It is widely held that Bayesian decision theory is the final
word on how a rational person should make decisions. However,
Leonard Savage--the inventor of Bayesian decision theory--argued
that it would be ridiculous to use his theory outside the kind
of small world in which it is always possible to "look before
you leap." If taken seriously, this view makes Bayesian decision
theory inappropriate for the large worlds of scientific
discovery and macroeconomic enterprise. When is it correct to
use Bayesian decision theory--and when does it need to be
modified? Using a minimum of mathematics, Rational Decisions
clearly explains the foundations of Bayesian decision theory and
shows why Savage restricted the theory's application to small
worlds. The book is a wide-ranging exploration of standard
theories of choice and belief under risk and uncertainty. Ken
Binmore discusses the various philosophical attitudes related to
the nature of probability and offers resolutions to paradoxes
believed to hinder further progres