Kaleidic Society

Is regret compatible with Praxeology?

Aristotle, upon whom Menger based some of his ideas, believed in the concept of akrasia. Akratic action is action that is known to be against an agent's own interests, but is pursued regardless. This is obviously incompatible with any rational choice-based theory of action, since the agent is purposely acting irrationally. An example is the drunk who knows his alcohol addiction is harmful and regrets his problem, yet continues drinking. Is this a problem for a realistic economic theory based on the assumed rationality of economic agents?

One first step to deal with this problem is relaxing the standard of rational action to the Misesian notion of purposeful action. This does not solve the problem fully. In this case, we can understand the agent as having two opposing beliefs about the usefulness of their action. The agent only acts on one of these beliefs, leading to feelings of regret from the other. However, this leads to a new problem: why would an agent choose only to pay attention to an inferior belief?

Elster attempts to solve this problem by positing a rapid change in time preference of the agent during the akratic act. When the actor soberly examines his options ahead of time, he may choose X over Y. However, when confronted with the imminent choice, he chooses Y due to a rapid increase in his discount rate. This solution does not provide an answer to the deeper question of why the agent would feel regret simultaneous with the action. It seems that the only way out of this puzzle is to admit that this increased discount rate is caused by a weakness of will, perhaps due to impulsiveness. The actor knows that his choice is problematic, yet is unable to impede the force of his passions. This is not incompatible with any Misesian theory of choice, since praxeology makes no claims about the motivations of an action.

 

Posted: Mon, Jul 13 2009 11:15 AM by ziragt | with 3 comment(s) |

Comments

martinf said:

Good thoughts. Praxeology doesn't deal with WHY someone chooses A instead of B. How passions, impulsiveness, and all that determine action is important, but that might be the role of psychology, not of praxeology.

# July 14, 2009 7:07 AM

zefreak said:

"However, this leads to a new problem: why would an agent choose only to pay attention to an inferior belief?"

This is why Mises regarded preference to be demonstrated through action. The agent is truly not choosing an "inferior" belief, if by that you mean one situated lower on his value scale. He is unable to resist drink because no matter how much part of him wishes to stop for future benefits, it does not meet or exceed his desire to quell the impulse necessitating drink. If you were to ask him, he would say he is doing it against his own will, and against all reason. He may not be lying, he may be engaging in "magical thinking". This is why you must determine value and preference through action.

# July 29, 2009 12:08 PM

Christopher said:

This is a great post. Being relatively new to the extreme depths of Austrian thinking, please excuse me if my comment comes off as unintelligible or too simplistic. However, is the answer as simple as saying that though one may regret their decision in the long run, the initial choice is between the action (perceived as quenching a desire, and thus making momentary life better) and inaction (perceived as maintaining some sort of status quo and hence not making life better)? Is not the whole basis behind human action that man acts to satisfy a desire which he believes will make his life better at that given point? And given that, no action can be considered irrational because it was rational at the time the decision was made? If that is the correct way to look at it, then regret is an unfortunate byproduct of acting, inevitable and real.

# August 24, 2009 9:19 PM