Sometimes a series of choices do not serve one's concerns well even though each choice in the series seems perfectly well suited to serving one's concerns. In such cases, one has a dynamic choice problem. Otherwise put, one has a problem related to the fact that one's choices are spread out over time. This survey reviews some of the challenging choice situations and problematic preference structures that can prompt dynamic choice problems. It also reviews (...) some proposed solutions, and explains how some familiar but potentially puzzling phenomena — including, for example, self-destructive addictive behavior and dangerous environmental destruction — have been illuminated by dynamic choice theory. (shrink)

This is a major contribution to the theory of rational choice which will be of particular interest to philosophers and economists. The author sets out the foundations of rational choice, and then sketches a dynamic choice framework in which principles of ordering and independence follow from a number of apparently plausible conditions. However, there is potential conflict among these conditions, and when they are weakened to avoid it the usual foundations of rational choice no longer (...) prevail. The thrust of the argument is to suggest that the theory of rational choice is less deterministic than many suppose. (shrink)

A dynamic choice mechanism (e.g. sophisticated choice) is a rule transforming a sequence of orderings into actual choices. The dynamic choice literature analysing such rules is restricted to the case of strict preferences. The present paper allows also for weak preferences. This generalisation is necessary since in dynamic utility models decision makers are typically endowed with orderings which can be represented by continuous utility functions. Such a representation, however, requires the orderings to be a (...) weak ordering. In the presence of weak orderings the classical choice mechanisms have to be re-examined. This paper develops and analyses new choice mechanisms and relates them to the notion of a subgame-perfect equilibrium. (shrink)

From the viewpoint of the independence axiom of expected utility theory, an interesting empirical dynamic choice problem involves the presence of a “global risk,” that is, a chance of losing everything whichever safe or risky option is chosen. In this experimental study, participants have to allocate real money between a safe and a risky project. Treatment variable is the particular decision stage at which a global risk is resolved: (i) before the investment decision; (ii) after the investment decision, (...) but before the resolution of the decision risk; (iii) after the resolution of the decision risk. The baseline treatment is without global risk. Our goal is to investigate the isolation effect and the principle of timing independence under the different timing options of the global risk. In addition, we examine the role played by anticipated and experienced emotions in the choice problem. Main findings are a violation of the isolation effect, and support for the principle of timing independence. Although behavior across the different global risk cases shows similarities, we observe clear differences in people’s affective responses. This may be responsible for the conflicting results observed in earlier experiments. Dependent on the timing of the global risk different combinations of anticipated and experienced emotions influence decision making. (shrink)

From the viewpoint of the independence axiom of expected utility theory, an interesting empirical dynamic choice problem involves the presence of a “global risk,” that is, a chance of losing everything whichever safe or risky option is chosen. In this experimental study, participants have to allocate real money between a safe and a risky project. Treatment variable is the particular decision stage at which a global risk is resolved: (i) before the investment decision; (ii) after the investment decision, (...) but before the resolution of the decision risk; (iii) after the resolution of the decision risk. The baseline treatment is without global risk. Our goal is to investigate the isolation effect and the principle of timing independence under the different timing options of the global risk. In addition, we examine the role played by anticipated and experienced emotions in the choice problem. Main findings are a violation of the isolation effect, and support for the principle of timing independence. Although behavior across the different global risk cases shows similarities, we observe clear differences in people’s affective responses. This may be responsible for the conflicting results observed in earlier experiments. Dependent on the timing of the global risk different combinations of anticipated and experienced emotions influence decision making. (shrink)

One of the main contributions of Richard Bradley’s book is an elegant extension of Jeffrey’s Logic of Decision that countenances the evaluation of conditional prospects. This extension offers a promising new setting in which to model dynamic choice. In Bradley’s framework, plans can be understood as conditionals of an appropriate sort, while dynamic consistency can be viewed as providing a constraint on the evaluation of conditionals across time. In this paper, we study connections between planning conditionals and (...) dynamic consistency. (shrink)

How can one knowingly choose against one's best judgment? This is both a traditional philosophical puzzle and a realistic problem in our everyday life. This dissertation is an exposition and examination of a recent work, by George Ainslie, with regard to its innovative explanation as well as rational solution of such a problem. With the help of the new Ainsliean model, I have also sought to offer some analysis of a number of issues that I believe are important to the (...) understanding of the nature of practical rationality. ;The central question for Ainslie's approach to the dynamic problem of preference change is how to justify the "bundling" idea underlying his solution of the problem by adopting a "personal rule." The bundling idea is a belief in the relation between a series of similar choices as each predicting the direction of all the later choices. Being able to think in terms of this bundling idea is a powerful means of abstaining from defection, though it requires considerable cognitive effort. I try to defend the plausibility of such a personal-rule approach. But Ainslie's own account falls short of showing the ultimate necessity of the bundling idea, viz., why the collapse of the whole sequence of choices would necessarily follow from one defection. My argument hinges on demonstrating that neither a causal consideration about the links between similar choices, nor a prudential consideration about the possible risk involved in certain actions is sufficient for understanding the necessity: we need a normative perspective instead. ;This leads to my analysis of the conditions under which a normative solution can be justified. The analysis also delineates the type of dynamic choice situations Ainslie's approach may adequately fit, or have the greatest advantage. Some underlying hypothesis about the status and role of cognition in desire and higher-level motivation is carefully discussed; and the cognitive, deliberative, and affective aspects of the adoption of a rule is explored. During my discussions, I also compare Ainslie's approach with other theories in the domain of practical reasoning, such as that of Donald Davidson's, Jon Elster's, Michael Bratman's, Edward McClennen's, and David Gauthier's, in terms of their explanatory power, or their scope of application, limits, and complementarity. ;Ainslie's motivational model of mind has apparent as well as potential implications for a group of interesting philosophical issues. They include the nature of willpower, the nature of practical rationality as well as moral rules, personal identity, autonomy, and the existentialist theme on self-creation. My conclusion is that the clarification of the metaphysical underpinnings of the Ainsliean model can help to shed some light on these issues. (shrink)

This paper contrasts a picoeconomic approach to theexplanation of akrasia with Davidson's divided-mind approach and defends theformer in a wider context. The distinctive merits of a picoeconomic model of mindlie in the following aspects: First, it relies on a scientifically well-groundeddiscovery about motivational dynamics of animals for its explanation of preference change,which elucidates or materializes some philosophers' speculations both about thepossible mismatch between valuation and motivation and about the relevance of temporalfactors to akrasia. Second, it grounds the necessity of endogenous (...) higher-order constraints,expressible in forms of judgment, in an intrapersonal dynamic process of interactivefirst-order temporary preferences. Thus the motivational basis for the normativeconstruction of the rationality of `best judgment' can also be illuminated with this model. (shrink)

review of McLennen's *Rationality and Dynamic Choice*. The topic is important and the discussion is powerful. Some connection with modelling and simulation would be valuable.

This paper focuses on the comparison of individual and group decision-making, in a stochastic inter-temporal problem in two decision environments, namely risk and ambiguity. Using a consumption/saving laboratory experiment, we investigate behaviour in four treatments: individual choice under risk; group choice under risk; individual choice under ambiguity and group choice under ambiguity. Comparing decisions within and between decision environments, we find an anti-symmetric pattern. While individuals are choosing on average closer to the theoretical optimal predictions, compared (...) to groups in the risk treatments, groups tend to deviate less under ambiguity. Within decision environments, individuals deviate more when they choose under ambiguity, while groups are better planners under ambiguity rather than under risk. Our results extend the often observed pattern of individuals behaving more optimally under risk, to its dynamic dimension. (shrink)

We examine if and to what extent choice dispositions can allow dependence on contexts and maintain consistency over time, in a dynamic environment under uncertainty. We focus on one of the context dependence properties, opportunity dependence because of being affected by anticipated regret, where the consequentialist choice framework is maintained. There are two sources of potential inconsistency: one is arrival of information, and the other is changing opportunities. First, we go over the general method of resolution of (...) potential inconsistency, by taking any kinds of inconsistency as given constraints. Second, we characterize a class of choice dispositions that are consistent to information arrival, but may be inconsistent to changing opportunities. Finally, we consider the overall requirement of dynamic consistency and show that it necessarily implies each of consistency to information arrival and independence of choice opportunities. The last result states that the two kinds of potential inconsistency cannot “compensate” each other to recover dynamic consistency overall. (shrink)

Because emotion regulation processes operate over time, they potentially change the context in which subsequent ER processes occur. To test this proposal, fifty-two healthy participants completed the ER choice task. Thirty standardized low- and high-intensity negative images were used to generate different emotional contexts in which participants selected between distraction or reappraisal strategies to decrease the intensity of their negative emotion. Participants then implemented their selected strategy and rated their negative emotion. Using a dynamic perspective, we examined as (...) predictors of ER strategy choice, in addition to current stimulus intensity, several contextual factors from the immediately preceding trial: preceding stimulus intensity and strategy choice, and the intensity of negative affect following the previous strategy implementation and thus preceding the current trial. Results replicated earlier findings that participants are more likely to choose distraction for high-intensity images. Extending earlier findings, selecting reappraisal in the preceding trial and greater negative affect preceding the current trial were associated with lower odds of choosing distraction. The lack of significant interactions among the current and preceding trial factors suggests that these effects on ER choice were direct and not through moderating the effect of current stimulus intensity. These findings support dynamic theories of ER. (shrink)

Over the last two decades, semantic theory has been marked by a continuing shift from a static view of meaning to a dynamic one. The increasing interest in extending semantic analysis from isolated sentences to larger units of discourse has fostered the intensive study of anaphora and coreference, and this has engendered a shift from viewing meaning as truth conditions to viewing it as the potential to change the "informational context".

Individuals make decisions under uncertainty every day based on incomplete information concerning the potential outcome of the choice or chance levels. The choices individuals make often deviate from the rational or mathematically objective solution. Accordingly, the dynamics of human decision-making are difficult to capture using conventional, linear mathematical models. Here, we present data from a two-choice task with variable risk between sure loss and risky loss to illustrate how a simple nonlinear dynamical system can be employed to capture (...) the dynamics of human decision-making under uncertainty (i.e., multi-stability, bifurcations). We test the feasibility of this model quantitatively and demonstrate how the model can account for up to 86% of the observed choice behavior. The implications of using dynamical models for explaining the nonlinear complexities of human decision-making are discussed, as well as the degree to which nonlinear dynamical systems theory might offer an alternative framework for understanding human decision-making processes. (shrink)

In this paper, we analyze an intra-personal game where a decision-maker is summarized by a succession of selves. Selves may (or may not) have conflicting interests, and earlier selves may have imperfect knowledge of the preferences of future selves. At date 1, self-1 chooses a menu, at date 2, the preferences of self-2 realize and self-2 chooses an item from the menu. We show that equilibrium choice is consistent with either a preference for flexibility, a preference for betweenness or (...) a preference for systematic restriction. Overall, the analysis reconciles the decision–theoretic approach of choice over time with the game–theoretic multiple-selves approach. (shrink)

Research on multinational inter-organizational relationships has demonstrated that the capabilities of small and medium sized enterprises can be developed via partnerships, but at present, we lack studies that relate the development of such capabilities to the management of business governance structure. This study provides a new perspective on internationalized SME marketing strategies in the global context. Using a dynamic capability view of firms, the study develops hierarchical regression models linking global dynamic capabilities and governance structure. This study empirically (...) verifies the research framework from 206 internationalized SME Taiwanese firms. The results confirm previous studies that indicate positive correlations between market orientation, learning orientation, and global dynamic capabilities. The results also indicate that the development of global dynamic capabilities impacts the choice of governance structure in firms. Our study suggests that internationalized SMEs strategically manage their autonomy and strategic options by choosing combinations of different relationship types while they decide to develop global marketing capabilities and global design capability, or both. The study also found that market orientation and learning orientation act as enabling mechanisms for building global dynamic capabilities. (shrink)

Individuals make decisions under uncertainty every day. Decisions are based on in- complete information concerning the potential outcome or the predicted likelihood with which events occur. In addition, individuals’ choices often deviate from the rational or mathematically objective solution. Accordingly, the dynamics of human decision making are difficult to capture using conventional, linear mathematical models. Here, we present data from a 2-choice task with variable risk between sure loss and risky loss to illustrate how a simple nonlinear dynamical system (...) can be employed to capture the dynamics of human decision making under uncertainty (i.e., multistability, bifurcations). We test the feasibility of this model quantitatively and demonstrate how the model can account for up to 86% of the observed choice behavior. The implications of using dynamical models for explaining the nonlin- ear complexities of human decision making are discussed as well as the degree to which the theory of nonlinear dynamical systems might offer an alternative framework for understanding human decision making processes. (shrink)

This paper is an original attempt to understand the foundations of economic reasoning. It endeavors to rigorously define the relationship between subjective interpretations and objective valuations of such interpretations in the context of theoretical economics. This analysis is substantially expanded through a dynamic approach, where the truth of a valuation results in an updated interpretation or changes in the agent's subjective belief regarding the effectiveness of the selected action as well as the objective reality of the effectiveness of all (...) other possible actions (i.e. consequence realization). Complications arise when the economic agent is presented with a set of actions that render ambiguous preference, or when the effectiveness of an action cannot be perceived upon its selection, thereby necessitating a different theory of choice and consequence realization. (shrink)

Free Choice is the principle that possibly p or q implies and is implied by possibly p and possibly q. A variety of recent attempts to validate Free Choice rely on a nonclassical semantics for disjunction, where the meaning of p or q is not a set of possible worlds. This paper begins with a battery of impossibility results, showing that some kind of nonclassical semantics for disjunction is required in order to validate Free Choice. The paper (...) then provides a positive account of Free Choice, by identifying a family of dynamic semantics for disjunction that can validate the inference. On all such theories, the meaning of p or q has two parts. First, p or q requires that our information is consistent with each of p and q. Second, p or q narrows down our information by eliminating some worlds. It turns out that this second component of or is well behaved: there is a strongest such meaning that p or q can express, consistent with validating Free Choice. The strongest such meaning is the classical one, on which p or q eliminates any world where both p and q are false. In this way, the classical meaning of disjunction turns out to be intimately related to the validity of Free Choice. (shrink)

This paper develops a semantic solution to the puzzle of Free Choice permission. The paper begins with a battery of impossibility results showing that Free Choice is in tension with a variety of classical principles, including Disjunction Introduction and the Law of Excluded Middle. Most interestingly, Free Choice appears incompatible with a principle concerning the behavior of Free Choice under negation, Double Prohibition, which says that Mary can’t have soup or salad implies Mary can’t have soup (...) and Mary can’t have salad. Alonso-Ovalle 2006 and others have appealed to Double Prohibition to motivate pragmatic accounts of Free Choice. Aher 2012, Aloni 2018, and others have developed semantic accounts of Free Choice that also explain Double Prohibition. -/- This paper offers a new semantic analysis of Free Choice designed to handle the full range of impossibility results involved in Free Choice. The paper develops the hypothesis that Free Choice is a homogeneity effect. The claim possibly A or B is defined only when A and B are homogenous with respect to their modal status, either both possible or both impossible. Paired with a notion of entailment that is sensitive to definedness conditions, this theory validates Free Choice while retaining a wide variety of classical principles except for the transitivity of entailment. The homogeneity hypothesis is implemented in two different ways, homogeneous alternative semantics and homogeneous dynamic semantics, with interestingly different consequences. (shrink)

A dynamic semantics for iffy oughts offers an attractive alternative to the folklore that Chisholm's paradox enforces an unhappy choice between the intuitive inference rules of factual and deontic detachment. The first part of the story told here shows how a dynamic theory about ifs and oughts gives rise to a nonmonotonic perspective on deontic discourse and reasoning that elegantly removes the air of paradox from Chisholm's puzzle without sacrificing any of the two detachment principles. The second (...) part of the story showcases two bonus applications of the framework suggested here: it offers a response to Forrester's gentle murder paradox and avoids Kolodny and MacFarlane's miners paradox about deontic reasoning under epistemic uncertainty. A comparison between the dynamic semantic proposal made in this paper and a more conservative approach combining a static semantics with a dynamic pragmatics is provided. (shrink)