9.5 Decision Theory Under Scrutiny

Numerous models for decision making were introduced in this chapter. These provide a foundation for planning under uncertainty, which is the main focus of Part III. Before constructing planning models with this foundation, it is important to critically assess how appropriate it may be in applications. You may have had many questions while reading Sections 9.1 to 9.4. How are the costs determined? Why should we believe that optimizing the expected cost is the right thing to do? What happens if prior probability distributions are not available? Is worst-case analysis too conservative? Can we be sure that players in a game will follow the assumed rational behavior? Is it realistic that players know each other's cost functions? The purpose of this section is to help shed some light on these questions. A building is only as good as its foundation. Any mistakes made by misunderstanding the limitations of decision theory will ultimately work their way into planning formulations that are constructed from them.