utility elicitation is the process to go from Rational Preferences to a utility function. Its a bad idea to use money to do this, because money is not linear.

Consider the best and worst possible events:

\begin{equation} \overline{S}, \underline{S} \end{equation}

We assign the best event to have utility \(1\), and worst to have utility \(0\):

\begin{equation} \begin{cases} U(\overline{S}) = 1 \\ U(\underline{S}) = 0 \end{cases} \end{equation}

Given some test event now \(S\), we try to find the \(p\) such that we can set up a lottery:

quadratic utility

\begin{equation} U(x) = \lambda x - x^{2} \end{equation}

where, \(\lambda>0\) controls risk aversion: as risk increases, utility increases concavely, then eventually utility falls

exponential utility

\begin{equation} U(x) = 1 - e^{-\lambda x} \end{equation}

where \(\lambda >0\) controls risk aversion. This is usually not plausible as utility because people’s utility doesn’t grow exponentially ever

power utility

see power utility

Take the utility function from a bunch of POMDPs and combine them together using a fusion function.

\begin{equation} U^{*}(b,a) = f(U^{*}(b_1, a) … U^{*}(b_{n}, a) \end{equation}

where \(f\) can be sum or min. The overall belief \(b\) is simply \(B_1 \times … \times B_{n}\), which combines all beliefs together.

utility theory is a set of theories that deals with rational decision making through maximizing the expected utility.

utility theory can be leveraged to choose the right actions in the observe-act cycle in a graphical network via decision networks

additional information

never have a utility function that’s infinite

If something has infinite utility, doing two of the good things is the same as doing one good thing, which is wrong.

Say going to a Taylor concert has \(+\infty\) utility. Then, you would be indifferent to the difference between Taylor + Harry vs. Taylor only. However, the former case clearly has higher utility as long as Harry concert doesn’t have negative utility.

Key focus: validation of decision making systems that operate over time. See also,

No silver bullet in validation, we must build a safety case.

Logistics

Lectures

• SU-CS238V MAR042025