Skip to main content
SpringerLink
Log in

Risk as a Consequence

  • Published:
Topoi Aims and scope Submit manuscript

Abstract

Expected-utility theory advances representation theorems that do not take the risk an act generates as a consequence of the act. However, a principle of expected-utility maximization that explains the rationality of preferences among acts must, for normative accuracy, take the act’s risk as a consequence of the act if the agent cares about the risk. I defend this conclusion against the charge that taking an act’s consequences to comprehend all the agent cares about trivializes the principle of expected-utility maximization.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Notes

  1. The evaluation of options gains still more efficiency by entertaining only consequences that options compared do not share.

  2. I take events as event-tokens, rather than event-types, and so with features such as time and place.

  3. Rabin (2000), however, maintains that the concavity of the agent’s utility curve is not a plausible expression of aversion to risk.

  4. Okasha (2016) distinguishes the two norms of expected-utility maximization. He has doubts about the stronger norm. Sections 3.4 and 3.5 address these doubts.

  5. I follow Savage in addressing a version of Allais’s paradox that uses a partition of states and their probabilities, although the original paradox, as Mongin (2014) notes, uses just probabilities of outcomes.

  6. Broome’s (1991, p. 103) principle of individuation by justifiers similarly limits individuation of consequences but does so objectively using the good and bad features of consequences rather than subjectively using an agent’s desires.

  7. I thank Lara Buchak for pointing out this objection.

  8. This is an application Theorem 2 of Krantz et al. (1971, p. 257).

  9. I thank Philippe Mongin, participants at the 2016 LMU conference, “New Trends in Rational Choice Theory,” and two anonymous referees for helpful comments.

References

  • Allais M (1953) Le comportement de l’homme rationnel devant le risque: critique des postulats et axiomes de l’école Américaine. Econometrica 21:503–546

    Article  Google Scholar 

  • Allingham M (2002) Choice theory: a very short introduction. Oxford University Press, Oxford

    Book  Google Scholar 

  • Bernoulli D, (1954/1738) Exposition of a new theory on the measurement of risk. Econometrica 22:23–36

    Article  Google Scholar 

  • Binmore K (2009) Rational decisions. Princeton University Press, Princeton, NJ

    Google Scholar 

  • Brigham E, Houston J (2009) Fundamentals of financial management, 12 edn. South-Western Cengage Learning, Mason

    Google Scholar 

  • Broome J (1991) Weighing goods. Blackwell, Oxford

    Google Scholar 

  • Buchak L (2013) Rationality and risk. Oxford University Press, Oxford

    Book  Google Scholar 

  • Dreier J (1996) Rational preference: decision theory as a theory of practical rationality. Theor Decis 40:249–276

    Article  Google Scholar 

  • Gibbard A, Harper W (1981/1978) Counterfactuals and two kinds of expected utility. In: Harper W, Stalnaker R, Pearce G (eds) Ifs: conditional, belief, decision, chance, and time. Reidel, Dordrecht, pp 153–190

    Google Scholar 

  • Hacking I (2001) Probability and inductive logic. Cambridge University Press, Cambridge

    Google Scholar 

  • Krantz D, Luce R, Suppes P, Tversky A. 1971. Foundations of measurement, vol 1. New York: Academic Press

    Google Scholar 

  • Lewis D (1979) Attitudes De Dicto and De Se. Philos Rev 88:513–543

    Article  Google Scholar 

  • Machina M (1982) ‘Expected Utility’ analysis without the independence axiom. Econometrica 50:277–323

    Article  Google Scholar 

  • Mongin P (2014) Le paradoxe d'Allais: comment lui rendre sa signification perdue. Rev écon 65:743–779

    Article  Google Scholar 

  • Okasha S (2016) On the interpretation of decision theory. Econ Philos 32:409–433

    Article  Google Scholar 

  • Parfit D (1984) Reasons and persons. Oxford University Press, Oxford

    Google Scholar 

  • Rabin M (2000) Risk aversion and expected-utility theory: a calibration theorem. Econometrica 68:1281–1292

    Article  Google Scholar 

  • Savage L, (1972/1954) The Foundations of Statistics, 2nd edn. Dover, New York

    Google Scholar 

  • Stefánsson HO, Bradley R (2015) Philos Sci 82:602–625

    Article  Google Scholar 

  • Weirich P (2015) Models of decision-making: simplifying choices. Cambridge University Press, Cambridge

    Book  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Philosophy Department, University of Missouri, Columbia, MO, 65203, USA

    Paul Weirich

Authors
  1. Paul Weirich
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Paul Weirich.

Ethics declarations

Conflict of interest

The author declares that he has no conflict of interest.

Ethical Approval

This article does not contain any studies with human participants or animals performed by any of the authors.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Weirich, P. Risk as a Consequence. Topoi 39, 293–303 (2020). https://doi.org/10.1007/s11245-018-9570-4

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11245-018-9570-4

Keywords

Search

Navigation