Philosophical Studies 179 (5):1621-1648 (2021)

Authors
Jean Baccelli
Oxford University
Philippe Mongin
Last affiliation: Centre National de la Recherche Scientifique
Abstract
The basic axioms or formal conditions of decision theory, especially the ordering condition put on preferences and the axioms underlying the expected utility formula, are subject to a number of counter-examples, some of which can be endowed with normative value and thus fall within the ambit of a philosophical reflection on practical rationality. Against such counter-examples, a defensive strategy has been developed which consists in redescribing the outcomes of the available options in such a way that the threatened axioms or conditions continue to hold. We examine how this strategy performs in three major cases: Sen's counterexamples to the binariness property of preferences, the Allais paradox of EU theory under risk, and the Ellsberg paradox of EU theory under uncertainty. We find that the strategy typically proves to be lacking in several major respects, suffering from logical triviality, incompleteness, and theoretical insularity. To give the strategy more structure, philosophers have developed “principles of individuation”; but we observe that these do not address the aforementioned defects. Instead, we propose the method of checking whether the strategy can overcome its typical defects once it is given a proper theoretical expansion. We find that the strategy passes the test imperfectly in Sen's case and not at all in Allais's. In Ellsberg's case, however, it comes close to meeting our requirement. But even the analysis of this more promising application suggests that the strategy ought to address the decision problem as a whole, rather than just the outcomes, and that it should extend its revision process to the very statements it is meant to protect. Thus, by and large, the same cautionary tale against redescription practices runs through the analysis of all three cases. A more general lesson, simply put, is that there is no easy way out from the paradoxes of decision theory.
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DOI 10.1007/s11098-021-01723-z
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References found in this work BETA

The Foundations of Statistics.Leonard J. Savage - 1954 - Wiley Publications in Statistics.
Risk and Rationality.Lara Buchak - 2013 - Oxford University Press.
Theory of Games and Economic Behavior.John Von Neumann & Oskar Morgenstern - 1944 - Princeton, NJ, USA: Princeton University Press.
Decision Theory with a Human Face.Richard Bradley - 2017 - Cambridge University Press.

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