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Utility is not only unhelpful but wrong in that it presumes that all preferences (what you call "different kinds of psychological goods") are comparable or reducible to a single scale, that individual preferences are consistent and that collective preferences are comparable, reducible to a single scale, and consistent.

There is no escaping the fact that decision problems are multidimensional.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Migeru (migeru at eurotrib dot com) on Sun Oct 22nd, 2006 at 05:38:05 AM EST
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Although utility fails as a description of human behavior, it does come closer to being a norm for human behavior (e.g., one can argue that individual preferences should be consistent). Of course it then collapses as a model if one attempts to build from there to collective preferences. Further, the collective-preference problems cast further doubt on the applicability of utility to "in-dividuals", since we seem more divisible when examined in psychological/neurological depth. And this, perhaps, undermines whatever claim it may have to defining a norm.

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Sun Oct 22nd, 2006 at 02:10:20 PM EST
[ Parent ]
It has been suggested that just as in social choice theory it is hard to turn indivudual preferences into a single collective preference, it might be equally hard to turn an individual's multiple wnats and needs into a single individual preference ranking. In other words, if I am hungry, thirsty, cold, bored and tired to various degrees, does it follow that my preferences regarding what to do next, assuming each of my options addresses some nontrivial combination of my wants and needs, have to be consistent?

Sometimes the utility and rational choice model is taken as an action, as in implied preferences, where people decide it is pointless to ask people what they prefer and try to see if their behaviour matches their preferences, and instead postulate that preferences are as they need to be to be consistent with behaviour.

Rational choice theory may be an interesting branch of mathematics, but I think to make it the axiomatic foundation of economics is a bit of a stretch.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Migeru (migeru at eurotrib dot com) on Sun Oct 22nd, 2006 at 02:19:33 PM EST
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