Rational choice theory Definition, Examples, & Facts

A 2002 study examined how the order of delivering information regarding risks and benefits can influence decisions. Participants hearing the risks after the benefits were twice as likely to refuse consent as compared with those who heard the benefits after the risks 72. An adolescent’s decision may actually be a reflection of what the parent understands. Adolescents’ decisions tend to reflect the values and morals of their parents and the healthcare system in which they are receiving care 73. Thus, with regard to FP, if issues of infertility and cancer treatment have not been previously discussed, the teenager may have little context to base a decision, or may understand their options as their parent understands them. For example, Coventry et al. (2014) investigated the impact of motivation, responsibility, and capacity in relation to engagement in self-management.

3 Inferring preference from choice

Dietrich and List (2013 & 2015) have proposed aneven more general framework for representing the reasons underlyingpreferences. In their framework, preferences satisfying some minimalconstraints are representable as dependent on the bundle of propertiesin terms of which each option is perceived by the agent in a givencontext. Properties can, in turn, be categorised as either optionproperties (which are intrinsic to the outcome), relationalproperties (which concern the outcome in a particular context),or context properties (which concern the context of choiceitself). Such a representation permits more detailed analysis of thereasons for an agent’s preferences and captures different kindsof context-dependence in an agent’s choices. Furthermore, itpermits explicit restrictions on what counts as a legitimate reasonfor preference, or in other words, what properties legitimatelyfeature in an outcome description; such restrictions may help toclarify the normative commitments of EU theory. An alternative possibility is that preferences are adjusted much earlier, that is, while a hard decision is being made, when the value differential of the options is not sufficient to choose among them.

1. The filtering (“laundering”) of preferences can bejustified by the everyday experience that some preferences are muchmore important for a person’s well-being than others.
2. But it is not directly inconsistent withAllais’ preferences, and its plausibility does not depend on thetype of probabilistic independence that the STP implies.
3. For instance, there may be a thirdbrand \(B\) that was previously placed between \(A\) and \(C\) in thepreference ordering.
4. In the second choicesituation, however, the minimum one stands to gain is $0 no matterwhich choice one makes.
5. The static model has familiar tabular or normalform, with each row representing an available act/option, and columnsrepresenting the different possible states of the world that yield agiven outcome for each act.

The agent is not required to havepreferences over artificially constructed acts or propositions thatturn out to be nonsensical, given the interpretation of particularstates and outcomes. In fact, only those propositions the agentconsiders to be possible (in the sense that she assigns them aprobability greater than zero) are, according to Jeffrey’stheory, included in her preference ordering. In most ordinary choice situations, the objects of choice, overwhich we must have or form preferences, are not like this. Rather,decision-makers must consult their own beliefs about theprobability that one outcome or another will result from a specifiedoption. Decisions in such circumstances are often described as“choices under uncertainty” (Knight 1921).

There are, moreover,further questions of meta-ethical relevance that one might investigateregarding the role and structure of desire in EU theory. For instance,Jeffrey (1974) and Sen (1977) offer some preliminary investigations asto whether the theory can accommodate higher-orderdesires/preferences, and if so, how these relate to first-orderdesires. This brings us to the Transitivity axiom,which says that if an option \(B\) isat least as preferable as \(A\),and \(C\) is at least as preferableas \(B\), then \(A\) cannot be strictly preferred to \(C\). A recent challenge to Transitivity turns onheterogeneous sets of options, as per the discussion of Completenessabove.

3 Doxastic preference change

First,incompleteness may be uniquely resolvable, i.e. resolvable inexactly one way. The most natural reason for this type ofincompleteness is lack of knowledge or reflection. Behind what weperceive as an incomplete preference relation there may be a completepreference relation that we can arrive at through observation,introspection, logical inference, or some other means ofdiscovery.

5 Combinative preferences

It says thatif X is chosen when Y is available, then there canbe no budget set containing both alternatives for which Y ischosen and X is not (see section 3.1). ≻Sdoes not necessarily satisfy transitivity of strict preference,transitivity of indifference, IP- or PI-transitivity. Two alternatives are called “incomparable” whenever thepreference relation is incomplete with respect to them. They arecalled “incommensurable” whenever it is impossible tomeasure them with the same unit of measurement. In moralphilosophy, irresolvable incompleteness is usually discussed in termsof the related notion of a moral dilemma.

2 Total and partial preferences

Whether or not it is true by definition, i.e., whether real agentscan fail to satisfy its demands, the accounting software xero: set up payroll EU characterisation ofrationality serves to structure and thus identify an agent’spreference attitudes. The substantial nature of these preferenceattitudes—the agent’s beliefs and desires—can thenbe examined, perhaps with an eye to transformation or reform. Theorem 4 (Bolker)Let \(\Omega\) be a complete and atomless Boolean algebra ofpropositions, and \(\preceq\) a continuous, transitive and completerelation on \(\Omega \setminus \bot \), that satisfies Averaging andImpartiality. Then there is a desirability measure on \(\Omega\setminus \bot \) and a probability measure on \(\Omega\) relative towhich \(\preceq\) can be represented as maximisingdesirability. In the second choicesituation, however, the minimum one stands to gain is $0 no matterwhich choice one makes.

The new ordering may bookkeeping eugene for instance beeither \(C\succ A\succ B\) or \(C\succ B\succ A\). One way to dealwith this is to include additional information in the input, forinstance specifying which element(s) of the alternative set should bemoved while the others keep their previous positions. In our example,if only \(C\) is going to be moved, then the outcome should satisfy\(C\succ A\succ B\).