The Mind under the Axioms
Decision-Theory Beyond Revealed Preferences

Explores how recent formal advances in decision theory can inform and integrate new behavioral economics research and experimentation

Sacha Bourgeois-Gironde (Author)

9780128151310, Elsevier Science

Paperback, published 19 September 2019

216 pages
22.9 x 15.1 x 1.5 cm, 0.34 kg

"Bourgeois-Gironde does not attempt to produce a comprehensive review of applications of the axioms to experiments, but instead goes deep into three cases. Bourgeois-Gironde has produced exemplary economic methodology here: rigorous, practical, and addressing live concerns in contemporary economics. His book addresses the integration of economics and psychology in a way that, unlike too much recent behavioral economics, does not simply opportunistically import concepts across the interdisciplinary frontier without carefully preparing them for deep integration into their new theoretical contexts. Experimental economists can use ideas from psychology without abandoning the axioms, and doing so is the road to finding relationships of enduring significance, as opposed to isolated behavioral ephemera." --Oeconomia

The Mind under the Axioms reviews two basic ingredients of our understanding of human decisions – conative aspects (preferences) and cognitive aspects (beliefs). These ingredients are axiomatized in modern decision theory in the view to obtain a formally and empirically tractable representation of the decision-maker. The main issue developed in this book is the connection between realistic and testable psychological features and the descriptive component of abstract axioms of rationality. It addresses three main topics for which the interaction between axiomatization and psychology leads to potential new developments in experimental decision-theory and puts strictures on the standard revealed preference methodology prevailing in that field. The possibility of a cardinal representation of preferences is discussed. Different ways of accounting for incomplete preferences, and in which sense, are analysed. Finally, the conditions of separability between preferences and beliefs, such as prescribed by axioms of state-independence, are submitted to actual and potential tests. The book offers a bridge between the disciplines of decision-theory, psychology, and neuroeconomics. It is thus relevant for those, in psychology and cognitive sciences, who are sometimes put off by the high degree of formalism and abstraction in decision-theory, that seems to lie beyond the reach of psychological realism. It also aims to convince those in decision-theory for whom psychological realism and empirical testability should not constrain the modelling enterprise that conceptual clarification can come from attempted experimentation.

1. Cardinalism2. Incompleteness3. State-dependence4. A Conclusive Remark: Decision Theory and the Transistion from the Unconscious to the Conscious

Subject Areas: Business mathematics & systems [KJQ]