Decision theory for agents with incomplete preferences
Orthodox decision theory gives no advice to agents who hold two goods to be incommensurate in value because such agents will have incomplete preferences. According to standard treatments, rationality requires complete preferences, so such agents are irrational. Experience shows, however, that incomplete preferences are ubiquitous in ordinary life. In this paper, we aim to do two things: (1) show that there is a good case for revising decision theory so as to allow it to apply non-vacuously to agents with incomplete preferences, and (2) to identify one substantive criterion that any such non-standard decision theory must obey. Our criterion, Competitiveness, is a weaker version of a dominance principle. Despite its modesty, Competitiveness is incompatible with prospectism, a recently developed decision theory for agents with incomplete preferences. We spend the final part of the paper showing why Competitiveness should be retained, and prospectism rejected.
|Date of creation:||09 Sep 2013|
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- Broome, John, 2006.
Oxford University Press, number 9780199297702, December.
- Amartya Sen, 1996.
"Maximization and the Act of Choice,"
Harvard Institute of Economic Research Working Papers
1766, Harvard - Institute of Economic Research.
- Mandler, Michael, 2005. "Incomplete preferences and rational intransitivity of choice," Games and Economic Behavior, Elsevier, vol. 50(2), pages 255-277, February.
- Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, Oxford University Press, vol. 69(1), pages 99-118.
- Bykvist, Krister, 2006. "Prudence for Changing Selves," Utilitas, Cambridge University Press, vol. 18(03), pages 264-283, September.
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