Abstract

The expected utility of an option for a decision maker is defined with respect to probability and utility functions that represent the decision maker’s beliefs and desires. Therefore, as the decision maker’s beliefs and desires change, the expected utility of an opinion may change. Some options are such that their realizations change beliefs and desires in ways that change the expected utilities of the options. If a decision is made among options that include one or more of these special options, I call it a decision made in a dynamic setting.The rule to maximize expected utility, MEU, is insufficient for decisions in dynamic settings. It does not say how to take account of information about the way in which the realization of an option would change the expected utility of the option.