Understanding bruno de finetti’s decision theory: A basic algorithm to support decision-making behaviour

Abstract

The aim of this work is to present an algorithm inspired to Bruno de Finetti’s decision theory, limited to the version proposed by him in the essay “La probabilità: guida nel pensare e nell’agire” released in 1965. This work is focused on decision theory within the subjective theory of probability conceived by de Finetti. It opens with a brief overview of his theory of probability, followed by a methodological analysis functional to introduce the renowned de Finetti’s example model given for the solution of decision problems. Starting from this example, this work presents a mathematical generalization of the decision algorithm. Afterwards, a real decisional algorithm written in mathematical-style pseudo code is developed. Finally, some conclusive remarks are discussed along with possible future developments.