Nicolausian discounting

Nicolausian discounting is a heuristic technique meant to simplify decision-making involving very small probabilities by ignoring them. The term was coined by philosopher Bradley Monton in a 2019 paper. He defined it this way: "For decision-making, small probabilities should be discounted down to zero before maximizing expected utility."[1]

Monton named the concept after Nicolaus I Bernoulli, who suggested it as a solution to his St. Petersburg paradox. Monton translates Bernoulli as writing in 1714 that "cases that have a very small probability must be neglected and assumed to be zero."[2]

The term has gained some currency and been mentioned in other writings in philosophy.[3][4][5]

Notes

References

  • Beckstead, Nick; Thomas, Teruji (May 2023). "A Paradox for Tiny Probabilities and Enormous Values". Noûs. 58 (2): 431–455. doi:10.1111/nous.12462. ISSN 0029-4624.
  • Cibinel, Pietro (October 2023). "A Dilemma for Nicolausian Discounting". Analysis. 83 (4): 662–672. doi:10.1093/analys/anac095. ISSN 0003-2638.
  • Monton, Bradley (June 2019). "How to Avoid Maximizing Expected Utility". Philosophers' Imprint. 19 (18): 1–25. ISSN 1533-628X.
  • Tarsney, Christian (November 2024). "Against Anti‐fanaticism". Philosophy and Phenomenological Research. 110 (2): 734–753. doi:10.1111/phpr.13120. ISSN 0031-8205.
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