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SUMMARY:Thermodynamics as a Theory of Decision-Making with Information Pro
 cessing Costs - Pedro Ortega (Max Planck Institute for Intelligent Systems
 )
DTSTART:20120803T130000Z
DTEND:20120803T140000Z
UID:TALK39128@talks.cam.ac.uk
CONTACT:Zoubin Ghahramani
DESCRIPTION:Perfectly rational decision-makers maximize expected utility\,
  but crucially ignore the resource costs incurred when determining optimal
  actions. Here we propose an information-theoretic formalization of bounde
 d rational decision-making where decision-makers trade off expected utilit
 y and information processing costs. As a result\, the decision-making prob
 lem can be rephrased in terms of well-known concepts from thermodynamics a
 nd statistical physics\, such that the same exponential family distributio
 ns that govern statistical ensembles can be used to describe the stochasti
 c choice behavior of bounded decision-makers.  Furthermore\, this framewor
 k allows rederiving a number of decision-making schemes including risk-sen
 sitive and robust (minimax) decision-making as well as more recent approxi
 mately optimal schemes that are based on the relative entropy. In the limi
 t when resource costs are ignored\, the maximum expected utility principle
  is recovered. Since most of the mathematical machinery can be borrowed fr
 om statistical physics\, the main contribution is to show how a thermodyna
 mic model of bounded rationality can provide a unified view of diverse dec
 ision-making phenomena. 
LOCATION:Engineering Department\, CBL Room BE-438
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