Belief guides action

Chapter 2 develops the pragmatic justification for probabilism through decision theory. Beginning with the Dutch Book argument—showing that non-probabilistic betting prices guarantee losses—Easwaran progresses through increasingly sophisticated representation theorems. Ramsey's approach constructs numerical utilities and probabilities from preferences over hypothetical acts, while Savage's framework introduces acts as functions from states to consequences, proving that rational preferences correspond to maximizing expected utility with probabilistic degrees of belief. The chapter addresses complexities including risk aversion (Buchak's challenge via the Allais paradox), act-state correlations (Newcomb problems, distinguishing evidential, causal, and functional decision theories), and the distinction between constructivist and realist interpretations of credence. Key insight: pragmatic rationality—avoiding dominated strategies and incoherent preferences—requires implicit conformity to probability axioms, holding across diverse agents regardless of their internal architecture.