What Are Preferences?
An informal presentation of Jeffrey (1983, p. chapter 3)
on how decision theory enables us
to think of subjective probabilities and preferences as
simultaneously derivable from patterns of action.
Notes
We have relied on notions of belief and desire in considering
both philosophical (in Philosophical Theories of Action)
and psychological theories (in Instrumental Actions: Goal-Directed and Habitual)
of instrumental action and joint action.
But what anchors our understanding, as researchers, of these notions?
While some of us might use these words in everyday life,
there is probably enough diversity between individuals with
different cognitive styles (e.g. Perner & Leekam, 2008),
different upbringings (e.g. (Morgan et al., 2014))
or different cultural backgrounds (e.g. (Dixit, Skeath, & Reiley, 2014))
that whatever understandings you and I have in everyday life may not
entirely overlap.
And invoking a philosophical theory does not seem likely to help given
the level of agreement that has been reached in this regard over
the last 2000 or so years.
An attractive alternative is suggested by Jeffrey:
This book has ‘a philosophical end: elucidation of the notions of
subjective probability and subjective desirability or utility.’
(Jeffrey, 1983, p. xi)
In this section we explore how, following Jeffrey, subjective probabilities
and preferences can be identified as constructs of decision theory.
Decision theory therefore promises to be an ideal anchor for a shared
understanding of these notions.
Inspired by Jeffery (and Davidson, 1990), we might therefore
attempt to substitute the informal, poorly understood notions of belief
and desire with the theoretical constructs of subjective probabilty and
preference.
Required Axioms
‘A binary relation ⪰ on a set A is _complete_ if a⪰b
or b⪰a for every a ∈ A and b ∈ A, _reflexive_ if a⪰a
for every a ∈ A, and _transitive_ if a⪰c whenever a⪰b
and b⪰c. A preference relation is a complete reflexive transitive
binary relation’ (Osborne & Rubinstein, 1994, p. 7).
A preference relation is _independent of irrelevant alternatives_
exactly if ‘no change in the set of candidates (addition to or subtraction from)
[can] change the rankings of the unaffected candidates’
(Dixit et al., 2014, p. 600).
Ask a Question
Your question will normally be answered in the question
session of the next lecture.
More information about asking questions.
Glossary
decision theory :
I use ‘decision theory’ for the theory elaborated by Jeffrey (1983). Variants are variously called ‘expected utility theory’ (Hargreaves-Heap & Varoufakis, 2004), ‘revealed preference theory’ (Sen, 1973) and ‘the theory of rational choice’ (Sugden, 1991). As the differences between variants are not important for our purposes, the term can be used for any of core formal parts of the standard approaches based on Ramsey (1931) and Savage (1972).
ethically neutral condition :
‘A condition is ethically neutral in relation to a particular agent and a particular consequence if the agent is indifferent between having that consequence when the condition holds and when it fails’ (Jeffrey, 1983, p. 46).
instrumental action :
An action is instrumental if it happens in
order to bring about an outcome,
as when you press a lever in order to obtain food. (In this case,
obtaining food is the outcome, lever pressing is the action, and the
action is instrumental because it occurs in order to bring it about
that you obtain food.)
You may variations on this definition of instrumental in the literature.
Dickinson (2016, p. 177)
characterises instrumental actions differently: in place of the teleological
‘in order to bring about an outcome’, he stipulates that an instrumental
action is one that is ‘controlled by the contingency between’ the action
and an outcome. And de Wit & Dickinson (2009, p. 464) stipulate that
‘instrumental actions are learned’.
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