Decision Theory with a Human Face

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The aim of this research is the production of a book on decision making that applies to situations in which we don't know what all the alternative are and have not made up our mind about those that we are aware of. The first part of the book will present, explain and then reformulate the core of Bayesian decision theory, currently the standard theory of decision making. The focus will be on foundational questions and in particular on two problems: one normative, the other epistemological. The first is what might be termed the problem of justification, namely that of providing grounds for believing that people should follow its prescriptions. The second is the problem of interpretation, which in its starkest form is the question of how we can have knowledge of non-observable mental states such as beliefs and preferences. A solution to this problem is crucial to the applicability of decision theory, for unless we can determine what someone believes or desires, we cannot use the theory to say what he should do or explain what he was observed to do. The second part will address the problem of decision making in the kinds of situations described above. The main thought here is that since people cannot plan for all contingencies, a theory which gives advice on the presumption that agents can make their minds up about everything in advance is going to be of limited help. Consequently, this part of the project will attempt to address three main research questions. Firstly, how people should change their mind about the possibilities they face as they become aware of previously unforeseen features of them? Secondly, how should they make up their mind about what probability and desirability to attach to prospects in the first place? And thirdly, how should they make decisions when they have not made their mind up about all relevant features of the decision problem, including how likely are the various contingencies upon which the success of the their decisions depend and how desirable are the possible consequences of the choices they make.