmers are risk neutral to slightly risk averse. It is doubtful whether decision makers could be classified according to their risk preferences. A presented overview of applied risk responses reveals much attention for diversification of the enterprise and of production practices, maintaining reserves, and farm expansion. Research reports on observed problems in farm decision making behaviour are lacking. Proposed topics for agricultural risk research include the assessment of the need for a strategic change, the creation of databases to determine both the (co)variances of input and output prices, the effectiveness of various kinds of decision support for different decision problems, and methods for applied scenario analysis to deal with long-run risk.

scholarly journals Cumulative Prospect Theory Version with Fuzzy Values of Outcome Estimates

Risks ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 72
Author(s):  
Oleg Uzhga-Rebrov ◽  
Peter Grabusts
Keyword(s):  
Prospect Theory ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Cumulative Prospect Theory ◽  
Development History ◽  
Decisions Under Risk ◽  
History Of ◽  
Main Factors ◽  
Theoretical Foundations

Choosing solutions under risk and uncertainty requires the consideration of several factors. One of the main factors in choosing a solution is modeling the decision maker’s attitude to risk. The expected utility theory was the first approach that allowed to correctly model various nuances of the attitude to risk. Further research in this area has led to the emergence of even more effective approaches to solving this problem. Currently, the most developed theory of choice with respect to decisions under risk conditions is the cumulative prospect theory. This paper presents the development history of various extensions of the original expected utility theory, and the analysis of the main properties of the cumulative prospect theory. The main result of this work is a fuzzy version of the prospect theory, which allows handling fuzzy values of the decisions (prospects). The paper presents the theoretical foundations of the proposed version, an illustrative practical example, and conclusions based on the results obtained.

Norm-Endorsement Utilitarianism and the Nature of Utility

1996 ◽  
Vol 12 (2) ◽  
pp. 165-182 ◽  
Author(s):  
Jonathan Baron
Keyword(s):  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Interpersonal Comparison ◽  
Moral Norms ◽  
Moral Principles ◽  
Future Goals ◽  
Equal Consideration

In this article, I shall suggest an approach to the justification of normative moral principles which leads, I think, to utilitarianism. The approach is based on asking what moral norms we would each endorse if we had no prior moral commitments. I argue that we would endorse norms that lead to the satisfaction of all our nonmoral values or goals. The same approach leads to a view of utility as consisting of those goals that we would want satisfied. In the second half of the article, I examine the implication of this view for several issues about the nature of utility, such as the use of past and future goals. The argument for utilitarianism is not completed here. The rest of it requires a defense of expected-utility theory, of interpersonal comparison, and of equal consideration (see Baron, 1993; Broome, 1991).

Housing Market Search Behavior and Expected Utility Theory: 1. Measuring Preferences for Housing

1982 ◽  
Vol 14 (5) ◽  
pp. 681-698 ◽  
Author(s):  
T R Smith ◽  
W A V Clark
Keyword(s):  
Los Angeles ◽  
Housing Market ◽  
Expected Utility ◽  
Utility Theory ◽  
House Price ◽  
Expected Utility Theory ◽  
Utility Functions ◽  
Future Search ◽  
Space Construction ◽  
Market Search

This is the first of two papers examining housing market search in a Los Angeles market. In this paper, we derive and analyze utility functions for housing for each individual in two groups of subjects. The utility functions are derived from an experimental setting, in which house price, floor space, construction quality, and neighborhood quality are varied. The functions are found to be essentially compatible with a linear model. They are used to predict the ratings of real houses and the ratings of the expected value of future search. These ratings are compared with actual ratings obtained from subjects during search. The results suggest that the actual or predicted ratings may be employed in a direct test of a simple expected utility theory of search, and further research along these lines appears justified.

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