Definition - What does Decision Theory mean?
Decision theory is a study of an agent's rational choices that supports all kinds of new progress in technology such as work on machine learning and artificial intelligence. Decision theory looks at how decisions are made, how multiple decisions influence one another, and how decision-making parties deal with uncertainty.
Decision theory is also known as theory of choice.
Techopedia explains Decision Theory
Decision theory involves normative or prescriptive decision theory, which provides models for optimal decision-making. It also includes descriptive decision theory that follows from observation. Either of these types of theory can be applied to different types of technologies – for instance, many of the enterprise software systems offered by vendors are described as decision support tools – and so logically, their engineers would benefit from a study of decision theory.
Similarly, in constructing machine learning tools and artificial intelligence technologies, scientists are studying decision theory closely. One way to think about this is that a close study of decision theory can reveal how human and computer decisions are similar, and how they are different, which leads researchers and engineers to close the gap between human cognitive capacity and the capacity of artificial intelligence entities.