Decision Theory

9 units · Undergraduate

Spring: 9 units This course is an introduction to formal models of choice and decision-making. We begin by examining choice under certainty, developing both qualitative and quantitative models of preference. We then expand our analysis to take into account uncertainty, focusing on the von Neumann-Morgenstern theory of expected utility and Savage's classic axioms. Empirical challenges to models are emphasized throughout, in response to which we will consider a variety of alternative representations of uncertainty (e.g., Dempster-Shafer belief functions, non-unique probability measures) and preference (e.g., framing effects, prospect theory). Prerequisites: 80-210 Min. grade C or 21-127 Min. grade C or 21-128 Min. grade C or 80-212 Min. grade C or 15-251 Min. grade C