Some quotes might help.
Peterson defines an act “as a function from a set of states to a set of outcomes”
The rest of the details are contained in this quote: “The key idea in von Neumann and Morgenstern’s theory is to ask the decision maker to state a set of preferences over risky acts. These acts are called lotteries, because the outcome of each act is assumed to be randomly determined by events (with known probabilities) that cannot be controlled by the decision maker”.
The terminology of risky acts is more widespread than Peterson: http://staff.science.uva.nl/~stephane/Teaching/UncDec/vNM.pdf
However, I don’t particularly see the need to get caught up in the details of what some particular people said: mostly I just want a clear way of saying what needs to be said.
Perhaps the best thing to do is (a) be more explicit about what lotteries are in the VNM system; and (b) be less explicit about how lotteries and acts interact. Use of the more neutral word “options” might help here [where options are the things the agent is choosing between].
Specifically, I could explicitly note that lotteries are the options on the VNM account (which is not to say that all lotteries are options but rather that all options are lotteries on this account), outline everything in terms of lotteries and then, when talking about the issue of action guidance, I can note that VNM, at least in the standard formulation, requires that an agent already has preferences over options and note that this might seem undesirable.
If I understand correctly, Peterson is defining “acts” and “risky acts” as completely separate things (functions from states to outcomes, and lotteries over outcomes, respectively). If that’s true, it clears up the confusion, but that seems like extraordinarily bad terminology.
Okay, well I’ve rewritten this for the next update in a way that hopefully resolves the issues.
If you have time, once the update is posted I’d love to know whether you think the rewrite is successful. In any case, thanks for taking the time to comment so far.