A Tutorial Introduction to Decision Theory

D. North
1968 IEEE Transactions on Systems Science and Cybernetics  
Decision theory provides a rational framework for choosing between alternative courses of action when the consequences resulting from this choice are imperfectly known. Two streams of thought serve as the foundations: utility theory and the inductive use of probability theory. The intent of this paper is to provide a tutorial introduction to this increasingly important area of systems science. The foundations are developed on an axiomatic basis, and a simple example, the "anniversary problem,"
more » ... s used to illustrate decision theory. The concept of the value of information is developed and demonstrated. At times mathematical rigor has been subordinated to provide a clear and readily accessible exposition of the fundamental assumptions and concepts of decision theory. A sampling of the many elegant and rigorous treatments of decision theory is provided among the references.
doi:10.1109/tssc.1968.300114 fatcat:ntjkgvklerhrpadi7z6mx5fsku