Risk Aversion and the Long Run

Thoma, Johanna

doi:10.1086/699256

Cited by 26 publications

(12 citation statements)

References 19 publications

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“…23 Thoma (2019) offers a similar argument against sophisticated choice in this kind of case. 24 More generally, McClennen (1990) argues that none of the forms of dynamic choice can satisfy all of three desiderata: (1) diachronic consistency, that the agent adopts the same plan throughout, (2) normal form-extensive form convergence, that the agent would choose the same plan if all of his choices were controlled by an initial single choice, and (3) separability, that in each decision, the agent is permitted to ignore historical background.…”

Section: Long-run Preferencementioning

confidence: 95%

Ignore risk; Maximize expected moral value

Zhao

2021

Nous

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Many philosophers assume that, when making moral decisions under uncertainty, we should choose the option that has the greatest expected moral value, regardless of how risky it is. But their arguments for maximizing expected moral value do not support it over rival, risk-averse approaches. In this paper, I present a novel argument for maximizing expected value: when we think about larger series of decisions that each decision is a part of, all but the most risk-averse agents would prefer that we consistently choose the option with the highest expected value. To the extent that what we choose on a given occasion should be guided by the entire series of choices we prefer, then on each occasion, we should choose the option with the highest expected moral value. * The ideas behind this paper originated over a decade ago; I am grateful to Peter Diao for early discussion. I am also grateful to Martín Abreu Zavaleta, Zach Barnett, Harjit Bhogal, and especially an anonymous referee for insightful comments on earlier drafts of this paper.

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Section: Long-run Preferencementioning

confidence: 95%

Ignore risk; Maximize expected moral value

Zhao

2021

Nous

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“…For a criticism of orthodox expected utility theory from a normative perspective, see Hampton (1998a: 117) and Buchak (2013). For a criticism of Buchak's argument and defense of expected utility theory, see Thoma and Weisberg (2017), Thoma (2019), and Thoma and Weisberg (forthcoming). 38 See Sen (1977Sen ( , 1985Sen ( , 1997Sen ( , 2005, Loomes and Sugden (1982, 1983, McClennen (1990), and Broome (1991).…”

Section: Rational Choice Theory and Moral Philosophymentioning

confidence: 99%

Contractarianism

Moehler¹

2020

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This Element provides a systematic defense of moral contractarianism as a distinct approach to the social contract. It elucidates, in comparison to moral conventionalism and moral contractualism, the distinct features of moral contractarianism, its scope, and conceptual and practical challenges that concern the relationship between morality and self-interest, the problems of assurance and compliance, rule-following, counterfactualism, and the nexus between morals and politics. It argues that, if appropriately conceived, moral contractarianism is conceptually coherent, empirically sound, and practically relevant, and has much to offer to contemporary moral philosophy.

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“…For the above reasons, many defenders of alternatives to expected utility theorythat is, people who think that preferences that violate the axioms of the theory can nevertheless be rational-have been tempted by the view that rational people who are not expected utility maximisers are resolute choosers (see e.g. McClennen 1990;Buchak 2013;Thoma 2017Thoma , 2019. I think that is a mistake: It can never be rational, at time t, to choose against what one truly prefers, at time t; hence, a rational person will not be a resolute chooser.…”

Section: Should Sc Be Resolute?mentioning

confidence: 99%

“…That is, assuming that utilities are defined on terminal outcomes rather than changes. 2 More precisely, the attitude in question is inconsistent with a combination of Transitivity and Event-Wise Dominance(Stefánsson 2018), given the assumption mentioned in the last footnote.3 Note however thatThoma (2019) has argued that in fact, risk-weighted expected utility theory cannot account for the attitude under discussion. Since may aim in this paper is not to discuss the advantages of different decision theories I will not discuss further which theories can, and which cannot, account for the attitude in question.4 For recent discussions of the rational permissibility of the attitude under discussion, see e.g Buchak (2013),Stefánsson (2018).…”

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confidence: 99%

“…Since may aim in this paper is not to discuss the advantages of different decision theories I will not discuss further which theories can, and which cannot, account for the attitude in question.4 For recent discussions of the rational permissibility of the attitude under discussion, see e.g Buchak (2013),Stefánsson (2018). andThoma (2019).5 By a gamble with a positive objective expectation, I mean for instance a bet with a positive monetary expectation, or a public policy whose expected number of lives saved is positive, etc. Such gambles can however of course have a negative expected utility (compared to their alternatives, e.g.…”

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confidence: 99%

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The Tragedy of the Risk Averse

Stefánsson

2020

Erkenn

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Those who are risk averse with respect to money, and thus turn down some gambles with positive monetary expectations, are nevertheless often willing to accept bundles involving multiple such gambles. Therefore, it might seem that such people should become more willing to accept a risky but favourable gamble if they put it in context with the collection of gambles that they predict they will be faced with in the future. However, it turns out that when a risk averse person adopts the long-term perspective, she faces a decision-problem that can be analysed as a noncooperative game between different “time-slices” of herself, where it is in the interest of each time-slice (given its prediction about other slices) to turn down the gamble with which it is faced. Hence, even if a risk averse but rational person manages to take the long-term perspective, she will, in the absence of what Hardin called “mutual coercion”, end up in a situation analogous to the “tragedy of the commons”.

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Risk Aversion and the Long Run

Cited by 26 publications

References 19 publications

Ignore risk; Maximize expected moral value

Ignore risk; Maximize expected moral value

Contractarianism

The Tragedy of the Risk Averse

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