Making Decisions

By D.V. Lindley and Dennis V. Lindley

Book Overview

Making Decisions Second Edition D.V. Lindley Formerly Professor of Statistics, University College London This book looks at the problems involved in decision-making and argues that there is only one logical way to make a decision. By the use of three basic principles--assigning probabilities to the uncertain events; assigning utilities to the possible consequences; and choosing that decision that maximizes expected utility--decisions can be reached more efficiently and with less disagreement. It shows that only maximization of expected utility leads to sensible decision-making. This extensively revised second edition uses only elementary mathematics and will be of interest to all those concerned with decision-making and its consequences. Since his retirement from University College London in 1977 Professor Lindley has held visiting appointments at Berkeley, University of Florida, George Washington University, University of Sao Paulo, University of Wisconsin, Monash University, Australia, and University of Canterbury, New Zealand. Contents * Decisions and uncertain events * A numerical measure for uncertainty * The laws of probability * A numerical measure for consequences * The utility of money * Bayes' Theorem * Value of information * Decision trees * The assessment of probabilities and utilities * An appreciation Appendix Answers to exercises Glossary of Symbols Subject Index

• Format: Paperback
• Language: English
• ISBN: 0471908088
• ISBN13: 9780471908081
• Release Date: April 1991
• Publisher: Wiley
• Length: 220 Pages
• Weight: 0.85 lbs.
• Dimensions: 0.5" x 5.9" x 9.0"

Customer Reviews

Very cheap and on time

The book came 3 days into the 18 day window for delivery. I got the new book for half of the price of a used book from our bookstore. Very happy :)

Lindley expouses the Bayesian approach to decision theory

Dennis Lindley is a strong believer in the subjective approach to probability that is called Bayesian. He has written texts on probability and statistics that presents strong arguments for why he believes it is the only correct way to formulate a theory of probability and to coherently apply probabilty to problems in statistical inference. Statistical decision theory developed in the 1940s and 1950s as a way to incorporate statistical methods in general decision making processes. Abraham Wald helped develop the classical (frequentist) approach to this in the late 1940s. Frequentist and Bayesian approaches have then developed in the 20th Century. In this book Lindley uses a basic urn model for probability as a starting point for an elementary introduction into the Bayesian approach to decision making. He presents the basics of utility theory which is the Bayesian approach to scoring potential decisions, so as to determine the "best" decision.