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Consequentialism and Preference Formation in Economics and Game Theory

Published online by Cambridge University Press:  31 July 2006

Daniel Hausman
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Extract

When students first study expected utility, they are inclined to interpret it as a theory that explains preferences for lotteries in terms of preferences for outcomes. Knowing U($100) and U($0), the agent can calculate that the utility of a gamble of $100 on a fair coin coming up heads is U($100)/2 + U($0)/2. Utilities are indices representing preferences, so in calculating the utility of the gamble, one is apparently giving a causal explanation for the agent’s preference for the gamble.

Type
Research Article
Information
Royal Institute of Philosophy Supplements , Volume 59: Preferences and Well-Being , December 2006 , pp. 111 - 130
Copyright
Copyright © The Royal Institute of Philosophy and the contributors 2006

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