Making decisions

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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

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Contents

Decisions and uncertain events
1
A numerical measure for uncertainty
13
The laws of probability
30
Copyright

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About the author (1985)

DENNIS V. LINDLEY is Professor Emeritus of Statistics, and past Head of Department, at University College London (UK). He has played a leading role in putting Bayesian statistics back on the modern statistical map. He has published over 100 original and significant scholarly articles, as well as several books, that are all delightfully written and full of insights. He is a founding organizer and former president of the celebrated Valencia International Meetings on Bayesian Statistics, the 2002 meeting of which was dedicated in his honor.

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