Ambiguity and the Engineering of Choice

Abstract

Rational choice involves two kinds of guesses: guesses about future consequences of current actions, and guesses about future preferences for those consequences (Savage, 1954; Thompson, 1967). We try to imagine what will happen in the future as a result of our actions and how we shall evaluate what will happen. Neither guess is necessarily easy. Anticipating future consequences of present decisions is often subject to substantial error; anticipating future preferences is often confusing. Theories of rational choice are primarily theories of these two guesses and how we deal with their complications. Theories of choice under uncertainty emphasize the complicjations of guessing future consequences; theories of choice under conflict or ambiguity emphasize the complications of guessing future preferences.