PPT Slide
Decision Making as Constrained Optimization
Where do decision rules come from?
Historical Example: The St. Petersburg Paradox
Expected Value of Game
Expected Utility Theory
Expected-Utility Axioms (Von Neumann & Morgenstern,1947)
Violation of Connectedness
Violations of Transitivity
Violation of Substitution
Examples of EV as a good decision rule
Another normative model
Objective function
Assumptions underlying normative model for spousal selection
A final normative model: Multi-Attribute Utility Theory (MAUT)
What do normative/prescriptive models provide?
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