Normative Decision Theory - Vision Labs
Normative Decision Theory
A prescriptive theory for how decisions should be made to maximize the value of
decision outcomes for an individual
PSY 5018H: Math Models Hum Behavior, Prof. Paul Schrater, Spring 2005
Decision Theory
? Quantify preferences on outcomes s
? U(s,a)
? Quantify Beliefs about outcomes of actions
? P(s|O,A) where
? O are observations ? A are actions
? Decision making principle:
? Choose A that Maximizes Expected Utility
? Needs link between s & A, s' = T(s,A)
PSY 5018H: Math Models Hum Behavior, Prof. Paul Schrater, Spring 2005
PSY 5018H: Math Models Hum Behavior, Prof. Paul Schrater, Spring 2005
U ( a, s)
Utility Matrix
OUTCOMES
ACTIONS
PSY 5018H: Math Models Hum Behavior, Prof. Paul Schrater, Spring 2005
Can we boil all good down to a number?
? Probably not. ? Different kinds of utility (Kahneman):
? Experienced utility
? E.g. Pain during treatment
? Remembered utility
? E.g. Pain remembered after treatment
? Predicted utility
? Do people know what will be good for them?
? Decision utility
? Do people use their knowledge when making decisions?
PSY 5018H: Math Models Hum Behavior, Prof. Paul Schrater, Spring 2005
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