Bayesian Rationality and Decision Making: A Critical Review

Abstract

Bayesianism is the predominant philosophy of science in North-America, the most important school of statistics world-wide, and the general version of the rational-choice approach in the social sciences. Although often rejected as a theory of actual behavior, it is still the benchmark case of perfect rationality. The paper reviews the development of Bayesianism in philosophy, statistics and decision making and questions its status as an account of perfect rationality. Bayesians, who otherwise are squarely in the empiricist camp, invoke a priori reasoning when they recommend Bayesian methods - a recommendation that is not justified by their own standards.