Martin Peterson - An Introduction to Decision Theory

This up-to-date introduction to decision theory offers comprehensive and accessible discussions of decision making under ignorance and risk, the foundations of utility theory, the debate over subjective and objective probability, Bayesianism, causal decision theory, game theory and social choice theory. No mathematical skills are assumed, and all concepts and results are explained in non-technical and intuitive as well as more formal ways. There are over 100 exercises with solutions, and a glossary of key terms and concepts. An emphasis on foundational aspects of normative decision theory (rather than descriptive decision theory) makes the book particularly useful for philosophy students, but it will appeal to readers in a range of disciplines including economics, psychology, political science and computer science.

MARTIN PETERSON is Associate Professor of Philosophy at the Royal Institute of Technology, Sweden. He is author of Non-Bayesian Decision Theory (2008).

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This book is an introduction to decision theory. My ambition is to present the subject in a way that is accessible to readers with a background in a wide range of disciplines, such as philosophy, economics, psychology, political science and computer science. That said, I am myself a philosopher, so it is hardly surprising that I have chosen to discuss philosophical and foundational aspects of decision theory in some detail. In my experience, readers interested in specific applications of the subject may find it helpful to start with a thorough discussion of the basic principles before moving on to their chosen field of specialisation.

My ambition is to explain everything in a way that is accessible to everyone, including readers with limited knowledge of mathematics. I therefore do my best to emphasise the intuitive ideas underlying the technical concepts and results before I state them in a more formal vocabulary. This means that some points are made twice, first in a non-technical manner and thereafter in more rigorous ways. I think it is important that students of decision theory learn quite a bit about the technical results of the subject, but most of those results can no doubt be explained much better than what is usually offered in textbooks. I have tried to include only theorems and proofs that are absolutely essential, and I have made an effort to prove the theorems in ways I believe are accessible for beginners. In my experience, this sometimes comes into conflict with the ambition to present technical material in the minimalist style usually preferred by experts.

Most of the technical results are presented in twenty boxes clearly separated from the main body of the text. In principle, it should be possible to read the book without reading the boxes, although they hopefully deepen the students understanding of the subject. I have also included over 100 exercises (and solutions), most of which should be fairly straightforward. Unlike other textbooks, no exercise asks the reader to prove some theorem I did not bother to prove myself. Finally, Appendix A contains a glossary in which I try to briefly explain some of the key terms and concepts. I believe the glossary might be particularly useful for readers wishing to study only a selected number of the chapters.

A large number of people deserve my sincere thanks. First of all, I would like to thank all students who have contributed their invaluable input to this project. I have done my best to improve the manuscript in accordance with the advice I have received. I am also deeply indebted to a number of fellow teachers and colleagues: Barbro Bjrkman, Joanna Burch Brown, John Cantwell, Stephen John, Elselijn Kingma, Holger Rosencrantz, and Per Sandin. I am also very grateful for valuable comments on the original proposal and draft manuscript given by four anonymous readers. Finally, I wish to thank Hilary Gaskin at Cambridge University Press, who suggested I should write this textbook. Without her enthusiasm and encouragement, this book would never have been written. The project proved to be both challenging and time consuming but always highly enjoyable.