SOC SCI H1G Lecture Notes - Lecture 10: Dutch Book, Expected Utility Hypothesis, Belief Revision
29 Dec 2018
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Expected utility is the average return for some series of events. Or p(e1)r(e1) + p(e2)r(e2) + + p(en)r(en) Rationality: act in a way that maximizes expected utility. Fair bet: one whose eu is zero. You get for each dot on the die. Probability theory tells us how to fit our beliefs about the chances of events together (1/6)(1) + (1/6)(2) + (1/6)(3) + (1/6)(4) + (1/6)(5) + (1/6)(6) - 3. If i think p(h) = 0. 5, then i should think p(t) = p(not h) = 1- p(h) = 0. 5. If i think p(h) = 0. 75, then i should think p(t) = 0. 25. Probability theory can"t tell us what to initially say about p(h) Dutch book: a series of events where one is guaranteed to lose money. They come about when one is not using the axioms of probability to have their beliefs fit together. Also, the series of bets seems fair to the person accepting the bets.
