A Theory of Case-Based Decisions

by Itzhak Gilboa, David Schmeidler

Gilboa and Schmeidler provide a new paradigm for modeling decision making under uncertainty. Case-based decision theory suggests that people make decisions by analogies to past cases: they tend to choose acts that performed well in the past in similar situations, and to avoid acts that performed poorly. The authors describe the general theory and its relationship to planning, repeated choice problems, inductive inference, and learning. They highlight its mathematical and philosophical foundations and compare it to expected utility theory as well as to rule-based systems.

Genres: Philosophy

212 pages, Hardcover

First published January 1, 2001

About the author

Itzhak Gilboa works in decision theory and other fields in economic theory such as game theory and social choice. His main interest is in decision under uncertainty, focusing on the definition of probability, notions of rationality, non-Bayesian decision models, and related issues.

He is Professor at Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics and Decision Sciences, HEC, Paris, as well as Fellow of the Cowles Foundation for Research in Economics, Yale University (part time).

Reviews

[Jonathon Jones · Rating 4 out of 5]

The authors do a great job of motivating their project, namely by showing that expected utility theory is going to have trouble when the states of the world are difficult to specify. Their solution, that we rely on cases judged according to their similarity to our current situation, does seem like it should belong to the toolbox. I think there is something here, although I’m not sure their actual specification of the decision procedure is the right one.

Additionally, they provide an answer for something I hadn’t really been worried about before, but now I really want to solve. Specifically: how do we model the fact that we want variety, such that I want Chinese one day, pizza another, and salad the next day? Their solution is, again, interesting if not entirely convincing. But it does look like the sort of thing that might work.

Overall, this book is very successful at raising interesting questions. The solutions I’m less sure about, and the proofs seemed unnecessary to their purpose. Still, very thought provoking!

[Oleg Redko · Rating 2 out of 5]

The right words to describe this work: NOTHING NEW, BUT THANKS FOR REMINDING ME THE FEW STUFF I STUDIED ON MY FIRST DEGREE....