Rational Decision Making

Overview

Rational decision making a description of a theory of a how a rational person or agent would act in any situation. It forms the underpinning of classical economics and is used when designing artificially intelligent agents. The theory is dependent on the agent working from a statistical view of the world that they find themselves in and calculating an optimal set of choices in order to achieve a rational set of goals.

For a more comprehensive review of the way economists model decisions, please see: decisions in economics

Decision Making as Optimization

The fundamental concept in rational decision making is to that an agent is faced with several possible outcomes, each can occur with a given probabilty, and the agent chooses the path that optimizes a given criteria. Typically, this criteria is stated as an expectation.