I'd flip that around. Whatever action you end up choosing reveals what you think has highest utility, according to the information and utility function you have at the time. It's almost a definition of what utility is - if you consistently make choices that rank lower according to what you think your utility function is, then your model of your utility function is wrong.

If the utility function you think you have prefers B over A, and you prefer A over B, then there's some fact that's missing from the utility function you think you have (probably related to... (read more)

I sometimes have the same intuition as banx. You're right that the problem is not in the choice, but in the utility function and it most likely stems from thinking about utility as money.

Lets examine the previous example and make it into money (dollars): -100 [dollars] with 99.9% chance and +10,000 [dollars] with 0.1% vs 100% chance at +1 [dollar]

When doing the math, you have to take into future consequences as well. For example, if you knew you would be offered 100 loaded bets with an expected payoff of $0.50 in the future, each of which only cost you ... (read more)

Open thread, January 25- February 1

by NancyLebovitz 1 min read25th Jan 2014318 comments

8


If it's worth saying, but not worth its own post (even in Discussion), then it goes here.