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Show Chapter III. The Utility-Maximizing Model of Rationality: Informal Interpretations 98 implication holds for single ends considered independently; and in Section 3 that it holds equally for the coherence set comprising all of one's ends. In Section 4 I show that this argument holds whether the concept of utility is interpreted phenomenologically, psychoanalytically, or behaviorally. The following chapter then extends these conclusions to more technical formulations of (U). 1. Formulating the Principle My target is one particular formulation of the basic principle of utility theory, namely (U) If a rational agent acts, she maximizes utility. This minimalist formulation of (U) superficially resembles what Maurice Allais calls the Axiom of Absolute Preference, i.e. that given two alternatives, 2 a rational agent prefers that one that consistently yields the greater gain. However, Allais claims that this axiom is merely a consequence of a much weaker definition of rational choice as consistency. But the three criteria that constitute his definition always include the axiom of absolute preference 3 among them. Without it, there would be no ordering relation specified for the ordered set of gambles among which, on his definition, a rational agent chooses. I criticize his conception of consistency directly below. Moreover, Allais' Axiom of Absolute Preference is not, according to his account of it, implied by the assumptions grounding the von Neumann-Morgenstern cardinal utility function (discussed in below in Chapter IV, Sections 1.2-3). By contrast, (U) is presupposed by it, in the concept of a highest-ranked member of an ordered set of preference alternatives, regardless of whether these alternatives are objects, events, conditions, states, or gambles. (U) is similar to Allais' Axiom of Absolute Preference, however, in its atomistic ascription of utility-maximization to the smallest behavioral unit in which preference is revealed. It is also similar in assuming satisfaction of the 2 See his "Fondements d'une Théorie Positive des Choix Comportant un Risque et Critique des Postulats et Axiomes de L'Ecole Americaine,"Memoir III of Econometrie XL (1953), 257-332 (Colloques Internationaux du Centre National de la Recherche Scientifique, Paris), translated as "Foundations of a Positive Theory of Choice Involving Risk and a Criticism of the Postulates and Axioms of the American School," in Maurice Allais and Ole Hagen, Eds. Expected Utility and the Allais Paradox (Dordrecht, Holland: D. Reidel, 1979), 27-146. See esp. 39-41. This formulation of (U) also encapsulates Ward Edwards' treatment in his comprehensive survey paper, "The Theory of Decision-Making," Psychological Bulletin 51, 4 (1954), esp. 381-3. 3 Allais, ibid. See particularly 34, 69, 78-79, 82, and footnote 78'. © Adrian Piper Research Archive Foundation Berlin |
