Decision theoryDecision theory (or the theory of choice; not to be confused with choice theory) is a branch of applied probability theory and analytic philosophy concerned with the theory of making decisions based on assigning probabilities to various factors and assigning numerical consequences to the outcome. There are three branches of decision theory: Normative decision theory: Concerned with the identification of optimal decisions, where optimality is often determined by considering an ideal decision-maker who is able to calculate with perfect accuracy and is in some sense fully rational.
Bayesian epistemologyBayesian epistemology is a formal approach to various topics in epistemology that has its roots in Thomas Bayes' work in the field of probability theory. One advantage of its formal method in contrast to traditional epistemology is that its concepts and theorems can be defined with a high degree of precision. It is based on the idea that beliefs can be interpreted as subjective probabilities. As such, they are subject to the laws of probability theory, which act as the norms of rationality.
Western philosophyWestern philosophy encompasses the philosophical thought and work of the Western world. Historically, the term refers to the philosophical thinking of Western culture, beginning with the ancient Greek philosophy of the pre-Socratics. The word philosophy itself originated from the Ancient Greek (φιλοσοφία), literally, "the love of wisdom" φιλεῖν , "to love" and σοφία sophía, "wisdom").
Mathematical economicsMathematical economics is the application of mathematical methods to represent theories and analyze problems in economics. Often, these applied methods are beyond simple geometry, and may include differential and integral calculus, difference and differential equations, matrix algebra, mathematical programming, or other computational methods. Proponents of this approach claim that it allows the formulation of theoretical relationships with rigor, generality, and simplicity.
Expected utility hypothesisThe expected utility hypothesis is a popular concept in economics that serves as a reference guide for decision making when the payoff is uncertain. The theory describes which options rational individuals should choose in a situation with uncertainty, based on their risk aversion. The expected utility hypothesis states an agent chooses between risky prospects by comparing expected utility values (i.e. the weighted sum of adding the respective utility values of payoffs multiplied by their probabilities).
Dutch bookIn gambling, a Dutch book or lock is a set of odds and bets, established by the bookmaker, that ensures that the bookmaker will profit—at the expense of the gamblers—regardless of the outcome of the event (a horse race, for example) on which the gamblers bet. It is associated with probabilities implied by the odds not being coherent. In economics, the term usually refers to a sequence of trades that would leave one party strictly worse off and another strictly better off.
Ramsey's theoremIn combinatorics, Ramsey's theorem, in one of its graph-theoretic forms, states that one will find monochromatic cliques in any edge labelling (with colours) of a sufficiently large complete graph. To demonstrate the theorem for two colours (say, blue and red), let r and s be any two positive integers. Ramsey's theorem states that there exists a least positive integer R(r, s) for which every blue-red edge colouring of the complete graph on R(r, s) vertices contains a blue clique on r vertices or a red clique on s vertices.
Probability interpretationsThe word probability has been used in a variety of ways since it was first applied to the mathematical study of games of chance. Does probability measure the real, physical, tendency of something to occur, or is it a measure of how strongly one believes it will occur, or does it draw on both these elements? In answering such questions, mathematicians interpret the probability values of probability theory. There are two broad categories of probability interpretations which can be called "physical" and "evidential" probabilities.
Tractatus Logico-PhilosophicusThe Tractatus Logico-Philosophicus (widely abbreviated and cited as TLP) is the only book-length philosophical work by the Austrian philosopher Ludwig Wittgenstein that was published during his lifetime. The project had a broad goal: to identify the relationship between language and reality and to define the limits of science. Wittgenstein wrote the notes for the Tractatus while he was a soldier during World War I and completed it during a military leave in the summer of 1918.
LogicLogic is the study of correct reasoning. It includes both formal and informal logic. Formal logic is the science of deductively valid inferences or logical truths. It studies how conclusions follow from premises due to the structure of arguments alone, independent of their topic and content. Informal logic is associated with informal fallacies, critical thinking, and argumentation theory. It examines arguments expressed in natural language while formal logic uses formal language.
