Re: [Talk] decision theory
http://en.wikipedia.org/wiki/Utility_function
http://www.infra.kth.se/~soh/decisiontheory.pdf
Process utilities
A generalized EU theory that takes process utilities into account allows
for the influence of attitudes towards risk and certainty.
"Under the narrow interpretation of Allais and Savage which identifies
the consequences with the monetary payoffs, utility theory is violated.
Under the broader interpretation of the consequences, which incorporates
non-monetary considerations such as regret utility theory remains intact..."
Regret theory makes use of a two-attribute utility function that incorporates
two measures of satisfaction, namely (1) utility of outcomes, as in classical
EU, and (2) quantity of regret. By regret is meant "the painful sensation
of recognising that 'what is' compares unfavourably with 'what might have been'
."
Prospect theory
Prospect theory differs from most other theories of decision-making in that
it distinguishes between two stages in the decision process.
The first phase, the editing phase serves "to organize and reformulate the
options so as to simplify subsequent evaluation and choice."
In the second phase, the evaluation phase the options are evaluated.
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