Utility Theory and Decision Theory

The conjunction of utility theory and decision theory involves formulations of decision making in which the criteria for choice among competing alternatives are based on numerical representations of the decision agent’s preferences and values. Utility theory as such refers to those representations and to assumptions about preferences that correspond to various numerical representations. Although it is a child of decision theory, utility theory has emerged as a subject in its own right as seen, for example, in the contemporary review by Fishburn (see REPRESENTATION OF PREFERENCES). Readers interested in more detail on representations of preferences should consult that essay.