Foundations of decision analysis: Along the way

This paper offers a personal perspective on the development of decision theory and related subjects during the past half century. It first reviews six milestones in the foundation of decision analysis that are associated with Frank P. Ramsey, John von Neumann and Oskar Morgenstern, Leonard J. Savage, Maurice Allais and Ward Edwards, West Churchman and Russell Ackoff, and Kenneth Arrow. It then gives a personal account of further developments over the past 30 years in linear utility theory, subjective probability and ambiguity, nonlinear preference and utility, stochastic dominance and inequality analysis, multiattribute utility theory, and the theory of social choice. The paper could be viewed as a supplement to the author’s extensive review of utility theory in Management Science some 20 years ago. However, it makes no claim of completeness since its main aim is to recall important debts and describe what it has been like to be part of the development of decision analysis in the past few decades.