2008/01/01 by Joseph B. Kadane, Mark Schervish, Mark J. Schervish +1 · 4 citations
Business, Management and Accounting · Decision Sciences · #Islamic Finance and Banking Studies #Decision-Making and Behavioral Economics
paper · doi:10.5840/jphil200810518
``...where ignorance is bliss, 'tis folly to be wise.'' Thomas Gray\nIf ignorance were bliss, there is information you would pay not to have. Hence the question is whether a rationally-behaving agent would ever do such a thing. This paper demonstrates that A Bayesian agent with a proper, countably additive prior never maximizes utility by paying not to see cost-free data. The definition of ``cost-free'' is delicate, and requires explanation. A Bayesian agent with a finitely additive prior, or an improper prior, however, might pay not to see cost-free data. An agent following a gamma-minimax strategy might also do so. An agent following the strategies of E-admissibility recommended by Levi and of maximality recommended by Sen and Walley, might also do so. \nA discussion follows about how damaging to a decision theory intended to be rational it might be to pay not to receive cost-free information.