Essays on the Interpretation of Decision Theory

Abstract

Decision theory aims at explaining and predicting rational choice behavior. But ample empirical evidence suggests that descriptively, people’s actual choices do not conform to its predictions in various ways. Some of the counter-evidence, such as anomaly cases proposed by Amartya Sen, challenges even the normative adequacy of decision theory. My dissertation defends it as a normative theory while also offering a novel explanation of why it fails descriptively. Contrary to the Sen-style critique, I argue that decision theory is unimpeachable as a norm or logic of choice. Human decisions do not range over the kinds of objects that philosophers and economists normally assume that they range over. Instead, they range over much finer grained outcomes, what I call “holistic outcomes.” A holistic outcome reflects everything that affects a decision, including the full range of one’s values and the particularities of a choice context. Appreciating that decisions are made over holistic possibilities has important consequences for how we understand decision theory both as a normative and descriptive theory. My dissertation aims at establishing that objects of preference are fine-grained and that human decisions range over holistic outcomes, and then tracing out the consequences of this insight.