Ambiguity and rationality

Recently, several theories of decision making and probability judgment have been proposed that take into account ambiguity (Einhorn and Hogarth, 1985; Gardenfors and Sahlin, 1982). However, none of these theories explains exactly what the psychological causes of ambiguity are or addresses the issue of whether ambiguity effects are rational. In this paper, we define ambiguity as the subjective experience of missing information relevant to a prediction. We show how this definition can explain why ambiguity affects decisions in the ways it does. We argue that there are a variety of rational reasons ambiguity affects probability judgments and choices in the ways it does. However, we argue that the ambiguity effect does not cast doubt on the claim that utility theory is a standard of rational choice. Rather, we suggest that the effect of ambiguity on decisions highlights the fact that utility theory, like any normative model of decision making only prescribes the optimal decision, given what one knows.     

数字效应对消费者行为的影响及其心理机制

经济学理性人假说判定, 个体对同一个事物的认知和需求不会随事物表征方式以及个体信息处理方式的改变而改变。同时, 消费者旨在运用最低成本获得最大收益, 实现经济效用最大化。然而消费者行为领域的学者对此提出了相反的主张。他们指出, 当个体解读刺激物数量化属性时, 不仅会对用不同数字和单位表征的同一数量判断出现偏差, 还会受到数字启动的影响, 对用不同数字表示的同一商品产生不同的需求, 甚至做出违反经济效用最大化的决策, 产生了数字效应。不同的心理机制对数字效应如何导致消费者非理性行为进行了解释。在此基础上, 对数字效应在消费者行为领域的未来研究方向进行了展望。     

The use of multiple reference points in risky decision making

Among psychologists and economists, prospect theory continues to be one of the most popular models of decision making. The theory's key property is reference dependence; specifically, how an individual's perception of loss or gain is dependent upon their starting point (i.e., the status quo). Although prospect theory is widely accepted, other authors have sought the inclusion of reference points besides the status quo. Initially these extensions focused on the importance of single reference points such as goals. More recently, authors have explained choice data by including multiple reference points within the value function. Multiple‐reference‐point theories generally assume that many choice situations possess an implicit or explicit goal, or point an individual will strive to obtain, and/or a minimum requirement (i.e., a “lower bound”) above which an individual will strive to stay. In two experiments, we present evidence that individuals can utilize the minimum requirement, status quo, and goal within a single risky decision task. Participants most often chose to maximize their chance of reaching reference points even when that decision was riskier, resulted in lower expected value, resulted in lower expected utility, or ran contrary to the predictions of prospect theory. Furthermore, salience and uncertainty moderated the use of goals and minimum requirements as reference points. Copyright © 2010 John Wiley & Sons, Ltd.     

Crossing No Man's Land: Cooperation From the Trenches

This paper represents an attempt to bridge the gap between rational and psychological models of choice, as represented by expected utility theory and prospect theory, and to show how researchers from different traditions can start to work together on problems of interest to both. A central issue for both models concerns the origin of preferences and how they might be predicted. Two questions of interest to all social scientists are related to the formation of preferences: What determines what people want, and what determines what people do once they know what they want? The incorporation of emotion into models of decision‐making may help users of divergent models find common ground for exploration and investigation.     

Rational Choice, Deterrence, and Theoretical Integration

The old version of rational choice theory is that people engage in conscious and deliberate cost–benefit analysis such that they maximize the values and minimize the costs of their actions. The new version of rational choice theory is that people intuit the values and costs of an action; but because they are imperfect processors of information, they pursue what they perceive as most satisfying. The possibility that legal punishments deter is consistent with the new version of rational choice theory, which can be used to integrate deterrence with other criminological theories, such as strain and social learning. An integrated theory of deterrence is presented and tested with experimental data.     

Rational endorsement

It is valuable for inquiry to have researchers who are committed advocates of their own theories. However, in light of pervasive disagreement (and other concerns), such a commitment is not well explained by the idea that researchers believe their theories. Instead, this commitment, the rational attitude to take toward one’s favored theory during the course of inquiry, is what I call endorsement. Endorsement is a doxastic attitude, but one which is governed by a different type of epistemic rationality. This inclusive epistemic rationality is sensitive to reasons beyond those to think the particular proposition in question is true. Instead, it includes extrinsic epistemic reasons, which concern the health of inquiry more generally. Such extrinsic reasons include the distribution of cognitive labor that a researcher will contribute to by endorsing a particular theory. Recognizing endorsement and inclusive epistemic rationality thus allows us to smooth a tension between individual rationality and collective rationality. It does so by showing how it can be epistemically rational to endorse a theory on the basis of the way this endorsement will benefit collective inquiry. I provide a decision theoretic treatment for inclusive epistemic rationality and endorsement which illustrates how this can be accomplished.     

A Note in Defence of Ratificationism

Andy Egan argues that neither evidential nor causal decision theory gives the intuitively right recommendation in the cases The Smoking Lesion, The Psychopath Button, and The Three-Option Smoking Lesion. Furthermore, Egan argues that we cannot avoid these problems by any kind of ratificationism. This paper develops a new version of ratificationism that gives the right recommendations. Thus, the new proposal has an advantage over evidential and casual decision theory and standard ratificationist evidential decision theory.     

Four teleological theories of addiction

Four theories are presented to account for addiction, defined as a high rate of consumption of a substance that is ultimately harmful to the organism. The theories are teleological and behavioral in the sense that the ultimate motivational forces they posit lie in the environmental context of behavior—in an economic utility function or a process of behavioral adjustment—rather than in an internal physiological or cognitive mechanism. A theory by the psychologists Richard Herrnstein and Drazen Prelec is discussed that shows how melioration (maximization of local, as opposed to overall, or global, utility) may lead down a “primrose path” to addiction. A theory by the economists Gary Becker and Kevin Murphy shows how a primrose path may exist even when overall utility is maximized—provided that utility of temporally distant events is discounted. Two other theories, one by George Stigler and Gary Becker and one introduced here, an elaboration of the Stigler-Becker theory called “relative addiction,” specify economic properties of addictive substances that would create the primrose path.     

A Reason‐Based Theory of Rational Choice *

There is a surprising disconnect between formal rational choice theory and philosophical work on reasons. The one is silent on the role of reasons in rational choices, the other rarely engages with the formal models of decision problems used by social scientists. To bridge this gap, we propose a new, reason‐based theory of rational choice. At its core is an account of preference formation, according to which an agent’s preferences are determined by his or her motivating reasons, together with a ‘weighing relation’ between different combinations of reasons. By explaining how someone’s preferences may vary with changes in his or her motivating reasons, our theory illuminates the relationship between deliberation about reasons and rational choices. Although primarily positive, the theory can also help us think about how those preferences and choices ought to respond to normative reasons.     

Theories of mind in infancy

This paper reviews and evaluates various theories of the origins of theory of mind in infancy. In what a theory of mind consists is first considered. It is argued that any theory of mind has two important features. Firstly, a theory of mind recognizes, at least, the existence of psychological relations between agents and objects, including some relations which involve “action at a distance”. Secondly, in a theory of mind, self and other are equivalent in that both can act equally as agents of psychological relations. Any theory of the development of theory of mind must explicate how it is possible to acquire an understanding of these two features. With this requirement in mind, four main types of recent theories are considered — modularity theories, Piagetian theories, matching theories, and intersubjectivity theories. While no decision is made amongst these theories, suggestions for further improvement in theorizing on this topic are presented.     

Regret and instability in causal decision theory

Andy Egan has recently produced a set of alleged counterexamples to causal decision theory (CDT) in which agents are forced to decide among causally unratifiable options, thereby making choices they know they will regret. I show that, far from being counterexamples, CDT gets Egan??s cases exactly right. Egan thinks otherwise because he has misapplied CDT by requiring agents to make binding choices before they have processed all available information about the causal consequences of their acts. I elucidate CDT in a way that makes it clear where Egan goes wrong, and which explains why his examples pose no threat to the theory. My approach has similarities to a modification of CDT proposed by Frank Arntzenius, but it differs in the significance that it assigns to potential regrets. I maintain, contrary to Arntzenius, that an agent facing Egan??s decisions can rationally choose actions that she knows she will later regret. All rationality demands of agents it that they maximize unconditional causal expected utility from an epistemic perspective that accurately reflects all the available evidence about what their acts are likely to cause. This yields correct answers even in outlandish cases in which one is sure to regret whatever one does.     

Prospect relativity: how choice options influence decision under risk

In many theories of decision under risk (e.g., expected utility theory, rank-dependent utility theory, and prospect theory), the utility of a prospect is independent of other options in the choice set. The experiments presented here show a large effect of the available options, suggesting instead that prospects are valued relative to one another. The judged certainty equivalent for a prospect is strongly influenced by the options available. Similarly, the selection of a preferred prospect is strongly influenced by the prospects available. Alternative theories of decision under risk (e.g., the stochastic difference model, multialternative decision field theory, and range frequency theory), where prospects are valued relative to one another, can provide an account of these context effects.     

A plea for virtue in ethics

Comments on the original article, "Nonrational processes in ethical decision making" by M. D. Rogerson et al (see record 2011-19198-001). The current authors suggest that Rogerson, Gottlieb, Handelsman, Knapp, and Younggren (October 2011) presumed that the only ethical theories available for grounding decision-making models are of the rational, neoliberal variety. Rogerson et al stated, "Contextual, interpersonal, and intuitive factors are inextricably linked and inexorably influential in the process of ethical decision making. Ethical theory would benefit from encompassing these subtle yet powerful forces" (Rogerson et al., 2011, p. 616). They sought to augment these models with a cluster of contextual considerations, appending to them accounts of emotion, context, and intuition. First, notwithstanding the theories attributed to (the caricature of) Kant and his ilk, there are several ethical theories that include an account of what Rogerson et al. (2011) consider to be "nonrational" processes. From feminist theories to narrative ethics, sophisticated contextual theories have been developed and are readily available. Second, we question whether thick contextual considerations can simply be tacked on to extant models of decision making originally built upon a philosophical foundation that assumes a rational, autonomous agent who deliberates independently and logically.     

Computational Goals,Values and Decision-Making

Science and Engineering Ethics - Considering the popular framing of an artificial intelligence as a rational agent that always seeks to maximise its expected utility, referred to as its goal, one...     

Gandalf’s solution to the Newcomb problem

This article proposes a new theory of rational decision, distinct from both causal decision theory (CDT) and evidential decision theory (EDT). First, some intuitive counterexamples to CDT and EDT are presented. Then the motivation for the new theory is given: the correct theory of rational decision will resemble CDT in that it will not be sensitive to any comparisons of absolute levels of value across different states of nature, but only to comparisons of the differences in value between the available options within states of nature; however, the correct theory will also resemble EDT in that it will rely on conditional probabilities (not unconditional probabilities). The new theory gives a prominent role to the notion of a “benchmark” for each state of nature, by comparison with which the value of the available options in that state of nature are measured, and so it has been called the Benchmark Theory (BT). It is argued that BT gives the right verdict on the cases that seem to be counterexamples to CDT and EDT. Finally, some objections to BT are considered and answered.     

Journal received

David Lewis [1988; 1996] canvases an anti-Humean thesis about mental states: that the rational agent desires something to the extent that he or she believes it to be good. Lewis offers and refutes a decision-theoretic formulation of it, the 'Desire-as-Belief Thesis'. Other authors have since added further negative results in the spirit of Lewis's. We explore ways of being anti-Humean that evade all these negative results. We begin by providing background on evidential decision theory and on Lewis's negative results. We then introduce what we call the indexicality loophole: if the goodness of a proposition is indexical, partly a function of an agent's mental state, then the negative results have no purchase. Thus we propose a variant of Desire-as-Belief that exploits this loophole. We argue that a number of meta-ethical positions are committed to just such indexicality. Indeed, we show that with one central sort of evaluative belief--the belief that an option is right--the indexicality loophole can be exploited in various interesting ways. Moreover, on some accounts, 'good' is indexical in the same way. Thus, it seems that the anti-Humean can dodge the negative results.     

Utility and framing

Standard principles of rational decision assume that an option’s utility is both comprehensive and accessible. These features constrain interpretations of an option’s utility. This essay presents a way of understanding utility and laws of utility. It explains the relation between an option’s utility and its outcome’s utility and argues that an option’s utility is relative to a specification of the option. Utility’s relativity explains how a decision problem’s framing affects an option’s utility and its rationality even for an agent who is cognitively perfect and lacks only empirical information. The essay rewrites standard laws of utility to accommodate relativization to propositions’ specifications. The new laws are generalizations of the standard laws and yield them as special cases.     

Multiattribute Decision Making in Context: A Dynamic Neural Network Methodology

A theoretical structure for multiattribute decision making is presented, based on a dynamical system for interactions in a neural network incorporating affective and rational variables. This enables modeling of problems that elude two prevailing economic decision theories: subjective expected utility theory and prospect theory. The network is unlike some that fit economic data by choosing optimal weights or coefficients within a predetermined mathematical framework. Rather, the framework itself is based on principles used elsewhere to model many other cognitive and behavioral data, in a manner approximating how humans perform behavioral functions. Different, interconnected modules within the network encode (a) attributes of objects among which choices are made, (b) object categories, (c) and goals of the decision maker. An example is utilized to simulate the actual consumer choice between old and new versions of Coca-Cola. Potential applications are also discussed to market decisions involving negotiations between participants, such as international petroleum traders.