Justifiable choice

Abstract In many situations a decision maker has incomplete psychological preferences, and the weak axiom of revealed preference (WARP) is often violated. In this paper we relax WARP, and replace it with another axiom, the convex axiom of revealed non-inferiority (CARNI). An alternative x is revealed inferior to y if x is never chosen when y is in the convex hull of the choice set. CARNI requires that an alternative is chosen if it is not inferior to all other alternatives in the convex hull of the choice set. We apply CARNI in two models and axiomatize non-binary choice correspondences. In the first model we impose the standard axioms of expected utility model, except that WARP is replaced by CARNI. We prove that this axiomatization has a multiple-utility representation: There is a unique convex set of vN-M utilities, such that an alternative is chosen if and only if it is best with respect to one of the utilities in this set. In the second model we impose the axioms of subjective expected utility, relax WARP in a similar way, and obtain multiple-prior representation: There is a unique convex set of priors over the states of nature, such that an alternative is chosen if and only if it is best with respect to one of these priors. Both representations are closely-related to psychological insights of justifiable choices: The decision maker has several ways to evaluate acts, each with a different justification. Observable payoff-irrelevant information during the choice process triggers her to use a specific “anchoring” justification for the evaluation of the alternatives

Justifiable choice

In many situations a decision maker has incomplete psychological preferences, and the weak axiom of revealed preference (WARP) is often violated. In this paper we relax WARP, and replace it with convex axiom of revealed non-inferiority (CARNI). An alternative x is revealed inferior to y if x is never chosen when y is in the convex hull of the choice set. CARNI requires that an alternative is chosen if it is not inferior to all other alternatives in the convex hull of the choice set. We apply CARNI in two models and axiomatize non-binary choice correspondences. In the first model we impose the standard axioms of expected utility model, except that WARP is replaced by CARNI. We prove that it has a multiple-utility representation: There is a unique convex set of vN-M utilities, such that an alternative is chosen if and only if it is best with respect to one of the utilities in this set. In the second model we impose the axioms of the subjective expected utility, relax WARP in a similar way, and get multiple-prior representation: There is a unique convex set of priors over the state of nature, such that an alternative is chosen if and only if it is best with respect to one of these priors. Both representations are closely-related to psychological insights of justifiable choice: The decision maker has several ways to evaluate acts, each with a different justification. Observable payoff-irrelevant information during the choice triggers her to use a specific “anchoring” justification for the evaluation of the alternatives

Justifiable choice

In many situations a decision maker has incomplete psychological preferences, and the weak axiom of revealed preference (WARP) is often violated. In this paper we relax WARP, and replace it with convex axiom of revealed non-inferiority (CARNI). An alternative x is revealed inferior to y if x is never chosen when y is in the convex hull of the choice set. CARNI requires that an alternative is chosen if it is not inferior to all other alternatives in the convex hull of the choice set. We apply CARNI in two models and axiomatize non-binary choice correspondences. In the first model we impose the standard axioms of expected utility model, except that WARP is replaced by CARNI. We prove that it has a multiple-utility representation: There is a unique convex set of vN-M utilities, such that an alternative is chosen if and only if it is best with respect to one of the utilities in this set. In the second model we impose the axioms of the subjective expected utility, relax WARP in a similar way, and get multiple-prior representation: There is a unique convex set of priors over the state of nature, such that an alternative is chosen if and only if it is best with respect to one of these priors. Both representations are closely-related to psychological insights of justifiable choice: The decision maker has several ways to evaluate acts, each with a different justification. Observable payoff-irrelevant information during the choice triggers her to use a specific “anchoring” justification for the evaluation of the alternatives

Justification Norms Under Uncertainty: A Preliminary Inquiry

People making decisions under uncertainty may need to justify those decisions to their reputational community. This Essay considers when and how the potential need to justify might lead a decision-maker to employ a methodology better suited to yielding a justifiable choice that may not be the best choice. When a decision involves uncertainty, the possible outcomes and probabilities are not known. A broad consensus about a methodology that produces a good decision often may not exist. But norms will often arise as to acceptable methodologies - that is, methodologies that will be accepted as justifiable if justification is needed. The norms instantiate considerable stickiness - after all, the best way to demonstrate that something is (typically) “done” is to show that relevant others “do it.” This Essay identifies a particular pathology associated with the practice of favoring a justifiable decision over a “good” one, and argues that this pathology can have significant negative consequences. The main example discussed is the volume of subprime securities purchased. Other examples include the process by which CEOs are selected, and decisions regarding contract terms in complex business contracts. justification, norms, herding, uncertainty, ris

Justification Norms Under Uncertainty: A Preliminary Inquiry

People making decisions under uncertainty may need to justify those decisions to their reputational community. This Essay considers when and how the potential need to justify might lead a decision-maker to employ a methodology better suited to yielding a justifiable choice that may not be the best choice. When a decision involves uncertainty, the possible outcomes and probabilities are not known. A broad consensus about a methodology that produces a good decision often may not exist. But norms will often arise as to acceptable methodologies - that is, methodologies that will be accepted as justifiable if justification is needed. The norms instantiate considerable stickiness - after all, the best way to demonstrate that something is (typically) “done” is to show that relevant others “do it.” This Essay identifies a particular pathology associated with the practice of favoring a justifiable decision over a “good” one, and argues that this pathology can have significant negative consequences. The main example discussed is the volume of subprime securities purchased. Other examples include the process by which CEOs are selected, and decisions regarding contract terms in complex business contracts. justification, norms, herding, uncertainty, ris

Change Your Look, Change Your Luck: Religious Self-Transformation and Brute Luck Egalitarianism

My intention in this paper is to reframe the practice of veiling as an embodied practice of self-development and self- transformation. I argue that practices like these cannot be handled by the choice/chance distinction relied on by those who would restrict religious minority accommodations. Embodied self- transformation necessarily means a change in personal identity and this means the religious believer cannot know if they will need religious accommodation when they begin their journey of piety. Even some luck egalitarians would find leaning exclusively on preference and choice to find who should be burdened with paying the full costs of certain choices in one’s life too morally harsh to be justifiable. I end by briefly illustrating an alternative way to think about religious accommodation that does not rely on the choice/chance distinction