Decision theory for agents with incomplete preferences

Adam Bales, Daniel Cohen and Toby Handfield

MPRA Paper from University Library of Munich, Germany

Abstract: Orthodox decision theory gives no advice to agents who hold two goods to be incommensurate in value because such agents will have incomplete preferences. According to standard treatments, rationality requires complete preferences, so such agents are irrational. Experience shows, however, that incomplete preferences are ubiquitous in ordinary life. In this paper, we aim to do two things: (1) show that there is a good case for revising decision theory so as to allow it to apply non-vacuously to agents with incomplete preferences, and (2) to identify one substantive criterion that any such non-standard decision theory must obey. Our criterion, Competitiveness, is a weaker version of a dominance principle. Despite its modesty, Competitiveness is incompatible with prospectism, a recently developed decision theory for agents with incomplete preferences. We spend the final part of the paper showing why Competitiveness should be retained, and prospectism rejected.

Keywords: Decision theory; incommensurate value; practical reason; incomplete preferences; dominance (search for similar items in EconPapers)
JEL-codes: D01 D03 D81 D89 (search for similar items in EconPapers)
Date: 2013-09-09
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:49954

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