9.5 Decision Theory Under Scrutiny

Numerous models for decision making were introduced in this chapter.
These provide a foundation for planning under uncertainty, which is
the main focus of Part III. Before constructing planning
models with this foundation, it is important to critically assess how
appropriate it may be in applications. You may have had many
questions while reading Sections 9.1 to
9.4. How are the costs determined? Why should we
believe that optimizing the *expected* cost is the right thing to
do? What happens if prior probability distributions are not
available? Is worst-case analysis too conservative? Can we be sure
that players in a game will follow the assumed rational behavior? Is
it realistic that players know each other's cost functions? The
purpose of this section is to help shed some light on these questions.
A building is only as good as its foundation. Any mistakes made by
misunderstanding the limitations of decision theory will ultimately
work their way into planning formulations that are constructed from
them.

- 9.5.1 Utility Theory and Rationality

- 9.5.2 Concerns Regarding the Probabilistic Model
- 9.5.2.1 Bayesians vs. frequentists
- 9.5.2.2 The source of prior distributions
- 9.5.2.3 Incorrect assumptions on conditional distributions

- 9.5.3 Concerns Regarding the Nondeterministic Model
- 9.5.4 Concerns Regarding Game Theory
- Further Reading
- Exercises