IMS555 - Chapter 6

What gives us reason for preferring one alternative over the other?

• Subjective beliefs

• Lack of information

• Great deal of data

• Evidence or information

What is the principle of insufficent reason?

• Always selecting the worst outcome

• Ignoring all evidence

• Choosing the most likely outcome

• Assigning equal probabilities to all possible outcomes

What is the basis of Subjective Expected Utility?

• Bayesian inference

• Bayes' theorem

• Epistemic reliability

• Fuzzy set membership

What does Bayesian decision theory state about rational agents?

• They have a coherent set of probabilistic beliefs

• They always choose the option with the lowest expected utility

• They always choose the option with the highest expected utility

• They never change their beliefs based on new evidence

What is the Paradox of Ideal Evidence?

• Evidence that confirms existing beliefs

• Assigning low probability to a hypothesis with high evidence

• Assigning high probability to a hypothesis with low evidence

• Evidence that is irrelevant to decision making

According to Ellsberg's Paradox, what do people tend to choose?

• Unknown probability of winning

• Known probability of winning

• Equal probabilities of winning

• No preference between probabilities

What is the purpose of Reliability-Weighted Expected Utility?

• To ignore all probabilities

• To choose the option with the lowest expected utility

• To maximize uncertainty

• To calculate a definite expected value for each alternative

What is the Ellsberg Index used for?

• To determine the most pessimistic outcome

• To calculate the minimum expected utility

• To eliminate all probabilities

• To combine maximin expected utility with reliability-weighted expected utility

What is the main idea behind Levi's Lexicographical Test?

• To choose the option with the highest expected utility

• To propose a series of three lexicographically ordered tests

• To ignore all decision criteria

• To assign equal probabilities to all outcomes

What is the outcome of the Levi's Lexicographical Test example provided?

• All options are rejected

• Option a2 is chosen

• Option a3 is chosen

• Option a1 is chosen