Game Changer - the game theory podcast How do you decide? – Decision Theory and Uncertainty | with Itzhak Gilboa
6 snips
Dec 9, 2025 
Itzhak Gilboa, a Professor of Economics and Decision Sciences at HEC Paris, dives deep into decision theory and its complexities. He discusses how everyday choices, from using navigation apps to major life decisions, are influenced by different decision models. Gilboa critiques the standard Bayesian approach, arguing that rationality is not always defined by it. He explores the challenges of quantifying uncertainty, using climate forecasting as a case study. Alternative frameworks are proposed for dealing with ambiguity, emphasizing the practical role of decision theory in minimizing errors.
AI Snips
Chapters
Transcript
Episode notes
Decision Theory Works For Clear Problems
- Navigation apps show decision theory succeeds when objectives and data are clear.
- Itzhak Gilboa uses shortest-path as an example where modeling, utility and statistics solve decisions.
Expected Utility Is The Standard Rule
- Classical decision theory uses utility and probability (subjective if needed) to choose by maximizing expected utility.
- Expectation aggregates uncertain utilities and guides choices even when outcomes aren't numeric.
From Pascal To Modern Bayes
- Gilboa recounts Bayesian thinking tracing to Pascal and Bernoulli who used subjective probabilities.
- He describes how Bayesian ideas were formalized and championed by later axiomatic work.