Rational Decisions in Large Worlds

Abstract

This paper argues that we need to look beyond Bayesian decision the, for an answer to the general problem of making national decision under uncertainty. The view that Bayesian decision theory is only genuinely valid in a small world was asserted very firmly by SAVAGE [1951] when laying down the principles of the theory in his path - breaking Foundations of Statistics. He makes the distinction between small and large worlds in a folksy way by quoting the proverbs "Look before you leap" and "Cross that bridge when you corne to it". You are in a small world if it is feasible always to look before you leap. You are in a large world if there are some bridges that you cannot cross before you corne to them.