Abstract
This article concerns the prescriptive function of decision analysis. Consider an agent whomust choose an action yieldingwelfare that varies with an unknown state of nature. It is often asserted that such an agent should adhere to consistency axioms which imply that behavior can be represented as maximization of expected utility. However, our agent is not concerned the consistency of his behavior across hypothetical choice sets. He only wants to make a reasonable choice from the choice set that he actually faces. Hence, I reason that prescriptions for decision making should respect actuality. That is, they should promote welfare maximization in the choice problem the agent actually faces. Any choice respecting weak and stochastic dominance is rational from the actualist perspective.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 195-210 |
| Number of pages | 16 |
| Journal | Theory and Decision |
| Volume | 71 |
| Issue number | 2 |
| DOIs | |
| State | Published - Aug 2011 |
Keywords
- Consequentialism
- Decisions with partial knowledge
- Prescriptive decision analysis
- Respect for dominance
ASJC Scopus subject areas
- Decision Sciences(all)
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Applied Psychology
- Social Sciences(all)
- Economics, Econometrics and Finance(all)
- Computer Science Applications