Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Department of Philosophy Philosophy 216 Probability and Decision Making Winter 2014 Monday and Wednesday 2:30-3:50 pm, Hagey Hall 1104 Instructor Information Instructor: Professor Steven Weinstein Office: Hagey Hall 319 Office Phone: x33632 Office Hours: To be announced Email: [email protected] I tend not to check voicemail regularly, so please email if you need to leave a message. Course Description In the broadest sense, decision theory has to do with making decisions under conditions of uncertainty. Uncertainty can arise in science, when you have more than one hypothesis that could account for the data; in economics and finance, where there are numerous uncertainties regarding resources, interest rates, and the behaviour of other consumers; and politics, where you might be uncertain as to the intentions of either an ally or an enemy. The theory of rational choice, sometimes called “normative decision theory”, is concerned with how we should ideally go about making decisions. Given a well-defined set of preferences as to the outcomes, and given some probabilities as to the likelihood of the outcomes, what should we do? We’ll spend the first part of the course on this, using the excellent, short, and not-too-technical book by Gilboa. In the second part of the course, we’ll read a good portion of Daniel Kahneman’s book on how people actually make decisions, which is not always the same as how they should make decisions. This is obviously relevant to economics, which is why the field (which he co-invented) is sometimes called “behavioural economics”. More broadly, one can call it “descriptive decision theory”, as it attempts to describe the way that people actually reason. Kahneman, a psychologist, won the Nobel prize in Economics for this work, because of its importance in understanding actual economic behaviour. Moreover, it’s important to understanding ourselves. Prerequisites You should be comfortable with basic arithmetic and algebra, of which there will be a modest amount. No previous Philosophy courses are required. 1 Course Goals and Learning Outcomes Upon completion of this course, students should be able to: Understand the basics of expected utility theory, on which much of modern economics is based. Understand the objective and subjective notions of probability, and the use of probability in scientific inference. Understand the basics of voting theory and game theory, two cornerstones of political science. Understand the recent Nobel prize winning work on “behavioural economics”, which is playing an increasingly important role in not only economics but psychology, sociology, and marketing. Have a better understanding of your own decision making process, and the biases to which you are naturally prone. Course Requirements and Assessment Requirements: Do the reading, come to class, take the exams! Assessment Homework (4 times) Midterm exam Quiz (2 times) Final Total Date Feb 26 - Weighting 20% 35% 10% 35% 100% Homework: There will be homework assignments on the material in weeks 3, 4, 5 and 6. Midterm: There will be a midterm exam of one hour and twenty minutes. Quizzes: There will be two in-class quizzes on the Kahneman material. Final: There will be a final exam during the exam period. This will primarily be concerned with the Kahneman material. The exam will be no longer than the midterm. Required Texts Rational Choice, Itzhak Gilboa, MIT Press, Cambridge, 2010. Thinking, Fast and Slow, Daniel Kahneman, Farrar, Straus & Giroux, New York, 2011. 2 Course Outline Week 1 2 3 4 5 6 7 8 9 10 11 12 Date January 6, 8 January 13, 15 January 20, 22 January 27, 29 February 3, 5 February 10, 12 February 24, 26 March 3, 5 March 10, 12 March 17, 19 March 24, 26 March 31 and April 2 Topic No class Rationality and Utility Maximization Expected Utility Probability and Statistics Voting Theory Game theory Intro to psychology of decision making. Exam. Two systems for decision making Two systems for decision making Choices and rationality Choices and rationality Thinking about life. Review. Readings Due None Gilboa chapters 1- 3 Gilboa chapter 4 Gilboa chapter 5 Gilboa chapter 6 Gilboa chapter 7 Kahneman Intro Kahneman Part I Kahneman Part I Kahneman Part IV Kahneman Part IV Kahneman Part V Late Work Late work will not be accepted. Absence from exams is permitted on the condition that you submit a Verification of Illness form. Electronic Device Policy Cellphones may not be used in class. Computers may be used only for note-taking and course-related searches. Attendance Policy You are expected to attend class. Institutional-required statements for undergraduate course outlines approved by Senate Undergraduate Council, April 14, 2009 Cross-listed course Please note that a cross-listed course will count in all respective averages no matter under which rubric it has been taken. For example, a PHIL/PSCI cross-list will count in a Philosophy major average, even if the course was taken under the Political Science rubric. Academic Integrity Academic Integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo are expected to promote honesty, trust, fairness, respect and responsibility. Discipline: A student is expected to know what constitutes academic integrity, to avoid committing academic offences, and to take responsibility for his/her actions. A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course 3 professor, academic advisor, or the Undergraduate Associate Dean. When misconduct has been found to have occurred, disciplinary penalties will be imposed under Policy 71 – Student Discipline. For information on categories of offenses and types of penalties, students should refer to Policy 71 - Student Discipline. Grievance: A student who believes that a decision affecting some aspect of his/her university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70 Student Petitions and Grievances, Section 4. Appeals: A student may appeal the finding and/or penalty in a decision made under Policy 70 - Student Petitions and Grievances (other than regarding a petition) or Policy 71 - Student Discipline if a ground for an appeal can be established. Read Policy 72 - Student Appeals. Other sources of information for students Academic integrity (Arts) Academic Integrity Office (uWaterloo) Accommodation for Students with Disabilities Note for students with disabilities: The AccessAbility Services office, located in Needles Hall Room 1132, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with the AS office at the beginning of each academic term. 4