Difference between revisions of "Decision theory"
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[[Category:Glossary term]]<section begin=glossary /> | [[Category:Glossary term]]<section begin=glossary /> | ||
| − | :an area of study of [[:en:discrete mathematics|discrete mathematics]] that models human decision-making in [[:en:science|science]], [[:en:engineering|engineering]] and indeed all human social activities. It is concerned with how real or ideal decision-makers [[:en:decision making|make or should make decisions]], and how optimal [[:en:decision|decision]]s can be reached. | + | :'''Decision theory''' is an area of study of [[:en:discrete mathematics|discrete mathematics]] that models human decision-making in [[:en:science|science]], [[:en:engineering|engineering]] and indeed all human social activities. It is concerned with how real or ideal decision-makers [[:en:decision making|make or should make decisions]], and how optimal [[:en:decision|decision]]s can be reached. |
:Most of decision theory is [[:en:normative|normative]] or [[:en:prescriptive|prescriptive]], i.e. it is concerned with identifying the best decision to take, assuming an ideal decision maker who is fully informed, able to compute with perfect accuracy, and fully [[:en:rational|rational]]. The practical application of this prescriptive approach (how people ''should'' make decisions) is called [[:en:decision analysis|decision analysis]], and aimed at finding tools, methodologies and software to help people make better decisions. The most systematic and comprehensive software tools developed in this way are called [[:en:decision support system|decision support system]]s. | :Most of decision theory is [[:en:normative|normative]] or [[:en:prescriptive|prescriptive]], i.e. it is concerned with identifying the best decision to take, assuming an ideal decision maker who is fully informed, able to compute with perfect accuracy, and fully [[:en:rational|rational]]. The practical application of this prescriptive approach (how people ''should'' make decisions) is called [[:en:decision analysis|decision analysis]], and aimed at finding tools, methodologies and software to help people make better decisions. The most systematic and comprehensive software tools developed in this way are called [[:en:decision support system|decision support system]]s. | ||
:Since it is obvious that people do not typically behave in optimal ways, there is also a related area of study, which is a [[:en:positive|positive]] or [[:en:descriptive|descriptive]] discipline, attempting to describe what people will actually do. Since the normative, optimal decision often creates hypotheses for testing against actual behaviour, the two fields are closely linked. Furthermore it is possible to relax the assumptions of perfect information, rationality and so forth in various ways, and produce a series of different prescriptions or predictions about behaviour, allowing for further tests of the kind of decision-making that occurs in practice.<section end=glossary /> | :Since it is obvious that people do not typically behave in optimal ways, there is also a related area of study, which is a [[:en:positive|positive]] or [[:en:descriptive|descriptive]] discipline, attempting to describe what people will actually do. Since the normative, optimal decision often creates hypotheses for testing against actual behaviour, the two fields are closely linked. Furthermore it is possible to relax the assumptions of perfect information, rationality and so forth in various ways, and produce a series of different prescriptions or predictions about behaviour, allowing for further tests of the kind of decision-making that occurs in practice.<section end=glossary /> | ||
Latest revision as of 09:36, 17 November 2009
<section begin=glossary />
- Decision theory is an area of study of discrete mathematics that models human decision-making in science, engineering and indeed all human social activities. It is concerned with how real or ideal decision-makers make or should make decisions, and how optimal decisions can be reached.
- Most of decision theory is normative or prescriptive, i.e. it is concerned with identifying the best decision to take, assuming an ideal decision maker who is fully informed, able to compute with perfect accuracy, and fully rational. The practical application of this prescriptive approach (how people should make decisions) is called decision analysis, and aimed at finding tools, methodologies and software to help people make better decisions. The most systematic and comprehensive software tools developed in this way are called decision support systems.
- Since it is obvious that people do not typically behave in optimal ways, there is also a related area of study, which is a positive or descriptive discipline, attempting to describe what people will actually do. Since the normative, optimal decision often creates hypotheses for testing against actual behaviour, the two fields are closely linked. Furthermore it is possible to relax the assumptions of perfect information, rationality and so forth in various ways, and produce a series of different prescriptions or predictions about behaviour, allowing for further tests of the kind of decision-making that occurs in practice.<section end=glossary />
