Choice under description: The motivational nexus

Abstract

In order to solve the problem of seemingly reasonable violations of expected utility theory (EUT), many have suggested we should re-describe choice alternatives. But this strategy suffers from the problem of determining the relevant description among multiple possible ones. I argue that the relevant description is given by the theory of motivation that underlies rational choice theory (RCT); more specifically, by the desires people try to satisfy. The descriptions that followed from the traditional assumption that people desire wealth had some peculiar features that suited EUT well. But not all desires generate descriptions with these features. In particular, a desire for fairness will sometimes require people to violate menu independence and thus EUT, and will further often require that people are sensitive to the framing of choices. This suggests that EUT is a good normative theory for choices driven by some desires but not for others. Show more