Decision theory provides a formal framework for how agents should make choices under uncertainty, drawing on ideas from philosophy, probability, and causality. Despite significant progress, the field still lacks a unified modeling language, and key concepts - such as the distinction between subjective and objective elements, or what it means for a decision theory to perform well - are often left implicit. This can make it difficult to evaluate and compare competing theories, particularly in controversial cases. In this paper, we address these issues by introducing a formal framework for decision theory based on nonparametric structural equation models (NPSEMs), a well-established tool in causal inference. NPSEMs provide a unified foundation for representing agents, counterfactuals, and causal relationships, allowing for unambiguous definitions of EDT and CDT. Building on this foundation, we propose a novel decision theory - personal decision theory - which instructs agents to maximize a subjective model of their own counterfactual utility. We introduce a formal performance metric based on hypothetical interventions that enforce a given decision theory across a population - such as might be achieved through education or policy -- and show that, under certain assumptions, personal decision theory is optimal with respect to this metric. Throughout, we use the smoking lesion problem as a running example and conclude with a formal analysis of Newcomb's problem. Our aim is to provide decision theory with a clearer modeling language and firmer evaluative ground, thereby enabling more rigorous comparisons and facilitating conceptual progress in the field.
In a world of generative AI, candidate insights are abundant; what is scarce is the capacity to discern which matter, to act on them in the right amount and order, and to forget the rest so the system can adapt. We argue these scarcities are governed by one object and build a framework around it. We define an insight strictly as a lever with an identified, measurable effect on an objective, and rank candidates by decision-relevance via the expected value of information rather than novelty. We show action carries an order, not only a size: under realistic belief dynamics, content "touches" are non-commuting operators, so a fixed plan delivered in different orders yields different outcomes, defining a sequence premium. We observe that the value of any lever is a shadow price, unifying pharmaceutical marketing, equity selection, and manufacturing as one leverage-discovery problem. Most speculatively, we propose APOHA, a theory in which forgetting is not the disposal of knowledge but the operator by which value is learned: the value of a retained item is the counterfactual cost of forgetting it, a learning system is the residue of maximal forgetting subject to preserved value, and higher-order value is the structure that survives repeated forgetting (a renormalisation-relevant invariant), with consolidation as its conjugate. We state the central open problem (a non-trivial attractor with a spectral gap) and test the forgetting theory: operationalising APOHA as an agent on a non-stationary obesity-treatment decision world over 30 seeds, adaptive forgetting cut cumulative decision-regret by 24-32% against never-forget and a fixed half-life, kept a ~6x smaller, cleaner memory, and converged stably; notably, blind forgetting was worse than never forgetting, so the benefit is specific to value-aware forgetting. A multi-disciplinary critique stress-tests the whole.
Sebastian Benthall, Alan Lujancs.CE cs.AI cs.GT econ.TH
We present two new classes of causal models of decision-making agents. Our approach is motivated by the needs of modeling the economics of computing systems. These systems are composed of subsystems and can exhibit endogenous limits on cognitive resources and value discounting. Structural Causal Decision Models (SCDMs) expand on Structural Causal Influence Models. Like SCIMs, they explicitly represent the causal relationships between model variables and the payoffs of agent decisions. Additionally, agent decisions can be constrained by their causal antecedents, and SCDMs can have open root variables for which no probability distribution or structural equation is given. We show that SCDMs have a well-defined and computationally useful property of composability. Building on SCDMs, we then define a Structural Causal Decision Process (SCDP) as a recurring SCDM with a discount variable. SCDPs benefit from the useful composition properties of SCDMs. Moreover, SCDPs are strictly more expressive than POMDPs because they do not assume rational belief formation. Indeed, an SCDP can endogenously model the memory-formation process, and is thus useful for modeling resource rational agents in dynamic settings. SCDPs are also capable of modeling variable discounting, a tool used widely in social scientific modeling. We pose that SCDPs are a useful framework for policy simulation for the digital economy, mechanism design for information systems, and digital twin modeling of cyberinfrastructure.