The Rationality of Probabilities for Actions in Decision...

The Rationality of Probabilities for Actions in Decision Theory ABSTRACT: Spohns decision model, an advancement of Fishburns theory, is valuable for making explicit the principle used also by other thinkers that any adequate quantitative decision model must not explicitly or implicitly contain any subjective probabilities for acts. This principle is not used in the decision theories of Jeffrey or of Luce and Krantz. According to Spohn, this principle is important because it has effects on the term of action, on Newcombs problem, and on the theory of causality and the freedom of the will. On the one hand, I will argue against Spohn with Jeffrey that the principle has to be given up. On the other, I will try to argue against†¦show more content†¦In 1969 Robert Nozick introduced Newcombs problem to the philosophic community as a conflict between the principle of expected utility maximization and the principle of dominance. Nozicks introduction led to a Newcombmania (Levi 1982), because philosophers have decisively different opinions about t he correct solution to this problem. The Newcombmania showed itself in the development of causal and evidential decision theories and other proposals. Because the evidential theories (for example Jeffrey 1965, 1983) do not use the principle, they cannot give a solution to Newcombs problem in case you accept the principle. The causal theories which use subjunctive conditionals (for example Lewis 1981) are problematical, because they still have to provide a logic of subjunctive conditionals, a probability theory for subjunctive conditionals and a corresponding decision theory. Because Skyrms (1980) causal theory and Kyburgs (1980) proposal of epistemic vs. stochastic independence also dont use the principle, only Spohns solution (1978) to Newcombs problem is left. This solution which recommends taking both boxes is valuable for its simplicity in contrast to the theories with subjunctive conditionals. According to Spohn it is a mistake to use probabilities conditionalized on actions fo r the results of the prediction, if the prediction is earlier than the choice. According to Spohn it is right that theShow MoreRelatedStudy Stock Market Trends : Ron Insana. Investments Don t Always Work As Planned On Wall Street1487 Words   |  6 Pagesparticular investment. Game theory applies to industrial organizations, labor markets and pricing. Game theory rarely applies to finance. The Nash equilibrium is a term used in game theory to describe equilibrium where each player s strategy is optimal given the strategies of all other players. A Nash Equilibrium exists when there is no unilateral profitable deviation from the players involved. 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