Fairness, ambiguity and dynamic consistency

Bradley, Richard ORCID: 0000-0003-2184-7844 and Stefansson, H. Orii (2024) Fairness, ambiguity and dynamic consistency. Theory and Decision. ISSN 0040-5833 (In Press)

Text (Fairness chances and dynamic consistency (revised) (002)) - Accepted Version Pending embargo until 1 January 2100. Download (483kB)

Abstract

Considerations of dynamic inconsistency have figured prominently in debates over the rationality of preferences that violate the separability conditions characteristic of expected utility theory. These debates have mostly focused on risk- and ambiguity averse preferences, but analogous considerations apply to preferences for fairness. We revisit these debates in the context of a specific hypothesis regarding the violations of separability by such preferences, namely that they are potentially both explained and rationalised by attitudes to the chances of goods that motivate a preference for equality in the distribution of chances across people and possible events. Our main aim is to argue that, first, when these violations of static separability are motivated by such attitudes to chances, then they need not result in dynamically inconsistent behaviour. Second, and more generally, considerations of dynamic consistency do not, we argue, undermine the rationality of such attitudes towards the distribution of chances, despite the fact that such attitudes give rise to violations of the static separability assumptions of expected utility theory.

Item Type:	Article
Additional Information:	© 2024
Divisions:	Philosophy, Logic and Scientific Method
Subjects:	B Philosophy. Psychology. Religion > B Philosophy (General)
Date Deposited:	21 Nov 2024 11:15
Last Modified:	12 Dec 2024 04:35
URI:	http://eprints.lse.ac.uk/id/eprint/126120

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