Continuity and catastrophic risk

Stefánsson, H. Orri | 2021

Economics & Philosophy

Abstract

Suppose that a decision-maker’s aim, under certainty, is to maximize some continuous value, such as lifetime income or continuous social welfare. Can such a decision-maker rationally satisfy what has been called ‘continuity for easy cases’ while at the same time satisfying what seems to be a widespread intuition against the full-blown continuity axiom of expected utility theory? In this note I argue that the answer is ‘no’: given transitivity and a weak trade-off principle, continuity for easy cases violates the anti-continuity intuition. I end the note by exploring an even weaker continuity condition that is consistent with the aforementioned intuition.

Abstract

Suppose that a decision-maker’s aim, under certainty, is to maximize some continuous value, such as lifetime income or continuous social welfare. Can such a decision-maker rationally satisfy what has been called ‘continuity for easy cases’ while at the same time satisfying what seems to be a widespread intuition against the full-blown continuity axiom of expected utility theory? In this note I argue that the answer is ‘no’: given transitivity and a weak trade-off principle, continuity for easy cases violates the anti-continuity intuition. I end the note by exploring an even weaker continuity condition that is consistent with the aforementioned intuition.