Skip to main content
SpringerLink
Log in
Book cover

Introduction to Formal Philosophy pp 657–667Cite as

Dynamic Decision Theory

  • Chapter
  • First Online:

Part of the book series: Springer Undergraduate Texts in Philosophy ((SUTP))

Abstract

This chapter considers the controversial relationship between dynamic choice models, which depict a series of choices over time, and the more familiar static choice models, which depict a single ‘one-shot-only’ decision. An initial issue concerns how to reconcile the normative advice of these two models: Should an agent take account of the broader dynamic context when making a decision, and if so, in a sophisticated manner (the orthodox backwards induction approach), or rather in a resolute manner (which takes the past as well as the future to be significant)? Further controversies concern what the dynamic implications of an agent’s preferences reveal about the (ir)rationality of these preferences.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   69.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   89.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD   119.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Notes

  1. 1.

    This decision problem is from Rabinowicz [21, 599].

  2. 2.

    Joyce [11, 86] gives the following informal statement of the independence axiom: ‘a rational agent’s preferences between (acts) A and A ∗ should not depend on circumstances where the two yield identical outcomes.’

  3. 3.

    We thus see why McClennan [20] defends the resolute approach to dynamic choice. For similar reasons, Buchak [5] is also sympathetic to resolute choice.

  4. 4.

    This is a lexical choice rule that can handle indeterminate belief and/or desire, represented by a set of probability-utility function pairs. The ‘E-admissible’ options are those that have maximal expected utility for at least one probability-utility representation in the set; these are the options that a rational agent may permissibly choose. The agent discriminates between ‘E-admissible’ options on the basis of her ‘security’ attitudes.

  5. 5.

    * Indicates recommended reading.

References

* Indicates recommended reading.

  1. Arrow, K. (1995). A note on freedom and flexibility. In K. Basu, P. Pattanaik, & K. Suzumura (Eds.), Choice, welfare and development (pp. 7–15). Oxford: Oxford University Press.

    Google Scholar 

  2. Bradley, R. (2009). Becker’s thesis and three models of preference change. Politics, Philosophy and Economics, 8(2), 223–242.

    Article  Google Scholar 

  3. Bradley, S., & Steele, K. S. (2016). Can free evidence be bad? Value of information for the imprecise probabilist. Philosophy of Science, 83(1), 1–28.

    Article  Google Scholar 

  4. Buchak, L. (2010). Instrumental rationality, epistemic rationality, and evidence-gathering. Philosophical Perspectives, 24, 85–120.

    Article  Google Scholar 

  5. Buchak, L. (2013). Risk and rationality Oxford: Oxford University Press.

    Book  Google Scholar 

  6. Hammond, P. J. (1976). Changing tastes and coherent dynamic choice. The Review of Economic Studies, 43(1), 159–173.

    Article  Google Scholar 

  7. Hammond, P. J. (1977). Dynamic restrictions on metastatic choice. Economica, 44(176), 337–350.

    Article  Google Scholar 

  8. Hammond, P. J. (1988). Orderly decision theory: A comment on Professor Seidenfeld. Economics and Philosophy, 4, 292–297.

    Article  Google Scholar 

  9. Hammond, P. J. (1988). Consequentialism and the independence axiom. In B. R. Munier (Ed.), Risk, decision and rationality. Dordrecht: D. Reidel.

    Google Scholar 

  10. Hammond, P. J. (1988). Consequentialist foundations for expected utility theory. Theory and Decision, 25, 25–78.

    Article  Google Scholar 

  11. Joyce, J. M. (1999). The foundations of causal decision theory. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  12. Kadane, J. B., Schervish, M., & Seidenfeld, T. (2008). Is ignorance bliss? Journal of Philosophy, 105(1), 5–36.

    Article  Google Scholar 

  13. Koopmans, T. C. (1962). On flexibility of future preference. Cowles foundation for research in economics (Cowles foundation discussion papers 150), Yale University.

    Google Scholar 

  14. Kreps, D. M., & Porteus, E. L. (1978). Temporal resolution of uncertainty and dynamic choice theory. Econometrica, 46(1), 185–200.

    Article  Google Scholar 

  15. Levi, I. (1986). Hard choices: Decision making under unresolved conflict. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  16. Levi, I. (1991). Consequentialism and sequential choice. In M. Bacharach & S. Hurley (Eds.), Foundations of decision theory. Oxford: Basil Blackwell.

    Google Scholar 

  17. Machina, M. J. (1989). Dynamic consistency and non-expected utility models of choice under uncertainty. Journal of Economic Literature, 27, 1622–1668.

    Google Scholar 

  18. Maher, P. (1992). Diachronic rationality. Philosophy of Science, 59(1), 120–141.

    Article  Google Scholar 

  19. McClennen, E. F. (1988). Ordering and independence: A comment on professor Seidenfeld. Economics and Philosophy, 4, 298–308.

    Article  Google Scholar 

  20. McClennen, E. F. (1990). Rationality and dynamic choice: Foundational explorations. Cambridge: Cambridge University Press.

    Google Scholar 

  21. Rabinowicz. W. (1995). To have one’s cake and eat it too: Sequential choice and expected-utility violations. Journal of Philosophy, 92(11), 586–620.

    Article  Google Scholar 

  22. Rabinowicz, W. (2000). Preference stability and substitution of indifferents: A rejoinder to Seidenfeld. Theory and Decision, 48, 311–318.

    Article  Google Scholar 

  23. Seidenfeld, T. (1988). Decision theory without “independence” or without “ordering”. Economics and Philosophy, 4, 309–315.

    Article  Google Scholar 

  24. Seidenfeld, T. (1988). Rejoinder [to Hammond and McClennen]. Economics and Philosophy, 4, 309–315.

    Article  Google Scholar 

  25. Seidenfeld, T. (1994). When normal and extensive form decisions differ. Logic, Methodology and Philosophy of Science, IX, 451–463.

    Google Scholar 

  26. Seidenfeld, T. (2000). Substitution of indifferent options at choice nodes and admissibility: A reply to Rabinowicz. Theory and Decision, 48, 305–310.

    Article  Google Scholar 

  27. Seidenfeld, T. (2000). The independence postulate, hypothetical and called-off acts: A further reply to Rabinowicz. Theory and Decision, 48, 319–322.

    Article  Google Scholar 

  28. Skyrms, B. (1993). A mistake in dynamic coherence arguments? Philosophy of Science, 60(2), 320–328.

    Article  Google Scholar 

  29. Steele, K. S. (2010). What are the minimal requirements of rational choice? Arguments from the sequential-decision setting. Theory and Decision, 68, 463–487.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Philosophy, Australian National University, Canberra, ACT, Australia

    Katie Steele

Authors
  1. Katie Steele
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Katie Steele .

Editor information

Editors and Affiliations

  1. Division of Philosophy, Royal Institute of Technology (KTH), Stockholm, Sweden

    Sven Ove Hansson

  2. Center for Information and Bubble Studies, University of Copenhagen, Copenhagen, Denmark

    Vincent F. Hendricks

Rights and permissions

Reprints and permissions

Copyright information

© 2018 Springer International Publishing AG, part of Springer Nature

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Steele, K. (2018). Dynamic Decision Theory. In: Hansson, S., Hendricks, V. (eds) Introduction to Formal Philosophy. Springer Undergraduate Texts in Philosophy. Springer, Cham. https://doi.org/10.1007/978-3-319-77434-3_35

Download citation

Publish with us

Policies and ethics

Search

Navigation