Description

Decision theory considers making decisions under uncertainty, and combines probabilities, to quantify knowledge about the uncertain aspects, with utilities which quantify preferences over different options or outcomes.

While the basic theory of utility was presented and used in the module Decision Theory III, there are nice opportunities to study further aspects of utilities. One example is the theory of adaptive utilities, where in a sequence of related decisions one also aims to learn about ones utilities, hence these are not assumed to be fully known at the start. Another example is imprecise utilities, which for example naturally occur if one has limited time to elicit a person's utilities.

A different starting point could be to consider how one can link utility-based decision theory to prospect theory, which was developed as a descriptive decision theory and where the reference point plays an important role. Some attempts have been made to include the reference point within utility theory, and this provides exciting opportunities for further contributions and to explore applications.

For any of these areas, you might study and report on existing theory, develop new special cases or apply the theory to examples. There is a lot of freedom on specific topics you can work on, building on the Decision Theory III module. Feel free to contact me if you have any questions.

Prerequisites

Further information

You will find much information online when googling for `Utility Theory', specific topic areas or similar key words, and there are many relevant books in the library and journals (online via the Durham University Library). Please feel free to contact me by email if you are interested in particular ways to link this area to your wider interests.

Supervisor

Frank Coolen

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