Evidential decision theory (EDT) is a school of thought within decision theory which states that, when a rational agent is confronted with a set of possible actions, one should select the action with the highest news value, that is, the action which would be indicative of the best outcome in expectation if one received the "news" that it had been taken.
"[1]: 7 EDT contrasts with causal decision theory (CDT), which prescribes taking the action that will causally produce the best outcome.
While these two theories agree in many cases, they give different verdicts in certain philosophical thought experiments.
For example, EDT prescribes taking only one box in Newcomb's paradox, while CDT recommends taking both boxes.
[1]: 22–26 In a 1976 paper, Allan Gibbard and William Harper distinguished between two kinds of expected utility maximization.
EDT proposes to maximize the expected utility of actions computed using conditional probabilities, namely where
[2] This is in contrast to the counterfactual formulation of expected utility used by causal decision theory where the expression
are not always equal, these formulations of expected utility are not equivalent,[2] leading to differences in actions prescribed by EDT and CDT.
In Newcomb's paradox, there is a predictor, a player, and two boxes designated A and B.
The predictor is able to reliably predict the player's choices— say, with 99% accuracy.
[1]: 22 Conversely, causal decision theory (CDT) would have recommended that the player takes both boxes, because by that time the predictor has already made a prediction (therefore, the action of the player will not affect the outcome).
In this variation on the Prisoner's Dilemma thought experiment, an agent must choose whether to cooperate or defect against her psychological twin, whose reasoning processes are exactly analogous to her own.
Evidential decision theory recommends cooperating in this situation, because Aomame's decision to cooperate is strong evidence that her psychological twin will also cooperate, meaning that her expected payoff is $5.
On the other hand, if Aomame defects, this would be strong evidence that her twin will also defect, resulting in an expected payoff of $1.
Even if one puts less credence on evidential decision theory, it may be reasonable to act as if EDT were true.
Namely, because EDT can involve the actions of many correlated decision-makers, its stakes may be higher than causal decision theory and thus take priority.
[5] David Lewis has characterized evidential decision theory as promoting "an irrational policy of managing the news".
[6] James M. Joyce asserted, "Rational agents choose acts on the basis of their causal efficacy, not their auspiciousness; they act to bring about good results even when doing so might betoken bad news.