This book presents sequential decision theory from a novel algorithmic
information theory perspective. While the former is suited for active
agents in known environment, the latter is suited for passive prediction
in unknown environment. The book introduces these two different ideas
and removes the limitations by unifying them to one parameter-free
theory of an optimal reinforcement learning agent embedded in an unknown
environment. Most AI problems can easily be formulated within this
theory, reducing the conceptual problems to pure computational ones.
Considered problem classes include sequence prediction, strategic games,
function minimization, reinforcement and supervised learning. The
discussion includes formal definitions of intelligence order relations,
the horizon problem and relations to other approaches.