Abstract Good’s theorem is the apparent platitude that it is always rational to ‘look before you leap’: to gather (reliable) information before making a decision when doing so is free. We argue that Good’s theorem is not platitudinous and may be false. And we argue that the correct advice is rather to ‘make your act depend on the answer to a question’. Looking before you leap is rational when, but only when, it is a way to do this. 1 Introduction 2 Good’s Theorem 3 Inexact Observation 4 Independence 5 Conditionality 5.1 The principle 5.2 Revisiting the counterexamples 6 Conclusion 1 Introduction Good’s theorem (GT) says: look before you leap if looking is free. ‘Free’ excludes all costs: of money, of time, of opportunity. Good doesn’t say that you should observe everything before doing anything; nor that you should pay the monetary cost of checking your tax return with every accountant, the temporal cost of reading everything on a subject before writing a paper on it, or the opportunity cost of constant dithering. He only recommends not choosing until you have learnt what you can learn for free. So qualified, the theorem looks platitudinous. ‘Look before you leap’ isn’t always good advice; ‘Look for free before you leap’ surely is. But there are counterexamples to GT, described and classified here. Since Good’s proof is valid, the counterexamples show that his premises are contentious. First question: which premises and why? Second question: how close can we get to GT without them?—is any genuine platitude within the neighbourhood of ‘look before you leap’? We answer both. Section 2 presents Good’s proof. Sections 3 and 4 give two counterexamples and identify which premises cause trouble. Section 5 defends ‘Conditionality’ (Section 5.1), which is the best we can do while avoiding that trouble. Conditionality has two virtues: it follows from Good’s uncontroversial assumptions (Section 5.1), and it yields GT as a special case in certain environments (Section 5.2). 2 Good’s Theorem Informally, GT says: A rational agent will make any available, free, and relevant observation before choosing an act. Before the proof, we make one comment and stress three points. ‘Relevant’ is interpreted lightly: an observation is relevant unless the agent is certain that it has no bearing on the decision. (The proof also shows that when a free observation isn’t relevant, it is still permissible to make it.) Three further points: First (as mentioned), calling observation ‘free’ rules out anything the agent considers a cost. Second, making the observation is not supposed to affect any event on which the success of any available act depends. But third, it may affect the agent’s beliefs about these events—that’s the point. Good’s ([1967]) proof uses standard (that is, Savage’s) decision theory and standard (that is, Bayesian) formal epistemology. Specifically, Good assumes that rational agents (a) have preferences that maximize expected utility and choose in accordance with these preferences, and (b) update by conditionalization. Before stating (a) and (b), we outline their background; not because it plays a role in Good’s proof, but because we must relax it if (as we argue) there is reason to dilute GT. We have a set W of possible worlds (assumed, for simplicity, to be finite) and a set Z of possible outcomes or payoffs (identified, for simplicity, with dollar credits and debits, so that Z is a set of real numbers). The ‘act space’ A then contains all functions from W to Z, that is, A = def.ZW. An act a ∈ A specifies a ‘prize’ a(w) in each world w. An ‘event’ or ‘proposition’ is a subset of W. If h is a proposition, and a(w1) = a(w2) whenever w1, w2 ∈ h, we define a(h) as a(w) for any w ∈ h. So a gamble paying $1 if this coin lands heads (h1) and losing $1 otherwise (h2) is the act a such that a(h1) = 1 and a(h2) = −1. Classical decision theory says that for a1, a2 ∈ A, a rational agent’s preference satisfies1: EU(a)=def.Σh∈HCrhah, a1≻a2 if and only if EUa1>EUa2. ‘a1 ≻ a2’ means the agent strictly prefers a1 to a2 (so always chooses a1 when a2 is the only alternative). Similarly, ‘a1 ≽ a2’ means ∼(a2 ≻ a1): the agent ‘weakly prefers’ a1 to a2. EU(a) is the expected utility of a. It is a weighted average of the returns to a in the events h1, h2, … hn (chosen so that a(w1) = a(w2) whenever w1, w2 ∈ hi), the weight for hi being Cr(hi). Cr is the agent’s ‘credence’: a probability function mapping a proposition to the confidence the agent assigns to that proposition. It follows that given a menu M of acts (M ⊆ A), her expectation of utility when facing M with belief state Cr is: EUM, Cr=def.maxa∈MΣh∈HCrha(h). (1) Thus suppose you are choosing whether to bet $1 on Red Rum: winning makes a profit of $1. Let h1 be the proposition that (that is, the set of possible worlds at which) Red Rum wins and h2 the proposition that he doesn’t. The available acts are then as in Table 1: a1 and a2 are functions from {h1, h2} to Z = {−1, 0, 1} such that a1(h1) = 1, a1(h2) = −1, a2(h1) = a2(h2) = 0 (Table 1). Table 1. Red Rum h1: RR wins h2: RR doesn’t win a1: bet 1 −1 a2: no bet 0 0 h1: RR wins h2: RR doesn’t win a1: bet 1 −1 a2: no bet 0 0 View Large Table 1. Red Rum h1: RR wins h2: RR doesn’t win a1: bet 1 −1 a2: no bet 0 0 h1: RR wins h2: RR doesn’t win a1: bet 1 −1 a2: no bet 0 0 View Large The expected utility of a1 is Crh1-Crh2 , which is 2Crh1-1 since Crh1+Crh2=1 . The expected utility of a2 is 0. Since you pick whichever act has higher EU, the expected utility of choosing from {a1, a2} is: EU{a1,a2}, Cr=max0, 2Crh1-1. So much for the background decision theory. Call a set of propositions P = {p1, p2, … pm} a ‘partition’ if those propositions are mutually exclusive (i ≠ j ↔ pi ∩ pj = ∅) and jointly exhaustive (∪P = W). Now suppose that before choosing you have the option to learn which element of a partition P is true—that is, you can do what Good calls ‘making an observation’ that settles P. (Since P partitions W, exactly one element of P is true.) As Bayesians, we assume that upon observation you update your beliefs Cr by conditionalization: if you learn that p ∈ P is true, where Cr(p) > 0, then your credence shifts from Cr to a new probability function Crp , defined on an arbitrary proposition h as follows: Crph=Crhp=def.Cr(hp)Cr(p). (We’ll sometimes write hp for h∩p .) Crhp is the ‘conditional probability’ of h given p. So much for the background epistemology. Suppose you observe before choosing and learn p. Given your new credence function Crp, you now choose a ∈ M maximizing: EUap=Σh∈HCrhpa(h). If observing means learning which p ∈ P is true, the ex ante expected utility of observation is: Σp∈PCrpEUM, Crp=Σp∈PCr(p)maxa∈MΣh∈HCrhpa(h). (2) Given that a rational person maximizes expected utility, it follows from Equations (1) and (2) that GT holds if this inequality does: Σp∈PCrpmaxa∈MΣh∈HCrhpa(h)≥maxa∈MΣh∈HCrhah. By definition of Crhp , this is equivalent to: Σp∈Pmaxa∈MΣh∈HCrhpa(h)≥maxa∈MΣh∈HCrhah. (3) Good proves GT by proving Equation (3). To get a feeling for how, consider this analogy. The US government faces a menu M of nationwide tax regimes that each assigns a fixed rate to each economic class, where individuals occupy the same class if and only if they have the same gross income. The regimes typically have different effects on different classes. The government aims to maximize net income aggregated across all individuals. Equivalently, it aims to maximize the weighted sum of net incomes earnt by each class, where the weight of a class is the proportion of individuals within it. As well as partitioning the population into economic classes, we can partition it into states. Suppose every individual resides in exactly one state. So each tax regime has implications for the income of each state, that is, the aggregate income of its residents. We number the regimes alphabetically by state, so that a1 ∈ M is by this measure the optimal regime for Alabama, a2 for Alaska, … a50 is optimal for Wyoming. (Maybe ai = aj for some i ≠ j.) Now instead of a single tax regime applied across all states, imagine a scheme as that varies the regime across state as follows: it applies a1 in Alabama, a2 in Alaska, … a50 in Wyoming. Then Equation (3) is saying that as is at least as good, by the government’s measure, as any a ∈ M. Good’s argument for this is that as is at least as good as a in each state. as is at least as good as a in Alabama, because as implements a1 in Alabama, which is optimal in M for Alabama, and so on. Since the weighted sum of incomes in any state is at least as high under as as under any a ∈ M, and since everyone resides in exactly one state, the sum of all incomes, and hence the weighted sum of class earnings, is at least as high under as as under any a ∈ M. Citizens correspond to worlds, income classes to events h ∈ H, states to observations p ∈ P, populations—of classes and state—to credence, and the original menu of uniform tax regimes to your options. Specifically, for a class h, a state, p and a tax regime, a, the number of individuals in that class in that state corresponds to Cr(hp), the number of individuals in that class across the USA to Cr(h), and the net income under a of anyone in that class to a(h). The intuitive story translates into a literal proof of Equation (3). Since Crh=Σp∈PCr(hp) , the right-hand side of Equation (3) is2: maxa∈MΣp∈PΣh∈HCrhpah. (4) But ‘the sum of the maxima exceeds the maximum of the sums’. (4) chooses a single a∈M , call it a*, that maximizes Σp∈PΣh∈HCrhpa(h) . But the left-hand side of Equation (3) chooses, for each p∈P , an ap∈M that maximizes Σh∈HCrhpa(h) . So if p∈P then Σh∈HCrhpap(h)≥Σh∈HCr(hp)a*(h) ; Equation (3) follows. Let’s apply this to Red Rum. Before choosing whether to bet you can listen—for free—to a tip. This has two possible outcomes: the tipster forecasts either (p1) that Red Rum wins or (p2) that he loses. The forecast needn’t be reliable in your opinion; but you have some opinion about its reliability. Suppose you think a win has probability x if forecast and y if not. So Crh1p1=x and Crh1p2=y . Since the forecast is free, your payoffs in this new problem—Red Rum*—are as described in Table 2. Table 2. Red Rum* h1p1: forecast win, win h2p1: forecast win, loss h1p2: forecast loss, win h2p2: forecast loss, loss a1: bet 1 −1 1 −1 a2: no bet 0 0 0 0 a3: listen to tip 1 if x > 0.5 −1 if x > 0.5 1 if y > 0.5 −1 if y > 0.5 0 if x ≤ 0.5 0 if x ≤ 0.5 0 if y ≤ 0.5 0 if y ≤ 0.5 h1p1: forecast win, win h2p1: forecast win, loss h1p2: forecast loss, win h2p2: forecast loss, loss a1: bet 1 −1 1 −1 a2: no bet 0 0 0 0 a3: listen to tip 1 if x > 0.5 −1 if x > 0.5 1 if y > 0.5 −1 if y > 0.5 0 if x ≤ 0.5 0 if x ≤ 0.5 0 if y ≤ 0.5 0 if y ≤ 0.5 View Large Table 2. Red Rum* h1p1: forecast win, win h2p1: forecast win, loss h1p2: forecast loss, win h2p2: forecast loss, loss a1: bet 1 −1 1 −1 a2: no bet 0 0 0 0 a3: listen to tip 1 if x > 0.5 −1 if x > 0.5 1 if y > 0.5 −1 if y > 0.5 0 if x ≤ 0.5 0 if x ≤ 0.5 0 if y ≤ 0.5 0 if y ≤ 0.5 h1p1: forecast win, win h2p1: forecast win, loss h1p2: forecast loss, win h2p2: forecast loss, loss a1: bet 1 −1 1 −1 a2: no bet 0 0 0 0 a3: listen to tip 1 if x > 0.5 −1 if x > 0.5 1 if y > 0.5 −1 if y > 0.5 0 if x ≤ 0.5 0 if x ≤ 0.5 0 if y ≤ 0.5 0 if y ≤ 0.5 View Large The expected utilities are: EUa1=2Crh1-1, (5) EUa2=0, (6) EUa3=Crp1max2x-1, 0+Crp2max2y-1, 0. (7) Now 2Crh1-1=Crp12x-1+Crp22y-1 . So (7) ≥ (5), (6) for any x, y. It’s always rational to listen; doing so can’t worsen but can improve things, in expectation.3 So much for GT. 3 Inexact Observation GT is intuitive and its proof is simple, so counterexamples are interesting. The first—using a case suggested, for different purposes, by Williamson ([2011])—is as follows: You are facing an unmarked clock with a single digit that can point in any of sixty uniformly separated directions that we (but not the clock) label 0 to 59. Your discrimination of where the digit is pointing is limited. To be reliable in your judgement you must leave a margin of error. If the digit is in fact pointing at 53, you can reliably judge that it is pointing between 52 and 54 inclusive, but you are unreliable about stronger claims. Similarly, for every other position.4 Plausibly, your evidence is the strongest claim you can reliably get right. This means that the maximal propositions you learn in the various scenarios overlap. Let D be the digit’s true direction. If D=53 , your evidence is that D∈{52, 53, 54} . If D=52 , it is that D∈{51, 52, 53} . Each scenario yields evidence compatible with the other. But they yield different evidence. Call world w2 accessible from w1 if your evidence in w1 is consistent with w2. Accessibility is not transitive. D=53 is consistent with the evidence from looking if D=52 . D=54 is consistent with the evidence if D=53 . But D=54 is not consistent with the evidence if D=52 . More generally the situation is as in Figure 1. Figure 1. View largeDownload slide Accessibility relations on an unmarked clock. Figure 1. View largeDownload slide Accessibility relations on an unmarked clock. Examples like this have been widely discussed in epistemology.5 They are interesting because they show how one might receive evidence without knowing that this is the evidence one received. When (say) D=52 , your evidence is that D∈{51, 52, 53} . But if D=53 , which is consistent with what you learned (namely, with D∈{51, 52, 53} ), your evidence would have been that D∈{52, 53, 54} . So, while your evidence is that D∈{51, 52, 53} , you do not know this.6 If you did know this, you could combine it with your knowledge of the setup to infer that D=52 , since that is the only case in which you get this evidence. But it’s implausible that you could learn something this exact from looking at the clock—even if you did know the setup. While widely discussed in epistemology, there has been little discussion of how such cases bear on decision theory, specifically on GT.7 Yet they do. Let O say that the digit is pointing at an odd number, E that it is pointing at an even number (calling zero even). And suppose you haven’t looked at the clock yet, but know that if you do, you will conditionalize on what you learn.8 Then by your own lights ex ante, looking is misleading regarding O and E.9 Suppose O, say D=53 . Then looking rules out all possibilities except that and the ‘adjacent’ ones D=52 and D=54 . Of these, two are in E and one is in O. So your evidence supports E.10 Similarly, if E is true, looking will support O. This fact—that, by your own lights ex ante, looking is misleading—creates failures of GT. Suppose you are offered two bets. ODD costs 60¢ and pays $1 if O. EVEN costs 60¢ and pays $1 if E. You can take either or neither now, or you can look at the clock before deciding. Then you should think it a bad idea to look. Your evidence now supports not betting. Suppose you look before deciding. If D is odd, your evidence will support E to degree 0.67, making it rational to buy only the losing bet EVEN. If D is even, the evidence will make it rational to buy only the losing bet ODD. Either way, you pay 60¢ for a losing bet if you look first. You know all this beforehand. So you know that it’s a bad idea to look first. This can seem puzzling. You know throughout that: Your evidence on looking is: D∈51, 52, 53 , if and only if D = 52 if and only if D = 52; and if D = 52 then ODD is a losing bet.(8) Why, then, do you pay for ODD upon receiving D∈51, 52, 53? The answer is just what makes this case epistemologically interesting. Receiving D∈51, 52, 53 does not tell you that you received D∈51, 52, 53 . So, upon receiving D∈51, 52, 53 , you cannot apply modus ponens to (8) to conclude that ODD is a losing bet. Once we understand this crucial, but surprising, feature of the example, the puzzle disappears. We’ll discuss three objections. The first two arise from the fact that, according to our description of the case, it allows you to receive evidence without knowing that you have received it. First Objection: This shows that we have mis-described the example. You can always tell what your evidence is, so the evidence can’t be as we claimed. Response: It’s natural to think you can always tell what your evidence is. It’s also natural to think that your evidence when looking at an unmarked clock is as we said it was. The two conflict. Clearly, we cannot resolve this conflict here. However, we do not need to. If the debates about inexact perception have taught us anything, it’s that it isn’t obvious what to say—and hence not obvious that the case does not work as we say. This suffices for our puzzle. GT is supposed to be a platitude. If it depends on a far-from-obvious claim about how inexact perception works, it isn’t one. Second Objection: Grant that our description of your evidence is correct: you receive evidence without knowing that you received it. But then how can it influence you? The argument against Good took for granted that (you know ex ante that) if you look at the clock then your choice will maximize EU relative to the credence you then acquire. That assumption was needed to argue (8) that you will buy the losing bet if you look. But why think you will maximize EU relative to that credence function if looking leaves open what it is? Response: This objection assumes that to act on a belief you must know what it is.11 The underlying picture of practical rationality is this: the EU-maximizer surveys her credences and utilities, compares the EU of her options, and chooses one that scores highest. This picture is wrong. ‘Practical rationality’ doesn’t constrain how an agent chooses in light of her beliefs and desires, but only what choices she makes given that she does in fact have those beliefs and desires. In particular, we want to evaluate the choices of creatures who don’t know that they have beliefs, let alone what they are. Chrysippus’ dog, faced with three paths, set off down path C after smelling that its quarry was not on paths A or B. We want to say the dog acted rationally: given its belief that the quarry was on path C, it would have been irrational to set off down path A. But the dog does not know it has this belief. So we cannot say this if practical rationality requires doxastic self-knowledge. (Similarly, eliminativists in the philosophy of mind deny that anyone has beliefs, so cannot know the contents of their own. This does not protect them from charges of practical irrationality.) The third objection grants the overall structure of the case, but challenges the details. Third Objection: Grant that looking eliminates values far from D and leaves open close ones. It doesn’t follow that you distribute credence uniformly over the remaining possibilities. More likely you concentrate on central values within the range of still-live possibilities. So a glance when D=52 might shift you to some Cr* satisfying: Cr*(D=51)=0.1, (9) Cr*(D=52)=0.8, (10) Cr*(D=53)=0.1. (11) But Cr* will prompt you to bet EVEN. Generally, if looking makes your credence as sharply peaked as Cr* about the centre of its support, then looking is a good idea ex ante.12 Response: Grant that a glance adjusts your credence to some Cr* symmetric about and modal at the true value of D, and not uniform over its support. Still, if Cr* is ‘close enough’ to uniform, then our problem still arises given adjusted charges for the bets. Let [j] be the proposition that D = j mod 60 , and let Cr*([i]) = x and Cr*i-1=Cr*i+1=y if in fact D = i. Since we can pick the distance between the positions as we like, there’s no harm in assuming that Cr*i-1∪i∪i+1=1 , so that x + 2 y = 1. We can reprice the bets ODD and EVEN at $ c . Then, as long as 0.5<c<2y , looking at the clock motivates taking (only) the losing bet on its position. Such a c exists whenever y>0.25 . Glancing may shift your credence to a distribution violating these conditions—as in Equations (9–11)—and then the example creates no trouble for GT, whatever the charge on each bet. But why must it? It is easy to imagine evidence to the contrary. Suppose that you are repeatedly forced to guess D at a glance. You are right one time in three and never out by more than one. If we like we can build this into the case. It might seem strange that when D = i , Cr*([i+1]) and Cr*([i-1]) both exceed 0.25 and Cr*([i+2]) and Cr*([i-2]) are both zero, since then the probability that the digit is pointing at j does not decrease linearly to zero with the angular distance between j and i, but rather more quickly as we get further from i. But this is not so implausible. Suppose you have visual receptors corresponding to each second of arc on the clock-face. When you look at the clock and D = d*, visual receptors fire at a rate that is normally distributed about the true position: those corresponding to a position z seconds of arc away from d* fire at a rate proportional to e-z2/σ2for some constant σ . And suppose that looking rules out a position if and only if the receptors corresponding to that position fire at a rate below some threshold Δ > 0. Then Cr*(D = x) will fall first gently and then sharply—that is, non-linearly—towards zero as |x-d*| increases, just as in our model. Again, we needn’t show that our problem case actually arises, only that it would in circumstances that are neither ruled out a priori nor excluded from the intuitive principle (‘look before you leap’). y>0.25 meets those conditions: nobody ever took GT to hold only if perception doesn’t work like that. It is hardly platitudinous that it doesn’t. Neither therefore is GT itself. Where does Good’s proof go wrong, then? Good identifies ‘making an observation’ with learning exactly which element of some partition is true: specifically, he assumes you are certain ex ante that the maximal proposition learnt by observation is inconsistent with any other maximal proposition you might learn by observation. Without this, there is no reason why either side of Equation (2) should represent the expected utility of observing. Our example exhibits observations for which no partition P is such that you are certain ex ante that making the observation teaches you exactly which p ∈ P is true. D∈51, 52, 53 and D∈ {52, 53, 54} are both propositions that might exhaust what you learn by looking; but they are consistent, since both hold if D=52 . So the problem is not that Good’s premises fail to entail his conclusion, but that they understand ‘observation’ too narrowly. Without this narrow understanding, there is no guarantee that a policy that adjusts one’s bet to the contents of the observation will do at least as well ‘in expectation’ as taking whatever bet looks optimal ex ante.13 Good’s proof does not apply to anyone whose observations are inexact. And it’s no platitude that there aren’t—much less couldn’t be—people like that. 4 Independence The second counterexample is better known: we present it more briefly.14 Let h1, h2, and h3 partition W and let gambles a1–a4 on these events give you terminal wealth (in millions of dollars) as specified in Table 3. Table 3. Allais h1 h2 h3 a1 0 5 0 a2 1 1 0 a3 0 5 1 a4 1 1 1 h1 h2 h3 a1 0 5 0 a2 1 1 0 a3 0 5 1 a4 1 1 1 View Large Table 3. Allais h1 h2 h3 a1 0 5 0 a2 1 1 0 a3 0 5 1 a4 1 1 1 h1 h2 h3 a1 0 5 0 a2 1 1 0 a3 0 5 1 a4 1 1 1 View Large It follows from EU-maximization that a rational wealth-lover prefers a1(a2) from M12=a1,a2 if and only if she prefers a3(a4) from M34=a3,a4 .15 That is, a1 ≻ a2 if and only if a3 ≻ a4 and a1 ≽ a2 if and only if a3 ≽ a4. That is descriptively false. If h1 says that in a fair lottery over [1, 100] the integer drawn is 1, h2 that it lies in [2, 11] and h3 that it lies in [12, 100], most people have a1 ≻ a2 and a4 ≻ a3. This is the Allais paradox (Allais [1953]). That descriptive mismatch may be normatively irrelevant. But allow—following some decision theorists—that these widespread ‘Allais preferences’ are rationally permissible. Now suppose you face M12 and M34 on separate occasions. The draws are independent and you may choose on either occasion without reference to the other. Before betting in each case, you can make an observation, P, that teaches you one of two things: p1=h1∪h2, p2=h3. Think of P as gathering incomplete but accurate information about the draw: conducting P tells you exactly whether the chosen integer exceeds (11). Should you observe P? It seems that if ex ante you prefer a1 to a2 and a4 to a3 , and know you will choose rationally after observing, then in at least one situation you should not.16 Suppose first that you learn p1. Then you are indifferent between a1 and a3 . Those gambles only differ in the event (h3) that your observation rules out. Similarly, you are indifferent between a2 and a4 . So on learning p1, you have a1 ≻ a2 if and only if a3 ≻ a4 , and a1 ≽ a2 if and only if a3 ≽ a4 , given that ≽ is transitive. So, in either M12 or M34, you are at least open to choosing what you initially reject.17 Or, suppose you learn p2. Now you are indifferent between a1 and a2 , since they assign h3 to the same payoff, and between a3 and a4 for the same reason. So in both cases, learning p2 makes you indifferent between your options. So either in M12 or in M34 it will seem ex ante counterproductive to conduct the observation P: whatever you learn will make you open to the option that you now reject, with no compensation. Your position ex ante therefore violates GT. We can put it in terms of our taxation analogy. Suppose the government cares not only about the aggregate but also about the distributional effects of tax. Specifically, it marginally prefers tax schemes that make income more equal. Suppose three economic classes, h1, h2, and h3, and four tax regimes, a1, a2, a3, and a4, with net incomes of each class as in Table 3. Then the government may prefer a1 to a2 but a4 to a3, because the equality under a4 more than compensates for its loss of income relative to a3; whereas the equality under a2, being imperfect, does not compensate for its loss of income relative to a1. Suppose now that the entire US population lives in two states: all those in classes h1 or h2 in Alabama, and all those in class h3 in Wyoming. And suppose the government is choosing between two tax regimes, say, a1 and a2. Then Good’s recommendation is effectively to apply in each state the regime that is—by the government’s lights—optimal for that state. This may not yield a result that is at least as good—by those lights—as whichever of a1 and a2 is preferred overall. Optimizing on a state-by-state basis ignores the distributional effects across states that made a4 overall preferable to a3. Returning from the analogy: if the agent marginally disprefers variability in gambles, then the compound gamble, which realizes in each event in a partition the optimal gamble for that event, might look sub-optimal ex ante precisely because it ignores her aversion to cross-event variability. This counterexample differs significantly from the last. The ‘clock’ objection grants (i) that one should learn, before choosing, which element of a partition is true, but denies (ii) that looking is always a way to do that. The Allais-based objection attacks (i). The Allais subject should find it irrational to learn, before choosing from (say) M12, which of h1∪h2,h3 is true. Both objections oppose literally looking before leaping, but here this is a side-effect of denying that you should learn from a partition before leaping. The Allais case highlights Good’s reliance on a decision theory that prohibits Allais preferences. What does this in the classical theory is: Independence Axiom (IA): Let a1,a2,a3,a4 be acts and let h,h* partition W. Suppose: (i) a1w=a3(w) and a2w=a4(w) for each w∈h , (ii) a1w=a2(w) and a3w=a4(w) for each w∈h* . Then a1≻a2 if and only if a3≻a4 .18 Intuitively, a rational person who prefers (say) lottery ticket L1 over L2 should prefer any bet with prize L1 to any with prize L2 but the same downside. It is easy to see why IA prohibits Allais preferences: putting h=h1∪h2 and h*=h3 , IA implies both a1≻a2↔a3≻a4 and a1 ≽ a2 ↔ a3 ≽ a4, with a1–a4 as in Table 3. Since the Allais preferences look reasonable, it’s not immediately obvious that rationality demands independence. It’s also not obvious on reflection. EU-maximization implies that anyone who (i) has concave utility for money and (ii) always declines a 50/50 bet that wins $110 or loses $100 should (iii) decline a 50/50 bet that wins $x or loses $1000, for arbitrarily large x.19 This oddity arises from IA. Moreover, plausible alternatives exist. Many versions of decision theory, by dispensing with IA, permit Allais preferences, and some are appealing not (only) descriptively but as standards of rationality.20,21 So it isn’t as though abandoning IA leaves no concept of practical rationality at all. And the possibility of abandoning it leaves GT looking shakier than it did.22 Still, there are well-known pragmatic arguments for IA. They typically infer the rationality of IA from the premise that violating it leaves one open to exploitation.23 Suppose that you start out with a1 ≻ a2, a4 ≻ a3, but if you learn p1 then you have a3 ≻ a4. A cunning bookie offers a choice between (a) choosing from a3 and a4 after learning which of {p1, p2} is true and (b) paying $1 to choose without first learning this. You know that on (a), whatever you learn, your choice will make you worse off (by your own lights ex ante) if it makes any difference. So you choose (b) and a4. So you are paying $1 for a4 when you could have had that gamble for free. Your violating IA is what makes you thus exploitable. Hence, it is argued, rationality demands IA. And we might conclude that it’s both harmless and unsurprising that dropping it puts you beyond the scope of GT. Various responses exist. Some reject the premise. There are, they point out, no cunning bookies who know your preferences and can demand payment to withhold information. And if there were you’d be sure to avoid them. So this ‘pragmatic’ difficulty with Allais preferences is hardly real (Christensen [2004], p. 110; see also Lewis [1999], p. 133). Others reject the validity of the argument. Some say that by choosing (b) and then a4, you are not really throwing away $1, since the option of ‘a4 for free’ was never genuinely available. You knew in advance that if you were to choose (a) then, whatever you learn about p1 and p2, you would not take the gamble a4 (unless it made no difference) (Rabinowicz [1995]; Buchak [2013], pp. 189–90). More radically, some say that practical rationality constrains your time-slices, not your temporally extended self (Hedden [2013]). Just as the Pareto inefficiency of the prisoners’ dilemma equilibrium is consistent with both players’ rationality, so the diachronic exploitability of the Allais subject is consistent with her time slices’ rationality. And there is nothing else to count as irrational. But, setting aside exploitation, someone might argue for IA as follows: It is independently plausible that you should learn from a partition (whether or not you must pay not to). But violation of IA implies that you’d avoid doing that. So we can defend IA on the basis of something like GT itself. But, having set exploitation aside, is it obvious, independently of an antecedent commitment to IA, that practical rationality demands uptake of free evidence? Clearly, learning will improve your anticipated return from bets on propositions that the evidence settles conclusively. But what about bets on a proposition p that the evidence doesn’t settle conclusively? The evidence may move your credence in p closer to the truth (if, say, it is evidence for p, and p is true), but it may also move your credence further from the truth (if, say, it is evidence for p, but p is false). In the first case, it will increase your returns; in the latter, it will decrease them. So a little learning carries risks. Classical decision theory says that the potential benefits always outweigh this risk, but theories that reject IA because of its incompatibility with intuitive risk-avoidance may well reach a different verdict. So the attractiveness of free evidence is not a neutral starting-point from which to launch an argument for IA.24 These responses to the arguments for IA are not decisive. We don’t mean to endorse them. Nor, more generally, do we take a stand on whether IA is rationally compulsory. We simply point out that it is not obviously so—not, for instance, in the way that transitivity of preference seems to be. And if IA is not platitudinous, then neither is GT. Our two counterexamples show that GT rests on controversial assumptions (i) about observation and (ii) about practical rationality. This is puzzling. We said at the outset that ‘look for free before you leap’ seems platitudinous. Should we conclude that this is just wrong?—That in fact our confidence in this ‘platitude’ should not exceed our confidence in the highly unobvious assumptions (i) and (ii)? The straight answer must be ‘yes’. Even when looking is free, looking before leaping is not a platitudinously good idea. It may not be a good idea at all. But we can give a less disappointing, if less straight, answer by showing how to approximate the ‘platitude’ while avoiding the questionable assumptions that underlie it. 5 Conditionality There is a platitude that avoids the counterexamples while capturing something of the intuitive content of GT. Section 5.1 states and proves the claim, which we call ‘Conditionality’. Section 5.2 shows how Conditionality avoids the difficulties facing GT, and that GT is a special case of Conditionality in the kind of environment that Good (mistakenly) took for granted. 5.1 The principle First, note that we can represent a question as a partition of W, the elements of the partition being its possible (complete) answers (Hamblin [1958]). ‘Who came to the party?’ can be represented as the partition containing ‘No one’, ‘Only John’, ‘Only Mary’, ‘John and Mary and no one else’, and so on. Moreover, for every partition, there is a corresponding question (‘Which element of this partition is actual?’), so we can move freely between the two ways of talking. In these terms, our platitude is: Conditionality (C): A rational agent will make her action depend on the (true) answer to any question, whenever she can freely do so. What does it mean to make your action depend on the answer to a question? Suppose you expect to choose from menu M, consisting, say, of a bet on heads (H) and a bet on tails (T) on the next toss of this (possibly biased) coin. Then to make your decision depend on Q—say, whether it rains tomorrow—is to choose instead from the menu MQ, consisting of all the ways for the choice from M to depend on the answer to Q. In our example these are: bet on heads if rain, bet on heads if no rain (HH); bet on heads if rain, bet on tails if no rain (HT); bet on tails if rain, bet on heads if no rain (TH); bet on tails if rain, bet on tails if no rain (TT). So Conditionality says that you are ex ante better off choosing from this second menu. Note that ‘making her action depend on the answer to a question’ means choosing from all the ways in which the action can depend on the answer. In particular, it includes vacuous dependence: realization of the same option given any answer. HH and TT illustrate such vacuous dependence. Allowing for this is what makes C platitudinous. Note also that C does not require that the agent be in a position ever to learn the answer to the question, let alone before choosing. C only tells her to employ some (free) mechanism that makes the option realized dependent on the answer. This needn’t involve checking for herself what that answer is. For instance, suppose you can use a computer to place your bet. You can program the computer to make the bet dependent however you like on some condition to which the computer is sensitive but which you cannot observe and might never learn—say, the material composition of the coin. C advises you to use the computer (whereas GT is silent on this). This illustrates that C, unlike GT, is not especially about observing or learning before acting. It deals with a more basic activity: making one’s act depend (optimally) on how the world is (in some respect). Intuitively, learning before deciding is a way to achieve such dependence—and as we’ll see, GT follows from C when it is. But as we’ll also see, learning is not a way to achieve such dependence in our counterexamples; that’s why GT can fail there. Because C isn’t about learning, its restriction to questions (= partitions) isn’t justified by a theory of learning. Instead it rests on the observation that a conditional act is ill defined unless specifiable relative to a partition—a set of subsets of W that are disjoint and jointly exhaustive. If the conditions are not disjoint, the conditional act could make impossible demands: the conditional act of buying this car if it is Japanese but not if it is a four-wheel drive cannot be realized if the car is a Toyota Land Cruiser. If they are not exhaustive, the conditional act may specify no prize, for instance if the car is a Citroen 2CV. C’s focus on partitions flows from the nature of acts, independently of issues about learning. So much for what C says; on to its proof. Its mathematical basis is this principle, which is trivial when Y is finite: Principle of Maximization (PM): If X⊆Y and V:Y→R is a function then maxx∈XVx≤maxy∈YV(y) . We informally sketch the route from PM to C. If you can make the option realized from M dependent as you like on the answer to Q, then you can make it vacuously dependent: so everything in M is available if conditionalization is available. So by PM, the conditional option that maximizes whatever you care about (for instance, EU) does at least as well as any that maximizes it in M. If Alice can choose whichever of {HH, HT, TH, TT} maximizes her expected utility, she will do at least as well (ex ante in expectation) as when choosing from {H, T}, because the former set includes the latter. Now a formal argument. We first prove the formal version of C: Formal Conditionality (FC): Suppose a finite menu, M, of acts such that each a∈M takes each h in some partition H of W to an outcome ah=z∈Z . Let Q be an arbitrary question. Let F=MQ be the set of all functions from Q to M and for any f∈F and p∈Q let fpbe the act f (p). Define M* to be the following set: a∈A∃f∈F ∀w∈W ∀p∈Q ∀h∈H:w∈p∩h→aw=fp(h) . Then for any function V:A→R , maxa∈MVa≤maxa∈M*V(a) . Proof We need to show that (i) M* exists and is a set of acts, and (ii) that for any V, maxa∈MVa≤maxa∈M*V(a) . (i) Since H and Q both partition W, so does H⊗Q=def.h∩ph∈H,p∈Q . Hence any w ∈ W lies in exactly one element of H⊗Q . So M* is well defined and its elements are all functions from W to Z, that is, acts. (ii) For any a ∈ M, consider the function fa:Q→M defined as fap=a . Then fa∈F , and if h ∈ H, then fpah= ah=a(w) . So a∈M* . Therefore, M⊆M* . Since M is finite, so is M*. So PM applies to yield the result.□ To get from FC to C we need this decision-theoretic assumption: Representability (R): ≻ is representable, that is, ≻ is asymmetric and ≽ is transitive. If R holds and A is denumerable (which we assume), then some value function V from acts to real numbers satisfies the following condition: for any a,a′:a≻a′↔Va>Va′ .25 By FC, we know that if the agent faces M then for any question Q, maximizing V on MQ—that is, making the option realized from M optimally dependent on the answer to Q—attains at least as high a V-score as maximizing V on M. By R, the agent is doing at least as well in the former case as in the latter, by her own lights ex ante. The only substantial assumption here was representability. This fragment of classical decision theory is far less demanding than that necessary for GT. We have already seen that the latter involves IA, which many decision theories reject. But most of these non-classical decision theories still endorse R.26 Conditionality is therefore platitudinous and relatively weak. Platitudinous because the mathematical idea behind it is—notwithstanding the tedium of FC itself—the utterly simple idea that a function attains a (weakly) greater maximum over a finite set than over any of its subsets. Weak because the decision-theoretic idea behind it—representability—is widely accepted and intuitively quite plausible. It is not universally accepted. So Conditionality is not a complete triviality. Someone who rejects R might perhaps reject C.27 But C should appeal more widely than any principle that prohibits the Allais preferences. 5.2 Revisiting the counterexamples Neither of our two examples conflicts with C. It’s tempting to think they must because they conflict with GT, and GT seems to follow from C. Roughly, this is because it seems that observing and then deciding is always a way to make one’s decision depend optimally on the answer to a question. More carefully, suppose that a rational agent is choosing from M, and has the opportunity to conduct an observation. It’s tempting to accept: Questions: Any observation can be thought of as providing the complete answer to some (antecedently specifiable) question. So let Q be the question that the observation would answer. By C, our agent prefers choosing from MQinstead of M. It is also perhaps natural to think Equivalence (E): For a rational agent, choosing from M after learning the answer to Q is equivalent to (leads to the same outcome as) choosing from MQ.28 Putting these together, it follows that our agent prefers choosing from M after learning the answer to Q over choosing from M. Since choosing from M after learning the answer to Q is just what it is to look first, our agent prefers looking before leaping. So GT follows from C given initially plausible principles. Nonetheless, neither of our examples conflicts with C. For, as we’re about to show, each of the examples conflicts with a different premise in this derivation. 5.2.1 The unmarked clock The unmarked clock resists the slide from C to GT by being a counterexample to Questions: there is no question such that looking at the clock guarantees that you learn exactly the complete answer to it. Some things you might learn are consistent with others. So the things you might learn don’t partition W. So they aren’t all complete answers to a single question. Note that looking is, even here, a way to make your decision depend on the answer to some question or other. Let qi be the proposition that you learn i-1∪i∪i+1 . Then Q=qi0≤i≤59 is a question, and which post-glance option you choose depends on its answer: you bet ODD if the answer is qi for even i, and EVEN if the answer is qi for odd i. But this dependence is not optimal ex ante: it differs from the pattern ‘bet ODD if the answer is qi for odd i, bet EVEN if the answer is qi for even i’, which is obviously what you’d choose if allowed to make your bet depend optimally on the answer to Q. But this non-optimality is unsurprising: why should looking at the clock make your bet optimally dependent on the answer to Q when it doesn’t teach you that answer? The unmarked clock would refute C only if looking at the clock, then doing what you think best, were equivalent to choosing an ex ante optimal pattern of dependence of your choice on the answer to some Q. But it can’t be. For as we argued, looking at the clock, and then doing what you think best, means betting ODD (EVEN) if D is even (odd), hence a sure loss. Yet one initial option was not to bet, which is strictly better. So for every Q, the (vacuous) pattern of dependence ‘take no bet whatever the answer to Q’ is preferable to looking and then doing what you think best. So the latter compound action can’t generate an ex ante optimal pattern of dependence on Q. C is safe from the unmarked clock. 5.2.2 Allais C is also safe from the Allais case. Suppose a subject prefers a1 to a2 and a4 to a3, and she actually faces the choice (i) between a1 and a2. Intuitively, C says that she is no worse off by her own lights if she now makes the final selection dependent on which of h1∪h2 and h3 is true in whatever way now seems optimal to her. Inspection of the payoffs shows that she will choose the (vacuously) dependent act from a1,a2h1∪h2,h3 that realizes a1 in either circumstance. Similarly, suppose she faces the choice (ii) between a3 and a4. If choosing from the conditional acts, she will now choose the dependent act that realizes a4 in either case. The important point is that in (i) and (ii), these dependent acts make her no worse off by her own lights ex ante. So C is consistent with the Allais preferences. By contrast and as we saw, GT is not. Given the Allais preferences a1 ≻ a2 and a4 ≻ a3, it must hold either in (i) or in (ii) that choosing after learning which of h1∪h2 and h3 is true must make her worse off by her own lights ex ante.29 Returning one more time to the taxation analogy: Suppose again that every US citizen resides in Alabama or Wyoming (not both), with those in h1 or h2 resident in Alabama and those in h3 resident in Wyoming, and that the tax regimes a1–a4 affect these classes as in Table 3. Then C says only that a government choosing from a1 and a2 is rational to make the regime faced by a citizen somehow dependent on the citizen’s state of residence. This is consistent with the government’s having distributional aims that make it prefer a4 to a3. It is consistent with C that the government prefers a1-in-Alabama-and-a1-in-Wyoming to a2 but also a4-in-Alabama-and-a4-in-Wyoming to a3, because each preferred system represents some way of making the tax regime conditional on the state of residence, which is all that C recommends. More formally: C implies that anyone facing M12(M34) is (by her own lights ex ante) no worse off when choosing from the menu of dependent acts M12Q(M34Q), where Q is the question whether h3 (as opposed to h1∪h2 ) is true. That is trivial, since choosing from M12(M34) is the same as choosing from M12Q(M34Q). For the options in M12 are a1 and a2 while the options in M12Q are (in an obvious notation): (i)h1∪h2→a1,h3→a1, (ii) h1∪h2→a1,h3→a2, (iii) h1∪h2→a2,h3→a1, (iv) h1∪h2→a2,h3→a2. Since options are functions from possible worlds to prizes, and a1 and a2 have identical prizes throughout h3, we may identify (i) with (ii) and (iii) with (iv). Clearly (i) is equivalent to a1 and (iv) to a2. So M12Q collapses into M12. Similarly, M34Q collapses into M34. So C holds in the Allais example. Since the observation does exactly and completely answer the question whether h3 is true, the relevant instance of Questions also holds. So the Allais case must be a counterexample to E, the principle that for an agent who acts rationally, choosing from M after learning the answer to Q yields the same result as choosing from MQ. And this is exactly what we found. When the agent learns the answer to Q before choosing, she is liable to pick options from M = MQ that she initially rejects.30 So neither counterexample to GT threatens C, supporting our claim that C is platitudinous. We’ve also seen how to derive GT from C using the initially plausible, but on reflection non-obvious, principles Questions and Equivalence, thus revealing the sense in which GT is the special case of Conditionality that we get whenever those controversial principles do in fact hold. 6 Conclusion Good’s ([1967], p. 319) paper began with Ayer’s question: ‘why, in the theory of logical probability (credibility), should we bother to make new observations?’. GT answers that observation pays when its cost is negligible. We’ve shown, first, that it need not pay unless (i) observation is partitional and (ii) rational choice respects independence—neither of which is obvious. But second, Conditionality holds irrespective of these assumptions, requiring only that preference be representable. ‘Look before you leap’ blends assumptions about perceptual epistemology and decision theory, making it only questionably true and clearly not platitudinous. ‘Make your actions depend on the world when you can’ incurs a lighter, purely decision-theoretic commitment that gives it, in our view, a better claim to being both. Acknowledgements Arif Ahmed wishes to thank Julien Dutant, Christian List, and an audience at the London School of Economics to whom he delivered an early version of this article. Bernhard Salow wishes to thank Nilanjan Das, Kevin Dorst, and Ian Wells. We both wish to thank two referees for this Journal for insightful comments that led to many improvements. Footnotes 1 We assume that the agent has increasing linear utility for money. Nothing turns on this. 2 Using Σx∈XΣy∈Yf(x,y)=Σy∈YΣx∈Xf(x,y) . 3 GT does not say that you will actually do better by listening. The tip might mislead. GT says that listening is better ‘in expectation’, from the perspective of your ex ante credence. 4 In reality, it’s presumably vague what margins suffice for your judgements to count as ‘reliable’. But the problem arises for any fixed size of the margin above a certain lower bound. Hence it arises on both epistemic and supervaluational approaches. 5 Williamson ([1992]) first defends cases with roughly this structure. Much of the responding literature focuses on knowledge, rather than evidence. Exceptions include (Christensen [2010]; Elga [2013]; Horowitz [2014]), which sympathetically discuss the above description. Cohen and Comesaña ([2013]), building on (Stalnaker [2009], pp. 405–6), develop an alternative formal treatment, which—when applied to the clock—would make the case consistent with GT. Hawthorne and Magidor ([2010]) and Williamson ([2013], pp. 80–3) criticize this alternative. 6 All you know about your evidence is that it is either D∈50, 51, 52 or D∈51, 52, 53 or D∈52, 53, 54 . 7 Though see (Das [unpublished]; Dorst [unpublished]). Other related literature differs in focus. Geanakoplos ([unpublished]) shows that failures of GT arise from imperfections in the processing of partitional observation: taking a signal at face-value, forgetfulness, wishful thinking, doxastic obstinacy, or failures of imagination. By contrast, we argue that observation of the unmarked clock is itself non-partitional, which undermines GT even for agents lacking all those imperfections. Williamson ([2000], pp. 230–7) discusses non-partitional observation and its relevance to decision theory, but focuses on exploitability. Bronfman ([2014]) and Schoenfield ([forthcoming]) argue that these cases make conditionalization non-accuracy-maximizing. They are opposing the epistemic optimality of processing information in the usual way; we are opposing (and Good is defending) the pragmatic optimality of seeking information in the first place. The literature also discusses how imprecise probabilities bear on GT. Good ([1974]) himself raises this worry, attributing it to Isaac Levi and Teddy Seidenfeld; Seidenfeld ([2004]) and Bradley and Steele ([2016]) discuss it in detail. However, imprecise probabilities and inexact observations raise different issues. Inexact observation, as described above, is consistent with the relevant probability distribution assigning to each proposition a single real number, hence consistent with standard expected utility theory. By contrast, imprecise probabilities violate standard expected utility theory. Counterexamples to GT that arise from such imprecision are thus more like our second type of counterexample; see Footnote 22 below. 8 This assumption, that you know ex ante that you are a Bayesian, is essential. But it is one that Good himself both makes and needs: without it we lose motivation for Equation (2), which is crucial to Good’s proof. So if our example undermines the assumption, it leaves Good with problems as serious as—though admittedly quite different from—those we want to raise. 9 Compare (Horowitz [2014], pp. 735–40), which tentatively defends this feature of the example. 10 At least if, as we can assume, your initial distribution is uniform, that is, CrD=x=1/60 if x=0, 1,…,59 . 11 A less demanding version of the objection says only that you must know at each point what your preferences are. This rules out the particular case (where you won’t know your preferences after looking), but not natural variants. Imagine that you’ll get to see the hand for slightly longer when it’s pointing at an odd number, so that in those cases you can reliably detect its exact position—but the added time is short enough that you can’t detect whether you’ve been given it. Then you know beforehand that looking will give you evidence that the number is odd (raising its probability to 1 if it is, or 0.67, if not), so that your later preference will be to bet ODD whatever you learned. So you’ll also know, after looking, that you then prefer to bet ODD. But your ex ante evaluation of looking, hence buying ODD, is still negative: the 0.5 chance of losing 60¢ outweighs the 0.5 chance of winning 40¢. 12 That you shift to Cr* is inconsistent with simple Bayesian updating on D∈51, 52, 53 given a uniform prior. A natural model of the shift is Jeffrey conditionalization (Jeffrey [1983], pp. 164ff.). The idea is that perception ‘directly’ adjusts your confidence in certain propositions (‘This cloth is green’, ‘ D=52’) within the open interval (0, 1). If perception changes your Cr by directly adjusting your credences in X1, … Xn respectively to Cr*(Xi), then its indirect impact on your credence is given by Cr*Y=Σi=1nCrYXiCr*(Xi) for any Y in the algebra. Good assumes ordinary conditionalization; Graves ([1989]) generalizes the argument to Jeffrey conditionalization. Our example shows that, much as Good’s argument requires an objectionably narrow definition of ‘making an observation’, such generalizations require an objectionably narrow view of what makes a Jeffrey shift a ‘genuine learning experience’. 13 Partitionality is not necessary for GT; Geanakoplos ([unpublished]) and Dorst ([unpublished]) identify weaker conditions that suffice. But since such conditions still rule out intuitive examples like the clock, it’s no more obvious that observation obeys them than that it is partitional. 14 For recent discussion, see (Buchak [2010]). 15 EUa3-EUa1=EUa4-EU(a2) , so EUa1>EU(a2) if and only if EUa3>EU(a4) and EU(a1)≥EU(a2) if and only if EU(a3)≥EU(a4) . 16 On the assumption that you know you will choose rationally, see comments in Footnote 8. 17 Indifference between a1 and a3 means a1 ≽ a3 and a3 ≽ a1; likewise for a2 and a4. So after you learn p1: if a1 ≻ a2, then a3 ≽ a1 ≻ a2 ≽ a4; so if a4 ≽ a3, then a2 ≽ a1 by the transitivity of ≽, contradicting a1 ≻ a2. Hence if a1 ≻ a2, then a3 ≻ a4. The converse is provable in the same way. Hence after you have learnt p1 you must have a1 ≻ a2 if and only if a3 ≻ a4. Similarly, if a1 ≽ a2, then a3 ≽ a1 ≽ a2 ≽ a4. So a3 ≽ a4 by the transitivity of ≽. Again, the converse is provable in the same way. Hence after you have learnt p1, you must have a1 ≽ a2 if and only if a3 ≽ a4. 18 Many, such as Peterson ([2009], p. 99), treat IA as a single axiom. In Savage’s original presentation, its content is spread across his definition D1 and postulate P2. (See the endpapers of Savage [1972]; cf. pp. 21–3.) 19 (Rabin [2000]). For other criticisms, see (Hansson [1988], pp. 149–51; McClennen [1990], pp. 77–80). 20 These include: prospect theory (Kahneman and Tversky [1979]), anticipated utility theory (Quiggin [1982]), generalized EU analysis (Machina [1982]), disappointment theory (Loomes and Sugden [1986]), Choquet EU theory (Schmeidler [1989]), risk-weighted EU theory (Buchak [2013]), and counterfactual desirability theory (Bradley and Stefánsson [2017]). 21 See especially (McClennen [1990]; Buchak [2013]). A complication: the Allais case violates GT only if we’re right that rational agents use ‘sophisticated choice’ when faced with sequential decision problems. McClennen denies and Buchak entertains denying this. 22 These worries about IA depend on the rationality of a form of risk-avoidance not permitted by classical decision theory. Many decision theories designed for imprecise probabilities also invalidate IA and, for that reason, also generate counterexamples to GT. Other decision theories for imprecise probabilities validate IA and may allow a weak version of GT. See (Seidenfeld [2004]; Bradley and Steele [2016]) for discussion. 23 For a summary of such arguments, see (Machina [1989], pp. 1636–8; Buchak [2013], pp. 170–3). 24 See (Buchak [2010], pp. 99–100). Thanks to a referee. Buchak also suggests that we can explain the oddness of avoiding free evidence by saying that it is irrational from an epistemic perspective; Campbell-Moore and Salow ([unpublished]) argue that we cannot say this if we accept rational risk-avoidance. 25 For proof, see (Kreps [1988], Chapter 3). 26 This includes anticipated utility theory, Choquet expected utility, risk-weighted expected utility, and counterfactual desirability theory, but not disappointment theory (see Footnote 20). 27 For alleged counterexamples to the transitivity of ≻ and hence (given asymmetry of ≻) to that of ≽, see (May [1954], pp. 6–7; Gehrlein and Fishburn [1976], p. 1). Decision theories employing imprecise probabilities may reject the transitivity of ≽ while accepting that of ≻. For they may allow incomparable options; and if a is incomparable to both b and c, yet b is preferable to c, we have c ≽ a and a ≽ b without c ≽ b. Many working on imprecise decision theories nonetheless maintain that if it’s unacceptable to choose a from M , it must also be unacceptable to choose a from any M’⊇M—see, for example, (Seidenfeld et al. [2010], p. 164, Axiom 1a). C follows straightforwardly from this, hence appeals even to some who reject R. 28 Or at least the same up to indifference given the answer. 29 But C does not itself counsel the agent to (pay to) avoid free evidence in Allais-type cases. Allais-type agents will indeed do that, and this may be objectionable (see the discussion towards the end of Section 4). But this is a consequence of their preferences, not a consequence of C itself, which is entirely consistent with IA. C, like transitivity, no more mandates the Allais preferences than it prohibits them. 30 It’s no coincidence that we needed counterexamples to IA to get a counterexample to E. 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The British Journal for the Philosophy of Science – Oxford University Press
Published: Jun 1, 2019
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