IV

 

On: preference/choice/self-interest/commitment

 

Issues:

 

Is there confusion in the use of these terms?

What interpretation should be given to an individuals’ preference ordering?

Is there a risk of ensuring self-interest maximisation in economic theory just through sloppy definition?

 

Considerations:

 

  1. Some traditional association of economic agents’ rational individual choices with self-interested choice (individual self-interest/social harmony; private greed/public virtue etc.). Self-interest also the initial basis of (e.g.) Prisoners Dilemma analysis.

 

  1. But individual choices/preferences in rational choice theory need not be self-interested (Hahn and Hollis, ‘The postulate that an agent is characterised by preferences rules out neither the saint nor Genghis Khan’ p.4).

 

  1. Then is it, or isn’t it, potentially confusing to speak of a preference (rather than just choice) ordering?  Cramp on Schelling on the struggle to choose, rationally, against immediate personal preference; Nagel on the possibility of altruism; and Sen on choosing from ‘commitment’, not just sympathy (‘commitment…drives a wedge between personal choice and personal welfare, and much of traditional economic theory relies on the identity of the two’). Case for using ‘meta-rankings’.

 

  1. Sen’s detailed examples: apple boys/Dugeon/orange-or-mango-garden party chair. [Also showing choice as ‘menu’ dependent, ‘chooser’ dependent, etc.]

 

  1. Hahn’s reply to Sen: trade-offs, ‘integrated personality’.  But also, sense of Hahn’s ‘a man knows what he wants’.

 

  1. How to resolve the possible ambiguity of ‘preference’?

 

    1. What the individual chooses as in Revealed Preference theory. (Sen: if also defined as making better-off, this is ‘definitional egoism’, on which even an altruist appears as an egoist.)
    2. What makes the individual better off (but which she/he may sometimes forego in choosing.)
    3. What the individual finds tempting at the time even though it would not make them better off and may not be chosen! (temptation resisted.)

 

  1. Are there problems in any of these interpretations?  Might choice and preference actually (always?) coincide after all if (e.g.) not choosing an altruistic action would undermine self-interest because of guilt (not just as a matter of definition)?  Or, does identifying choice and preference lead to a merging of the concepts of self-interest, commitment and altruism which implies a loss of language – mightn’t we want to be ale to distinguish acts that seem selfish and those that seem selfless?

 

  1. Draw your own conclusions…

 

(Dr. J G T Meeks)