Don't Have a Utility Function?

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An answer you don't want to give is that unless someone is perfectly rational, they don't have a utility function at all. For example, maybe if I ask you about a bunch of coin flips between dollar amounts, maybe that's something you have pretty good access to and can tell me about. And then I can figure out your utility function from that. Then I can then use your utility function when I advise you how to play poker or how to invest in the stock market. Those are much more complicated decisions that you don't have any intuitive preferences about.

Life is rich with moments of uncertainty, where we’re not exactly sure what’s going to happen next. We often find ourselves in situations where we have to choose between different kinds of uncertainty; maybe one option is very likely to have a “pretty good” outcome, while another has some probability for “great” and some for “truly awful.” In such circumstances, what’s the rational way to choose? Is it rational to go to great lengths to avoid choices where the worst outcome is very bad? Lara Buchak argues that it is, thereby expanding and generalizing the usual rules of rational choice in conditions of risk.

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Lara Buchak received a Ph.D. in philosophy from Princeton University. She is currently a professor of philosophy at Princeton. Her research interests include decision theory, social choice theory, epistemology, ethics, and the philosophy of religion. She was the inaugural winner of the Alvin Plantinga Prize of the American Philosophical Association. Her book Risk and Rationality proposes a new way of dealing with risk in rational-choice theory.

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