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The four axioms of VNM-rationality are completeness, transitivity, continuity, and independence. These axioms, apart from continuity, are often justified using the Dutch book theorems (whereas continuity is used to set aside lexicographic or infinitesimal utilities). Completeness assumes that an individual has well defined preferences:
There are four axioms of the expected utility theory that define a rational decision maker: completeness; transitivity; independence of irrelevant alternatives; and continuity. [11] Completeness assumes that an individual has well-defined preferences and can always decide between any two alternatives.
The Allais paradox is a choice problem designed by Maurice Allais () to show an inconsistency of actual observed choices with the predictions of expected utility theory. . The Allais paradox demonstrates that individuals rarely make rational decisions consistently when required to do so immediat
Decision analysis (DA) is the discipline comprising the philosophy, methodology, and professional practice necessary to address important decisions in a formal manner. . Decision analysis includes many procedures, methods, and tools for identifying, clearly representing, and formally assessing important aspects of a decision; for prescribing a recommended course of action by applying the ...
Together with the axiom of choice (see below), these are the de facto standard axioms for contemporary mathematics or set theory. They can be easily adapted to analogous theories, such as mereology. Axiom of extensionality; Axiom of empty set; Axiom of pairing; Axiom of union; Axiom of infinity; Axiom schema of replacement; Axiom of power set ...
The four-sides model also known as communication square or four-ears model is a communication model described in 1981 by German psychologist Friedemann Schulz von Thun. [2] [3] It describes the multi-layered structure of human utterances.
In decision theory, the Ellsberg paradox (or Ellsberg's paradox) is a paradox in which people's decisions are inconsistent with subjective expected utility theory. John Maynard Keynes published a version of the paradox in 1921. [1] Daniel Ellsberg popularized the paradox in his 1961 paper, "Risk, Ambiguity, and the Savage Axioms". [2]
The mythological Judgement of Paris required selecting from three incomparable alternatives (the goddesses shown).. Decision theory or the theory of rational choice is a branch of probability, economics, and analytic philosophy that uses the tools of expected utility and probability to model how individuals would behave rationally under uncertainty.