Hybrid view on “Preference” in economics

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This article will argue and defend the hybrid interpretation of preferences. To start with “what are the preferences”? As a common understanding: preferences include personal tastes and tastes (as opposed to other concerns, norms, obligations, duties, etc.) directed.

My main motive is not to reconstruct the ordinary view of preferences but to do justice to the explanatory and justifying notion of preferences as it appears in decision theory. In this context, to state and defend the hybrid point of view, we need to ask ourselves about the two main schools of how we should think about preferences as well as their vulnerabilities. The first is called choice theory or behaviorist interpretation. From this perspective, preferences are defined by the role they play in choice.

The most extreme version of this is found in revealed preference theory. In this, preferences are defined as the actual choice the agent makes or would make under certain circumstances. Here, preferences are a kind of choice and no distinction exists between the two. We know that the revelation of preference by choice has the difficulty of belief component of the choice.

As soon as there is a mistaken belief, the choice will not be revealed by the preferences themselves. In this case, the agents “don’t know what they don’t know”. So this interpretation has flaws. Additionally, there is a closely related notion that does not reduce preference as a choice. We may have a disposition to choose, but fail to choose.

This disposition to choose the view does not fully explain the justifying role of preferences in decision theory. The justifying role of preferences lies in the fact that they rationalize choice and depend on the applicability of the rationality condition.

There is nothing in the dispositional view that explains why the preference should have rationality properties. Thus, the mere fact that there is a model provision does not in itself explain why it might be rational or vice versa.

The issue of mistaken beliefs in forming choice and the inability to do justice to the role of rationality makes the theoretical view of preference choice vulnerable. The main rival from this theoretical point of view of choice is the judgment point of view. Here, preferences are dealt with on a particular type of judgment. The first version of this was the notion of utility maximization that emerged in utilitarianism which treats preferences as welfare judgments that aim at the welfare of the individual decision maker.

This conception is much too narrow for modern theory as it allows preference to be directed towards many things other than personal well-being.

So the broadening of the notion of this judgmental point of view comes from Hausman’s point of view which treats preferences as judgments driven by our concerns which are all things considered.

This includes environmental concern, morality, concern for institutions, etc. These are part of “all things considered a benchmarking”. For example: A’s preference over B is just what we get when we compare the two alternatives from the point of view of all my concerns.

Although the judgmental point of view, mainly the Hausman interpretation, attempts to do justice to the conditions of rationality, the large-scale application of rational choice theory by “all things considered” does not fully capture the notion of preference. The question here is opposed to choosing the theoretical version. It ignores the special relationship that preference has with choice.

Anything that qualifies as a benchmarking can include a lot of things. For example: comparative likelihood judgment. Is it more likely that attendance will be full tomorrow or that we will see a handful of students in class? I can achieve anything that is considered to be the evaluation of two states from the point of view of probability.

Now, there is nothing in Hausman’s account that indicates that this judgment is not a preference as that is all things considered; all the evidence has been taken into account, this involves comparison and evaluation.

So the difference between my judgment that it’s more likely to have full attendance versus a low of my preference which is more likely to have full attendance is that the former is directly related to my choice, but more late indirectly. So the two main views on preferences are not philosophically robust and this is the biggest defense in favor of a hybrid view through which we can tackle their vulnerabilities and come up with a solid alternative.

It states: The preference of A over B in all things considered as a comparative judgment that A is better than B which is instantiated in the willingness to choose first over last when both are available ”.

This hybrid view which is closer to the judgmental view accommodates detailed aspects such as: the rationalization condition which operates in the rationalization of our choice, fully captures the notion of preference (including the angles of comparison, disposition and rationality) and explains why rationality gets a buy when choices are made.

In my opinion, rationality must impose “transitivity as an obligatory condition and completeness as a necessary but not obligatory condition on the preferences thus conceived. In terms of exhaustiveness, apart from the explanatory vision of the real valued representation based on utility functions, the role of the hybrid approach should not be to give preference to agents by making forced choices. as in revealed preferences.

Thus, in the case of the hybrid view, we should not think of completeness as a condition of autonomous and powerful rationality, but focus on the condition of coherent extensibility (which requires studying the whole set).

The agent must be able to arrive at a complete set of preferences without inconsistency, even if there is no complete set. It’s great to have the notion of completeness in the hybrid view which is more pragmatic in meaning and purpose than in outcome, but preference completeness is not required.

So, this is not always observable in case of hybrid view. In addition, I think that transitivity is a real condition of rationality necessary in the case of hybrid vision. In defense of transitivity in a hybrid view, we can say that intransitive and cyclical choice makes an individual pragmatically vulnerable (non-irrational).

In the market age, the incentive for preference, exploitation and the profit mindset have become a pervasive phenomenon. Agents can earn money if they make cyclical preferences.

Transitivity is a heuristically convincing and observable argument even in the case of a hybrid view, and a rational agent must try to avoid intransitive preferences.

But the problem is without completeness that the transitivity is a little strong. So, without completeness as a mandatory rational condition in the background, it doesn’t make much sense. It’s best if the two go hand in hand. Therefore, the hybrid view is the way forward on how we should think about preferences.

The writer is a candidate in the Philosophy Department of the London School of Economics and Political Science.

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