What are the minimal requirements of rational choice? Arguments from the sequential-decision setting

Theory and Decision 68 (4):463-487 (2010)
Authors
Katie Steele
Australian National University
Abstract
There are at least two plausible generalisations of subjective expected utility (SEU) theory: cumulative prospect theory (which relaxes the independence axiom) and Levi’s decision theory (which relaxes at least ordering). These theories call for a re-assessment of the minimal requirements of rational choice. Here, I consider how an analysis of sequential decision making contributes to this assessment. I criticise Hammond’s (Economica 44(176):337–350, 1977; Econ Philos 4:292–297, 1988a; Risk, decision and rationality, 1988b; Theory Decis 25:25–78, 1988c) ‘consequentialist’ argument for the SEU preference axioms, but go on to formulate a related diachronic-Dutch-book-style’ argument that better achieves Hammond’s aims. Some deny the importance of Dutch-book sure losses, however, in which case, Seidenfeld’s (Econ Philos 4:267–290, 1988a) argument that distinguishes between theories that relax independence and those that relax ordering is relevant. I unravel Seidenfeld’s argument in light of the various criticisms of it and show that the crux of the argument is somewhat different and much more persuasive than what others have taken it to be; the critical issue is the modelling of future choices between ‘indifferent’ decision-tree branches in the sequential setting. Finally, I consider how Seidenfeld’s conclusions might nonetheless be resisted.
Keywords Sequential choice  Dynamic decision making  Independence axiom  Ordering axiom  Diachronic Dutch book argument  Expected utility theory
Categories (categorize this paper)
DOI 10.1007/s11238-009-9145-3
Options
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

Our Archive


Upload a copy of this paper     Check publisher's policy     Papers currently archived: 38,086
Through your library

References found in this work BETA

The Foundations of Statistics.Leonard J. Savage - 1954 - Wiley Publications in Statistics.
On Indeterminate Probabilities.Isaac Levi - 1974 - Journal of Philosophy 71 (13):391-418.

View all 28 references / Add more references

Citations of this work BETA

You’Ve Come a Long Way, Bayesians.Jonathan Weisberg - 2015 - Journal of Philosophical Logic 44 (6):817-834.
Safeguards of a Disunified Mind.Wlodek Rabinowicz - 2014 - Inquiry: An Interdisciplinary Journal of Philosophy 57 (3):356-383.

Add more citations

Similar books and articles

A Mistake in Dynamic Coherence Arguments?Brian Skyrms - 1993 - Philosophy of Science 60 (2):320-328.

Analytics

Added to PP index
2013-12-01

Total views
60 ( #114,290 of 2,313,437 )

Recent downloads (6 months)
6 ( #130,349 of 2,313,437 )

How can I increase my downloads?

Monthly downloads

My notes

Sign in to use this feature