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Weakness of will. The limitations of revealed preference theory

March 2022
Acta Oeconomica 72(1):1-23

March 2022
72(1):1-23

DOI:10.1556/032.2022.00001

Authors:

Wroclaw University of Economics and Business

The phenomenon of weakness of will – not doing what we perceive as the best action – is not recognized by neoclassical economics due to the axiomatic assumptions of the revealed preference theory (RPT) that people do what is best for them. However, present bias shows that people have different preferences over time. As they cannot be compared by the utility measurements, economists need to normatively decide between selves (short- versus long-term preferences). A problem is that neoclassical economists perceive RPT as value-free and incorporate present bias within the economic framework. The axiomatic assumption that people do what is best for them leads to theoretical and practical dilemmas. This work examines weakness of will to resolve some shortcomings of RPT. The concept of intention is used to provide multiple self conception with the framework to decide between selves, which had not been done before. The paper concludes that individuals should not always follow their revealed preferences (desires) but the intentions (reason) because the latter indicates what people really want.

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Weakness of will. The limitations of revealed

preference theory

ALEKSANDER OSTAPIUKp

Wroclaw University of Economics and Business, ul. Komandorska 118/120, 53-345, Wrocław, Poland

Received: April 7, 2020 •Revised manuscript received: November 4, 2020 •Accepted: November 27, 2020

ABSTRACT

The phenomenon of weakness of will –not doing what we perceive as the best action –is not recognized by

neoclassical economics due to the axiomatic assumptions of the revealed preference theory (RPT) that

people do what is best for them. However, present bias shows that people have different preferences over

time. As they cannot be compared by the utility measurements, economists need to normatively decide

between selves (short- versus long-term preferences). A problem is that neoclassical economists perceive

RPT as value-free and incorporate present bias within the economic framework. The axiomatic assumption

that people do what is best for them leads to theoretical and practical dilemmas. This work examines

weakness of will to resolve some shortcomings of RPT. The concept of intention is used to provide multiple

self conception with the framework to decide between selves, which had not been done before. The paper

concludes that individuals should not always follow their revealed preferences (desires) but the intentions

(reason) because the latter indicates what people really want.

KEYWORDS

weakness of will, revealed preference theory, choice over time, present bias, multiple selves

JEL CLASSIFICATION INDICES

B20, B40, D15

1. INTRODUCTION

Neoclassical economists cannot accept the existence of weakness of will, which leads to many

problems. To know why they cannot accept this phenomenon, a brief history of economic

thoughts is presented in this paper and the axiomatic assumptions of the revealed preference

pCorresponding author. E-mail: aleksander.ostapiuk@gmail.com

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theory (RPT) are indicated. One of them –preference consistency –is especially important for

weakness of will because it occurs mainly when people choose between the present and the

future (Ainslie 1975,2001). Neoclassical economists argued that individuals compare their

choices over time by utility measurements and choose the best option (Samuelson 1937). These

axiomatic assumptions mean that people never experience weakness of will because they stick to

their preferences over time and choose what they want.

These assumptions are not realistic due to hyperbolic discounting, which shows that pref-

erences are not consistent over time. Moreover, the comparison of intertemporal choices by

utility measurements, as done in neoclassical economics, seems very problematic as utility is

relative. Therefore, some authors argue that we do not have one self with well-defined prefer-

ences but multiple selves with different preferences that clash. This was illustrated by the pre-

commitment strategies (Schelling 1980,1984).

Although present bias demonstrates that the discounted utility model used by neoclassical

economists is unrealistic, it is not sufficient to dismiss RPT because hyperbolic discounting can

be incorporated into economic models. However, this maneuver does not resolve the problems

faced in economics, which is proven by the limitations of RPT. These are presented in the case of

the axiomatic assumption that agents choose what is best for them, which explicitly dismisses

weakness of will. It is argued that this assumption leads to two crucial problems for economics:

first, instrumental rationality, where means and not ends are important, leads to a tautology;

second, revealed preferences are not always a good indicator of well-being. This paper analyzes

weakness of will to check if it can help economics to address the above-mentioned issues.

This article does not aim to resolve the long and complicated discussion on weakness of will,

but to provide economists with a framework to decide which self should be in control, “long-

term”or “short-term”? This had not been done successfully by the previous supporters of

multiple self-conception, and hence, it did not gain popularity in economics (exception: Davis

2003,2010). Holton’s method of differentiating intentions from desires is used to propose this

framework (Holton 1999,2003). It is argued that intentions point out what the real preferences

of an individual are contrary to the revealed choices that frequently result from desires. The

conception of intention is also used to provide precommitment strategies (Schelling 1980,1984)

with a conceptual framework, and to support “long-term human”who is guided by reason and

long-term preferences. In addition, it shows that neoclassical economists should distance

themselves from their conception of utility which is always maximized and can mean anything.

Moreover, values should be distinguished from utility because the distinction made within the

utility framework does not work in the case of choices over time. This is demonstrated by Mill’s

(1863) unsuccessful attempt to save utilitarianism.

Although we used a method to distinguish intentions from desires and precommitment

strategies had identified what the real preferences of individuals are, it would not be enough to

justify why individuals should follow intentions and long-term preferences. The discussion

between Kant and Hume, and the insights from the contemporary philosophers like Dworkin

(1988) and Frankfurt (1971,1988) indicate that individuals should follow their intentions/

commitments and not emotions/desires because only the former supports autonomy and

freedom.

Before starting our analysis, it is necessary to clarify the following. This paper focuses on

traditional RPT (Samuelson 1938) which is still used by the neoclassical economists. According

to RPT, choices are synonymous with preferences and economists are not interested in why

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people choose something. Furthermore, goals are not assessed. It is assumed that people do what

is best for them, and rationality is deﬁned by technical criteria (consistency and completeness of

preferences). In general, RPT is perceived as value-free by the neoclassical economists (Gul –

Pesendorfer 2008). Of course, RPT and rational choice theory have been criticized for many

years from various perspectives (Sen 1973,1977,1993;Hausman 2008,2012;Herfeld 2020).

Moreover, currently, there is no single and universal conception of RPT, and many different

brands are available (Hands 2013). Here, we focus on the traditional RPT (Samuelson 1938).

Despite its age and being an object of constant criticism, RPT seems to be the main approach

used by the neoclassical economists which shows their methodological stance (Hands 2013,

2015;Angner 2018). Moreover, we discuss Samuelson’s RPT because our goal is to propose the

enriched version of multiple self (Schelling 1980,1984;Elster 1987), which was designed in the

context of traditional RPT.

Last but not least, although the paper underlines some limitations of RPT, it does not

indicate that the theory should be thrown away. Economists have good reasons to use it and

have been using it successfully over the years. This paper aims to show the limitations of RPT in

the case of weakness of will and proposes a framework that can address some problems con-

cerning choices over time. It can be argued that the contemporary RPT addresses some of the

theory’s shortcomings concerning the behavioural foundations (Ross 2005;Hands 2013;Hedoin

2016). However, the normative context of multiple self and agency, which is the main theme of

this paper, has not been fully addressed by the contemporary versions of RPT (Hedoin 2016).

2. THE ORIGINS OF REVEALED PREFERENCE THEORY

Neoclassical economics emerged at the beginning of the 20th century. Economists wanted it to

be as objective and clear as the hard sciences such as mathematics and physics, and therefore,

dismissed psychology and perceived normative approaches as unscientific. The path toward

objectivity ended with RPT. Thanks to its axiomatic assumptions, RPT always works. We briefly

analyze this process to explain why weakness of will does not have a place in neoclassical

economics.

The most important person in this process was Lionel Robbins. From our perspective, the

primary conclusion from his essay (Robbins 1932) is that economics should not deal with ethics

or human goals because normative theories are unscientiﬁc. Robbins was inﬂuenced by logical

positivism which assumes that ethical statements do not express logical propositions but

emotional attitudes. He indicated the difference between ethics and economics as follows:

“Economics deals with ascertainable facts; ethics with valuations and obligations. The two ﬁelds

of inquiry are not on the same plane of discourse”(Robbins 1932: 148). Due to logical posi-

tivism, all value judgments were put into one bag of nonsenses which cannot be rationally

discussed. Therefore, Robbins wanted to distinguish economics from ethics and argued that

“economic analysis is wertfrei (value-free)”(Robbins 1932: 91).

The next reason behind formulating neoclassical economics as a value-free science is

removing psychology from economics, a process which took place at the beginning of the 20th

century and is called “Pareto turn.”Many economists, including Bruni –Sugden (2007),

comprehensively explained how it was done. Hence, only the main factors of this process are

described here. Initially, marginalists believed in cardinal utility which allows assessing and

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comparing utility. However, they could not ﬁnd a convincing method to measure utility which

attracted criticism (Robbins 1932). Psychological hedonism quickly lost intellectual credibility,

and it was evident to marginalists that they had to reform its theoretical foundations. Cardinal

utility with the belief that it is possible to assess utility was untenable. Therefore, economists

started to use ordinal utility in which consumers only rank their preferences. The inability to

assess utility resulted not only in a new ordinal utility approach, but also, in escaping from a

debate about human goals. It was thought that happiness is too elusive, and economists should

not discuss it.

This escape from psychology and hedonistic foundation ended with the development of RPT

by Samuelson. Logical positivism was again the main inspiration for economics. Samuelson

(1938) tried to base the consumer choice theory on strictly observable foundations. The purpose

of his approach was not to “reveal”preferences but to create a strictly operational theory of

consumer choice in which preferences or utility do not matter at all. He promised to remove the

last “vestigial traces of the utility concept”(Samuelson 1938: 61) from the consumer choice

theory.

Moreover, Samuelson was not interested in explaining (why people choose something)

but instead wanted to describe the world, for which he needed a method of measurement, and

therefore, based his model on the observable terms and consequences.

The main purpose of RPT was practical. We need to have observable and measurable data

for building a theory. We cannot observe preferences directly and can only look at the act of

choice. Samuelson based his theory on this assumption. According to his theory, choices are

consistent if they satisfy the “weak axiom of revealed preference”(WARP), which means that if x

is revealed to be preferred to y, then ymust not be revealed to be preferred to x. If choices satisfy

the consistency conditions, we can construct a complete, transitive and continuous revealed-

preference ordering (Sen 1973).

One of the most important features of RPT is its particular perception of rationality. It states

that agents are rational when they act in accordance with WARP. Therefore, rationality is

instrumental because economists do not want to know about people’s motivations. Neoclassical

economists are solely interested in the results but not in the causes of a behaviour. They stopped

being interested in human motivations and assumed a priori that people are always rational and

maximize their utility. However, their utility is different from Bentham’s or marginalists’.

Sometimes, economists speak about individuals aiming to maximize utility. However, this does

not mean that utility is perceived as an ultimately good thing. To be a utility maximizer is to

choose only what one prefers. To say that agents maximize their utility implies nothing about

the nature of their preferences; rather, it only connects preference and choice. Rational in-

dividuals rank available alternatives and choose what they prefer the most (Hausman 1992).

Samuelson greatly influenced neoclassical economics, which instrumentally perceives ra-

tionality, has no interest in human motivations, and axiomatically assumes that choice “reveals”

preferences. Thanks to the axiomatic assumptions of RPT, economics does not need to be

entangled with a normative investigation of the goals (Gul –Pesendorfer 2008). Due to this

reason, the conception of weakness of will, which assumes that people sometimes do not do

what they want, cannot be accepted by neoclassical economists who use RPT to this day.

In the 1950s, however, it was obvious that this theory was not different from the ordinal approach (Wong 2006:73–74,

or Hands 2014).

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3. CHOICES OVER TIME. HYPERBOLIC DISCOUNTING AND REVEALED

PREFERENCE THEORY

As was indicated earlier, RPT and rational choice theory have many limitations and have been

widely criticized (Herfeld 2020). One issue that is essential from the perspective of this article is

that the assumption of preference consistency is problematic when it comes to choices over time.

In contrast to the neoclassical assumptions, individuals’behaviours do not always remain

consistent. Therefore, neoclassical economists have limited ability to analyze and explain

intertemporal choices that do not adhere to WARP. They are indeed focused on the moment

where preferences are revealed through choice. However, the neoclassical economists knew that

choices at present and in the future differ from each other signiﬁcantly. Stanely Jevons wrote:

“To secure a maximum of beneﬁt in life, all future events, all future pleasures or pains, should act

upon us with the same force as if they were present [...] But no human mind is constituted in this

perfect way: a future feeling is always less inﬂuential than a present one.”(Jevons 1911:72–73)

Economists have tried to resolve the problem of differences in choices over time. For

instance, they have acknowledged that the present choices are valued more than the later ones,

and hence, they discount future utility. Samuelson (1937) introduced the discounted utility

model. In neoclassical economics, individuals are presumed to assess utility that would be

received in the future. In his paper, Samuelson pointed out some possible problems related to his

model that he calls “serious limitations”(1937: 159). One of his concerns was whether people

discount the future at rates that vary over time; for instance, they may change their minds as

time moves forward. It bothered Samuelson that people might display time-inconsistent pref-

erences. He was aware that such behaviours exist, e.g., people purchase total life insurance as

a compulsory savings measure. However, he did not investigate the problems regarding

inconsistency further. Economists followed his suit, and the discounted utility model became

a standard of intertemporal choice (Thaler 2015: 101). It is not surprising that with time,

economics dealt with an increasing number of cases, which showed that individuals cannot

discount future utility according to an exponential rate resulting from the present bias. In fact,

people try to discount future utility but frequently fail to predict what will improve their

well-being (Gilbert 2007). Moreover, the complications with discounting utility are not only

ordinary anomalies, but also, indicate a systematic problem which suggests that the foundations

of economic human –stable preference –cannot be fulﬁlled.

One of the problems with evaluating the future is present bias, which is one of the main

reasons for hyperbolic discounting (Ainslie 1975,2001;Loewenstein –Elster 1992;O’Donoghue

–Rabin 1999). Present bias can be illustrated with the following example. If people are asked to

choose 100$ in 30 days or 105$ in 31 days, the majority will choose the second option. However,

if they choose between 100$ today and 105$ tomorrow, almost everyone will pick the ﬁrst

option. The difference between the choices is not a problem for economics because the dis-

counted utility model assumes that the future is less important than the present (Samuelson

1937). Therefore, waiting one day after 30 days to get 5$ is easier than waiting one day from

today. However, as it turns out, people do not discount the future according to an exponential

rate. They opt for 105$ in 31 days, but when the 30th day passes and they have to choose

between 100$ now and 105$ tomorrow, they will switch their preference to 100$. This behaviour

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is inconsistent with the long-term preferences and means that individuals over-value their

present choices. All along, they want some choice more than the other but when selection arrives

their preferences change. For neoclassical economics, present bias is not a problem because at

the end individuals make choices and their cognitive biases are the reason why rationality is not

perfect (people optimize). The issue here is that neoclassical economists axiomatically assume

that people do what is best for them. We will discuss the problems resulting from this approach

later.

Economists were not interested in time inconsistency until the 1980s, except for Strotz

(1955). George Ainslie, a psychologist, introduced the idea of hyperbolic discounting (1975).

Thaler –Shefrin (1981) implemented this idea in economics. It gained credibility with time, and

economists had to admit that hyperbolic discounting is a common feature of human behaviour.

However, economists dealt with inconsistent time preferences in a speciﬁc way. They created

models where choices over time are compared by utility measurements considering hyperbolic

discounting among other manifestations of bounded rationality such as, self-control, tempta-

tion, dual-self, and so on (Laibson 1997;O’Donoghue –Rabin 1999,2001;Gul –Pesendorfer

2001,2004;Loewenstein –O’Donoghue 2004;Fudenberg –Levine 2006,2012;Andreoni –

Sprenger 2012;Cohen et al. 2020; for an overview: Ericson –Laibson 2019). The process by

which these models work will not be elaborated because they encounter similar problems as the

static models (discounted utility model) which will be analyzed in the next section.

However, it is necessary to provide a few words of explanation. Most of the above-mentioned

models incorporate choices over time within the utilitarian framework which allows comparing

them. The next section objects to this idea and indicates that economists need to normatively

distinguish different selves with separate preferences. Moreover, the example of Becker –

Murphy (1988) of the rational addict is presented to show that the utilitarian framework can be

used to support the assumption of RPT that people always choose what is best for them. Of

course, the models taking hyperbolic discounting into consideration improve economics.

However, most of them do not deal with RPT’s foundations (relativity of utility and weakness of

will). The next sections argue that RPT is not value-free and has implications for people’s well-

being. Therefore, whether they want or not, economists decide what is good for people. This

position is strongly contested by many who are reluctant toward behavioural welfare economics

where consumers’autonomy is questioned (Gul –Pesendorfer 2008;Sugden 2018). It is thus

necessary to present why weakness of will is real and how one can know people’s real prefer-

ences if one does not rely on people’s choices.

4. CHOICES OVER TIME AND UTILITY MEASUREMENTS

Hyperbolic discounting indicates that the assumption of consistent preferences over time is

unrealistic. This argument was used to introduce the conception of multiple self into economics,

which was done by Schelling (1980,1984) and Elster (1987). They argued that the hyperbolic

discounting makes it impossible to compare choices over time by utility measurements.

Therefore, we cannot indicate a simple, enduring self but should distinguish multiple selves with

different preferences. Moreover, the conﬂict between long- and short-term preferences is

observed frequently. Schelling addresses this with the example of a precommitment strategy in

which people deliberately restrict their freedom because they do not want to succumb to a short-

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time temptation. This was illustrated by Ulysses, who ordered his crew to tie him to the mast so

that he could listen to the sirens’song without falling under their spell (Elster 1987). Schelling

considers this behaviour as really disturbing when he refers it to neoclassical economics and

RPT. He indicates that people frequently choose between long-term goals and short-term

pleasures, and sometimes, curb their freedom to achieve the former. For example, we do not

want anyone to give us a car’s keys when we are drunk or a cigarette when we are trying to quit

smoking (Schelling 1984).

According to Schelling, the problem here is not that these situations exist, but a question of

which self should be in control: the self that has long-term preferences or that which falls into

the temptation? He uses the example of Captain Ahab from Moby Dick, who lost his leg because

of a bad wound:

“The blacksmith enters with a hot iron to cauterize the stump. Ahab begs not to be burned. The

crewmen hold him down as he spews out the apple in a scream, and steam rises where the iron is

tormenting his leg. The movie resumes with Ahab out of pain and apparently glad to be alive.”

(Schelling 1984:9)

At first, Schelling treats this example as an easy situation. We get much utility in exchange

for our limited freedom –life in exchange for a short but very intensified moment of pain. Later,

however, he notes that even if Ahab asked the smith to cauterize his wound and even if he felt

grateful for the operation was performed upon him, it would not mean that this was the best

decision that gave him the greatest utility. Schelling writes, “If you burn me so that I may live I’ll

thank you, afterward, but that is because I’ll be feeling no pain and not anticipating any when I

thank you”(1984: 9). He concludes by saying, “How do we know whether an hour of extreme

pain is more than life is worth? [...] The conclusion that I reach is that I do not know, not for

you and not for me”(1984: 9).

Schelling stated that it is impossible to assess which choice is better if only utility is

considered because every moment is different. Thus, he reached a similar conclusion to neo-

classical economics. It is not possible to compare choices in terms of cardinal utility as utility is

relative. As far as neoclassical economics is concerned, it is thought that if we cannot assess

whether some action gives more utility than others, we axiomatically assume that people are

rational and always maximize their utility. If we did not assume that, RPT would not work.

Schelling comes to another conclusion that it is impossible to compare utility over time because

“Each self is a set of values [...] on the particular issues on which they differ fundamentally

there doesn’t seem to be any way to compare their utility increments and to determine which

behaviour maximizes their collective utility.”(Schelling 1984: 8).

We cannot use the utility measurements because human beings have two different selves

with different preferences. Thus, these selves should be handled separately by economics.

Schelling did not want to decide which of these two are more important as their utilities cannot

be compared. However, this relativity is not a problem because “Sometimes, but not always, it is

easy to know which is Dr. Jekyll and which is Mr. Hyde”(Schelling 1980: 98). We do not want to

be a person who drinks and becomes vicious or someone who goes to a casino to have fun and

loses all her money (Schelling 1980).

Schelling was aware that he did not have a rigid framework to decide which self is more

important: “Anyone who is happily addicted to nicotine, benzedrine, valium, chocolate, heroin,

or horse racing, and anyone unhappily addicted who would not elect the pains and deprivations

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of withdrawal, are not my subject”(Schelling 1984: 4). However, he made a subtle distinction

which helped him to justify a choice “I am not concerned with whether cigarettes or rich

desserts are bad for you, only with the fact that there are people who wish so badly to avoid them

that, if they could, they would put those commodities beyond their own reach”(Schelling 1984:

4–5).

Even though Schelling did not want to choose, it can be seen from the last quotation that in the

end, he chooses reason and the long-term human over a person focused at the present moment.

His slight emphasis on people who succumb to temptations against their better judgment is

known as akrasia or weakness of will.

Neoclassical economists do not recognize akrasia because

they assume that people do what is best for them (following RPT). Thaler (1980) discussed why

neoclassical economics resists the existence of akrasia. In the 1970s, he organized a supper for his

co-workers from Chicago, known for their orthodox approach in which people are assumed to be

fully rational. Thaler prepared a bowl of cashews for the guests to whet their appetite before

supper. In a short time, it appeared that the guests too often reached for the snack, so Thaler took

away the bowl as he did not want the guests to overeat before supper. His decision was met with

the guests’approval. They wanted to eat only a few cashews, but they gave into temptation and ate

more. Their approval does not make sense from the perspective of neoclassical economics because

people are rational and know what is best for them. Therefore, having more choices is better

because individuals can ﬁnd a more preferable one. Thaler presents a hypothetical conversation

between homo oeconomicus (ECON) and a human being about this topic:

ECON: Why did you remove the cashews?

HUMAN: Because I did not want to eat any more of them.

ECON: If you did not want to eat any more nuts, then why go to the trouble of removing them? You

could have simply acted on your preferences and stopped eating.

HUMAN: I removed the bowl because if the nuts were still available, I would have eaten more.

ECON: In that case, you prefer to eat more cashews, so removing them was stupid.

(Thaler 2015:94–5)

This discussion leads nowhere. Neoclassical economics cannot admit that weakness of will

exists because it would mean the dismissal of RPT where choice is synonymous with preference.

5. PROBLEMS WITH REVEALED PREFERENCE THEORY

The most substantial problem from the perspective of this article is not that RPT is descriptively

inaccurate. For neoclassical economics, it is not an issue (Gul –Pesendorfer 2008), and the more

important problem is the tautologicality of utility and rationality in which no available data can

refute the theory that people maximize their utility and behave rationally (Sen 1977;Boland

1981;Hodgson 2012;Ostapiuk 2020). The same problem is indicated in this paper, but the main

For now, both terms are used interchangeably, even though some philosophers make distinction between them (e.g.,

Holton 1999). The reason for this simpliﬁcation is to ensure clarity for the readers who do not need to be entangled in

philosophical discussion at this point.

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focus is on choices over time and weakness of will. This is shown using the Theory of Rational

Addiction, in which Becker –Murphy (1988: 675) claim: “that addictions, even strong ones, are

usually rational in the sense of involving forward-looking maximization with stable preferences.”

Drugs is a topic where they push the rational choice theory to its logical extreme. The article

indicates that addicted people are not irrational, and their behaviours are not anomalous at all.

Moreover, Becker and Murphy argued that the use of drugs maximizes an addict’s utility. This is

possible because instrumental rationality is used: “This paper relies on a weak concept of ra-

tionality that does not rule out strong discounts of future events. The consumers in our model

become more and more myopic as time preference for the present (a) gets larger”(Becker –

Murphy 1988: 683). This means that taking drugs is rational because the pleasure obtained from

heroin now is so immense that it overshadows the future costs. Therefore, the use of drugs can

maximize people’s utility. It looks strange that heroin addiction is rational if one looks at its

results. However, it is not a problem because Becker did not assume what is good or bad for

people. We just assume that people maximize their utility in the moment of choice. In the case of

drugs, people make decisions between present and future utility. Addicted people understand that

they are addicted. However, they choose to take drugs because the gains from taking them exceed

the costs of not taking them (e.g., ﬁghting with their addiction). Becker and Murphy assumed that

weakness of will (akrasia) does not occur and people compare their long-term goals (e.g., health)

with short-term pleasures (e.g., smoking). Economists do not know how people do it (they are

not interested in motivations). They just assume that people perform this cost-beneﬁt analysis.

Hence, economists can know about hyperbolic discounting and incorporate it into RPT.

The methodological belief in utility maximization is strong in the economic approach. Even

if people regret some decisions made at the spur of the moment, it does not mean that they do

not choose what they want.

“The claims of some heavy drinkers and smokers that they want to but cannot end their addictions

seem to us no different from the claims of single persons that they want to but are unable to marry or

from the claims of disorganized persons that they want to become better organized. What these

claims mean is that a person will make certain changes –for example, marry or stop smoking –

when he ﬁnds a way to raise long-term beneﬁts sufﬁciently above the short-term costs of adjust-

ment.”(Becker –Murphy 1988: 693)

According to Becker and Murphy, people’s declarations do not mean anything. If abstinence

from smoking gives one more utility than smoking, the person will quit cigarettes. Ultimately, in

economics, the deeds, not the words, matter the most.

The problem with this understanding of rationality and utility is that many examples

indicate when it is strange to assume that people do something because they really want it.

Following this logic, when we see how much pleasure one can obtain from using drugs, we are

forced to admit that it maximizes utility. However, the question is whether this understanding of

rationality and utility makes sense. In this approach, an ex-alcoholic who does not want to drink

because she knows where it might lead to is rational when she comes back to drinking. She does

not want to drink, and after going on a binge, she feels awful about her behaviour. Is it possible

to decide if the temporary need to relapse to alcohol is more important than long-term goals?

Becker and Murphy assume that people can integrate these conflicting motivations and bring

them down to a common utility denominator. This understanding of rationality gives rise to

some absurd conclusions:

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“Imagine the situation where, owing to the shipwreck a man lies on a small boat in the middle of

the ocean, and he thinks about drinking water from the sea. He knows that he should not drink

this water and it can only make him feel bad. Despite this knowledge, he succumbs to the

temptation and drinks it. He gets sick and dies afterwards. Is it reasonable to say that this person

behaves rationally? Is impulse, second utility enough to call some behavior rational?”(Ostapiuk

2019: 643)

The above examples raise the question if we should not distinguish between reason and

biological needs, as well as long-term goals and trivial pleasures. Instrumental rationality does

not differentiate between behaviours and can mean anything that leads to a tautology. Obvi-

ously, the previous examples are extreme; however, the resulting questions concern most human

actions. Individuals frequently choose between now and later. Consume now or save for later;

have fun now or work hard now and have more fun later. The neoclassical economists assume

that people always choose what is best for them, but it is hard to agree with this assumption

when we look at hyperbolic discounting and behavioural economics’ﬁndings (Frederick et al.

2002;Thaler 2015).

Neoclassical economics which axiomatically assumes that what people do is the best for them

leads not only to theoretical but also to real problems. The biggest among them is that many

economists treat RPT as a positive, not normative theory (Thaler 1980,2015).

As a result, many

perceive well-being in economics as a descriptive theory (Gul –Pesendorfer 2008). This is wrong

because there is no descriptive theory of well-being (Reiss 2013). It is impossible to discuss well-

being without making some value judgments. Many economists did not see that because they

used the formal and not the substantive theory of well-being which does not tell what is good

ultimately but tells how to ﬁnd what is good for people (Hausman –McPherson 2006). We

should just wait and see what people choose (revealed preferences). Reiss concludes that

“economists should not have substantive views about the conception of the good. But this is of

course to make a moral judgment and to subscribe to a particular theory of well-being: namely,

wellbeing is what people desire”(Reiss 2013: 214).

The concept of well-being based on revealed preferences is very problematic and has been

criticized over the last years. Behavioural economics and economics of happiness demonstrate

that people do not have stable preferences, and often, preferences are created “on the ﬂy”

(Hausman 2012: 134). Preferences are context-dependent (Kahneman –Tversky 1979), change

with time (Ainslie 1975), and are malleable (Brickman et al. 1978). Moreover, people have

cognitive biases that are not anomalies but common to human reasoning and judgmental

processes. Because of these ﬁndings, RPT, in the current form, seems not to be a good indicator

of well-being (Frey –Stutzer 2002;Bruni –Porta 2007;Frey 2008).

In order to make their model work and justify the assumptions that people choose what is

best for them, neoclassical economists had to idealize homo economicus who was perceived as

fully rational. Given the limitations of RPT, one might wonder why economists stick to this

descriptively inaccurate theory. Nowadays, many of them argue that neoclassical economics

always knew that people are not fully rational and that homo economicus is a necessary idealized

model of the economic agent, one which is psychologically unrealistic. However, it is not a

complete truth. Many economists created models based on the assumptions of full rationality

However, it is changing and more economists started to see RPT as a normative theory (Hands 2013).

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and used them in real life (Rodrik 2015;Thaler 2015). The article’s goal is not to blame the

economists. Its aim is to underline that the models perform reality, and sometimes, scientists can

perceive their models as reality (Callon 2006;Morgan 2012;Boldyrev –Svetlova 2016) which

was the case with homo oeconomicus.

This is illustrated by Modigliani (1966) who used the assumptions of neoclassical economics

(the discounted utility model) to deal with the choices over time. He based his model on an

individual’s total income. In his theory, ‘the life-cycle hypothesis, people are rational and are

presumed to make a plan when they are young about how to smooth their consumption over

their lifetime. The hypothesis assumes that people not only can make all calculations (with

rational expectations) about how long they will live, how much they will make, but also, possess

self-control to achieve the optimal plan. We can ﬁnd a similar idealization concerning choices

over time in the works of Friedman (1957) and Barro (1974).

The influence of RPT on reality is even greater. It is possible to make an analogy between

contemporary capitalism and RPT. Both assume that people are rational and always know what

is best for them. It is enough to give them options, and they will choose in accordance with their

autonomous preferences. This means that nobody should interfere with people’s choices (e.g.,

state) and negative freedom is enough (Friedman –Friedman 1980). Moreover, many econo-

mists believe that efﬁciency is value-free, which allows them to “conclude that, ceteris paribus,

perfectly competitive equilibria are morally desirable and market imperfections that interfere

with the achievement of competitive equilibria are morally undesirable”(Hausman –

McPherson 2006: 66)

Neoclassical economists can believe that they are objective scientists who do not decide what

is best for people. However, due to the present bias, neoclassical economics based on axiomatic

RPT unconsciously supports “short-term human”who frequently falls into temptation and

chooses simple pleasures and regrets it later. RPT provides economics with false objectivity

(assuming that what people do is the best for them is a normative claim) and has a negative

impact on the well-being of individuals.

6. POSSIBILITY OF WEAKNESS OF WILL

The situation, when somebody does something but wants to do something else, is common.

After making such a choice, we hear “I know it’s irrational, but....”. As was indicated before, it

poses a problem for neoclassical economics which assumes that people have consistent and well-

deﬁned preferences and choose what they want. However, it looks more like individuals often

have contradictory preferences. This violates the axioms of transitivity and completeness of

preferences (WARP). However, in real life, it is not always a problem. Sen writes, “There is

nothing particularly schizophrenic in saying: ‘I wish I had a vegetarian’s tastes, for I disapprove

of the killing of animals, but I ﬁnd vegetarian food so revolting that I can’t bear to eat it, so I eat

meat’” (1974: 378–379).

Sometimes, discussion about weakness of will relies on stories and anecdotes. In order to

properly answer the question whether weakness of will (akrasia) exists, we need to dig into the

Due to the paper’s limits, the analysis of hidden normativity in economics ends here, but it should be mentioned that

this topic has been attracting much attention in the last year (see Ostapiuk 2020).

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philosophical discussion. In general, akrasia is perceived as doing something against one’s better

judgment. So, we do something, and we know that it is not the best course of action for us to

take. Not only economists were perplexed about this possibility. Socrates denied the existence of

weakness of will in Protagoras.“No one,”he declared, “who either knows or believes that there is

another possible course of action, better than the one he is following, will ever continue on his

present course”(Plato 1961: 348). In the 20th century, Hare agreed with Socrates and argued

that if we evaluate something to be the best action for us then we must do it. This is because

evaluative judgments are connected with a prescription (Hare 1952,1963). Therefore, when one

judges that, the best action is to quit smoking, then she must quit smoking.

Often, we hear people say that they know that quitting smoking would be the best action, but

they cannot do it. For Hare, as well as for Socrates, it does not mean that weakness of will exists.

In this case, one cannot quit smoking because deep down one still wants to smoke and this is

one’s strongest desire. We can ﬁnd an analogy between this line of reasoning and neoclassical

economics. As was indicated before, for Becker, declarations do not mean anything; they are

only cheap talks. If one really wants to quit smoking, one will do it. Thanks to this line of

reasoning, present bias is not a problem in RPT. It is not treated as an irrational feature of

behaviour which proves that people do not do what they really want. They are just overpowered

by the present desires, and deep down, they want them. The tautological (axiomatic) con-

struction of neoclassical economics, in which rationality is perceived instrumentally, enables

economists to deny the existence of weakness of will and still be consistent. Despite the ap-

proaches where weakness of will is impossible by deﬁnition, for many people it is a real feeling. If

we always do what we want deep down, then how so many of us regret after choice? The

contemporary debate about this phenomenon was started anew by Davidson (1980).

Davidson thinks that weakness of will is possible and he is mostly known for defining akratic

action. In doing x, an agent acts akratic if and only if: (1) she does xintentionally; (2) she

believes that there is an alternative action yopen to him, and this guarantees that the action is

free; (3) she judges that, all things considered, it would be better to do ythan to do x(Davidson

1980). It is important to underline the phrase “all things considered.”It does not mean that if

one thinks that an apple is healthier than chips, it is one’s evaluation. Here, one only sticks to

one set of values (health) versus another (taste). “All things considered”means comparing a

different set of values.

Nowadays, most philosophers who are interested in the weakness of will agree with

Davidson that akratic action is not only possible but also actual, and a common feature of

people’s lives. Moreover, most philosophers admit that akrasia, if possible, must be irrational

(Stroud –Tappolet 2003). Here, it is crucial to underline the distinction between economics and

philosophy. As was indicated before, neoclassical economists treat rationality instrumentally,

whereas many philosophers treat it as something worth striving for. Moreover, neoclassical

economists focus on choices, whereas philosophers distinguish between belief and choice where

belief is beyond the revealed choice. The differences in the perception of rationality result in the

situation where philosophers attempt to deﬁne what rational behaviour might consist in, while

economists do not.

Some economists deﬁne rationality (e.g., ecological rationality by V. Smith, procedural rationality by H. Simon).

However, instrumental rationality dominates in economics (Berg-Gigerenzer 2010).

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With this short introduction, we can analyze whether akrasia is rational or not. As was stated

before, it refers to the behaviour where one chooses to do something that one believes not to be

the best option. The belief that a certain option is not a good thing to do is either rational for one

to hold or not. When it is not a rational belief to hold, then one is irrational in one’s belief. For

example, Martha is dissatisﬁed with her vacation in Spain and believes that she should have gone

to Italy instead. However, she is mistaken and the vacation in Italy would be much worse. Then,

her belief that Italy is a better place for a vacation is false and it is irrational to hold it. On the

other hand, if her belief that Italy is a better place for a vacation than Spain is true, then she has a

rational belief to hold. However, in this case, it cannot be rational for her to go to Spain.

Therefore, akrasia necessarily involves irrationality, either in her beliefs or in her choices

(Wedgwood 2003).

Although many philosophers agree that akrasia must be irrational, they argue whether it is

possible intentionally and freely to act against one’s better judgment. For example, Watson

(1977) argues that akratic action does not exist as acting against one’s better judgment is not

free. It is so because there is no clear difference between akrasia and compulsion in situations

when an agent is motivated by emotion or desires that one cannot resist. Watson considers two

possible explanations for why people fail to resist a desire that they do not want to have, and he

rejects both. People’s failure cannot be explained in terms of what they choose to do because a

choice must follow better judgment (Hare 1952,1963). In addition, it cannot be explained by an

insufﬁcient attempt to resist. If the action is free, we must assume that an agent can control

oneself, and here arises the question of why one did not try hard enough. Watson concludes that

the agent was unable to resist the rebellious desire, and in both cases, one’s action was unfree.

However, many philosophers argue that it is possible to distinguish between weak-willed and

compelled actions and Watson’s conclusion is controversial.

After setting the stage for weakness of will, we move to the most important goal of this paper

–providing a framework to decide between selves. Holton (1999,2003) argues for a position

similar to Schelling’s. According to Holton, weakness of will means that a certain kind of

intention –a resolution –was violated. The term “resolution”refers to a plan or intention one

has to hold in the face of potential temptations. Thus, we can identify resolution with pre-

commitment strategies. Holton thinks that “central to the idea of weakness of will is an over-

readiness to abandon one’s resolutions”(2003: 41). Therefore, we can know that people are

weak-willed when they try to ﬁght with some unwanted desires by sticking to their resolutions.

For example, Janet needs to study for the forthcoming exam, so she dismissed her friends’

proposal to go to the pub in the evening because she wants to study (resolution). However, after

30 min of studying, she is tired and watches a movie instead. In the end, she failed to study, but

at least she tried to do so and was able to dismiss her friends’invitation. According to Holton,

such behaviour indicates weakness of will.

Moreover, he makes a distinction between weakness of will (overriding one’s resolution) and

akratic action (overriding one’s judgment), which was criticized by some philosophers

(e.g., Mele 2010) but is very useful for this paper. Holton writes:

“Imagine someone who is convinced that all the arguments point the same way: he should give up

meat. Yet suppose he does not. He is, therefore, akratic. But is he weak-willed? That, I contend,

More discussion is provided in the works of Kennett (2001),Mele (2010) and Bermúdez (2018).

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depends on other factors. Has he repeatedly vowed to give up, only to ﬁnd himself succumbing time

and again in the face of rare steaks and slow-cooked offal? Or does he unblushingly afﬁrm while

conceding practical inconsistency that he has never had any intention of giving up, and never will?

In the ﬁrst case we surely would accuse him of weakness of will; in the second I think we would not.”

(Holton 2003: 52)

This distinction is the same as Schelling’s when he argued that we should help only those

who act against desires they do not want to have (by precommitment). Holton and Schelling

consider that it is not enough if one says that one does not want to smoke; one needs to try to

quit smoking. Otherwise, it can only be a cheap talk. The distinction between akrasia and

weakness of will is useful because in the case of akrasia we do not know whether somebody

really wants to quit smoking or only says so. When one acts against unwanted desires and forms

a resolution, it indicates that this person really wants something else. It also provides a better

framework than a vague one used by many behavioural economists who rely on New Year’s

resolution test where people’s declarations are treated as their real preferences (criticism: Rizzo

2016;Sugden 2018).

Holton uses the idea of resolution to explain why some philosophers could not accept that

weakness of will exists. This is because they use the Humean account (belief –desire account)

where all intentional actions are explained in terms of an agent’s beliefs and desires. The agent

simply acts on the strongest desire and resolutions are reducible to beliefs and desires (Holton

2003). Therefore, when someone tries to quit smoking but fails to do so, it means that deep

down one still wants to smoke. Intentions have the same value as desires because in the end

“reason is, and ought only to be the slave of the passions”(Hume 1896: 213). This reasoning is

very close to neoclassical economics due to instrumental rationality where preferences are given

and people satisfy them. Holton is a supporter of the “Augmented Humean account”(belief –

desire –intention account) where beliefs and desires are not deemed enough. He writes, “In-

tentions, of which resolutions are a species, should be seen as a third mental kind, irreducible to

the other two”(Holton 2003: 51). This approach works similarly to the Humean account in

terms of the end result. Therefore, “If a resolution is stronger than any contrary desires, the

agent will stick to it; if the contrary desires are stronger, then the agent will act on them instead”

(Holton 2003: 51). However, the qualitative difference between desires and intentions makes

weakness of will possible, and also, explains why people regret after following unwanted desires.

In the context of economics, in some cases, intentions can be perceived as people’s real pref-

erences.

It is necessary to make a qualitative distinction between desires and intentions in relation to

the intertemporal choices when we need to choose which self should decide normatively. This

cannot be done by utilitarian measurement which is used by the neoclassical economists where

desires and values are compared within the same framework as in the Humean account. The

limitations of this approach are visible in the example of Mill who tried to save utilitarianism

from criticism. He differentiated higher pleasures from the lower ones with regard to quality and

argued that “some kinds of pleasure are more desirable and more valuable than others”(Mill

1863: 11). However, people choose “lower”pleasures. Sometimes, they prefer lying on the couch

and watching comedy to reading Shakespeare. At ﬁrst sight, it contradicts Mill’s belief that

people want higher pleasures. He answers this criticism by explaining the difference between

human choosing in the short-term and the long-term perspective. People prefer lying on the

couch and watching a comedy because it gives them more pleasure; however, they value

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Shakespeare more. Mill considers that the true choice is in the long-term perspective. If

somebody asks people what they want to do in their whole life, the majority will choose

Shakespeare. Mill explains that we choose the “lower”pleasures even if we want the higher ones

as “occasionally, under the inﬂuence of temptation, postpone them to the lower”(Mill 1863: 14).

In other words, we know the difference between comedy and Shakespeare, but sometimes we

succumb to our weaknesses. We ﬁnd Hamlet a great play, not because it gives us the most

pleasure, but because it challenges us and makes us better.

In this context, Mill departed from utilitarianism where everything can be compared by one

all-encompassing notion of utility because he assumed that more worthy deeds exist. His credit

for the higher needs of humans leads to the problems of neoclassical economics which relies on

RPT. Economists do not like declarations because often they do not coincide with the observable

choices (Beshears et al. 2008). For example, when people are asked which programs they want to

watch on TV, they point out performances or theater, but they watch soap operas when it comes

to choose. However, it does not mean that people are hypocrites. As was stated earlier, weakness

of will results in situations when people do not achieve what they really want.

In order to choose what people should do, it is necessary to know the preferences that are

worth following. Many years ago, neoclassical economists abandoned this endeavour as they did

not want to be entangled in this normative discussion. However, due to the present bias, they do

not have the privilege not to choose between selves and people’s goals.

7. REASON VERSUS EMOTIONS

In the end, we can ask why people should follow commitments (reason) and not short-term

pleasures (emotions).

This assertion is controversial in neoclassical economics which aspires to

be value-free. Therefore, economists do not decide what is best for people and perceive ratio-

nality instrumentally. However, as was indicated earlier, this position is only seemingly value-

free. When economists do not decide what is best for people and assume that people choose

what is best for them, they support “short-term human.”Therefore, economists cannot escape

from choosing between selves (not choosing is also a choice, as Jean-Paul Sartre said). The

discussion in this section allows deciding which self should be in control: the self that follows

short-term pleasures or the one that has long-term goals? Of course, the topic of reason versus

emotions is too large to be analyzed thoroughly here. Therefore, we focus on autonomy and free

will in the context of neoclassical economics where these qualities are taken for granted because

economists presuppose the existence of individuals (Davis 1995,2003,2010).

One clarification is needed to explain why the discussion in this section is based on reason

versus emotion. In this article, desires are identified to some degree with preferences. In general,

economists perceive preferences as desires constrained by time and budget (Hausman 2012).

However, here we focus on short-term preferences which are very similar to desires because

people irrationally focus on the present moment. At some level, we can identify preferences with

desires as both are given and people cannot fully choose them.

The discussion between emotions and reason started with philosophy itself. We deal only

with Kant and Hume because they are essential for this paper. The first one is identified with

The author uses Plato’s famous dichotomy between reason and desires.

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reason and can be perceived as an unconscious supporter of goal-oriented economics in which

human goals and values are discussed. On the other hand, Hume makes a case for emotions and

can be perceived as the father of neoclassical economics which is value-free because it is not

entangled in the discussion on goals. Hume is a champion of instrumental rationality which is

also cherished by neoclassical economists. He writes, “reason is, and ought only to be the slave of

the passions”(1896: 283). According to him, passions in themselves cannot be called unrea-

sonable because:

“A passion must be accompany’d with some false judgment, in order to its being unreasonable; and

even then ‘tis not the passion, properly speaking, which is unreasonable, but the judgment [...]a

passion can never, in any sense, be call’d unreasonable, but when founded on a false supposition, or

when it chuses means insufﬁcient for the design’d end.”(Hume 1896: 284)

Hume means that for an act to be irrational, the desire which was a cause of the action must

be founded on a false belief or be ineffective (not to use proper means to achieve the end).

Therefore, we can say that a drunk is irrational not because he is drunk but because he drinks

apple juice instead of vodka. Effectiveness is the only way for neoclassical economics to judge if

some action is irrational or not.

In the instrumental view of rationality, the action is finally determined by psychological

states. Thus, an instrumental theory of choice presents a casual explanation of human action

which has the same structure as the explanation found in the natural sciences.

Kant understood

that we need to accept this approach in order to explain the choices made by people because

they are part of the physical world, and we need to perceive that their actions have physical

explanations (Sugden 1991). However, Kant thinks that when we reason we have to perceive

ourselves as autonomous. We must conceive ourselves as capable of forming beliefs and reach

conclusions that are not determined by external causes. Therefore, when people reason what

actions to take, they must perceive themselves as capable of determining their actions. This

account differs from neoclassical economics where self is a bundle of preferences that are given

and people just act upon them (Davis 1995). Kant argues that a reason has to regard itself as the

creator of its principles which are independent of the alien inﬂuences. From this perspective,

Humean passions and desires can be perceived as alien inﬂuences because it is impossible to

reason coherently about what to do when we think that our choices are fully determined by our

psychological states (economics as “closed system”;Lawson 1997). However, Kant’s goal is not

to prove that people are really autonomous. He argues that we cannot engage in any form of

reasoning without presupposing our autonomy.

The second feature of Kantian autonomy is that an autonomous individual is the one whose

actions are governed by the laws that one imposed on oneself. Kant agrees with Humean

instrumental rationality and perceives it as the source of hypothetical imperative (if you want to

achieve X, then do Z). However, there is another form of rationality which refers to categorical

imperatives (do X, regardless of your wants). From this perspective, a choice is rational if it is

prescribed by some principle which can be a universal law for all rational agents (Sugden 1991).

There is a qualitative difference between reason and instrumental rationality. In the end,

However, causal account in RPT is widely criticized (Ross 2005;Bimmore 2009;Gul –Pesendorfer 2008).

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Kantian categorical imperative cannot be embraced by the traditional economic framework. The

limitations of RPT in the case of ethics have been presented by White (2011).

According to Kant, reason is strictly connected with freedom and autonomy. Why can

emotions not be perceived in the same way? Can we even assess whether emotions are rational

or irrational?

A negative answer comes to these questions from two premises: ﬁrst, emotions

being predominately involuntary cannot be perceived as actions; second, only freely chosen

actions can be assessed as rational or irrational (Elster 1996). Each of these premises was

questioned, but the explanations given are far from being convincing. The ﬁrst premise

(emotions are involuntary) was questioned by the authors arguing that emotions are chosen by

people (Schafer 1976;Solomon 1980;Sartre 2015). They believe that emotions are actions in the

same way as mental calculations are actions. However, Elster commonsensically objects to these

theories. He writes, “If we can choose our emotions, why do we not choose to be happy all the

time? And why would anyone ever choose to be sad?”(Elster 1996: 8). The second premise

seems to be at odds with the idea of rational belief. People form beliefs but do not choose them.

Actually, it is widely accepted that the idea of deciding to believe is self-contradictory (Williams

1970).

We have presented the argument that acting upon desires and given preferences is not

enough to establish freedom. Now, we move toward two contemporary philosophers (Frankfurt

and Dworkin) who argue that autonomy comes from the reflection about desires and who try to

establish a hierarchical self where reason and commitments should be protected. Both argu-

ments are essential to support the conception of “long-term human”presented in this paper.

Frankfurt (1971) argued that emotions (desires) do not make us free. He called the condition

when people are tossed by their desires as “wanton.”Its predominant feature is that it does not

care about people’s will. The desires move people to do a particular thing without asking them

either they want to be moved by those desires or they prefer to be moved by others. Wanton is

the feature of young children and animals. We do not perceive wanton as having freedom of the

will, even though we recognize that animals can be free to run in whatever direction they want.

Therefore, Frankfurt stated that “having the freedom to do what one wants to do is not a

sufﬁcient condition of having a free will”(1971: 9). Here, Frankfurt distinguished between being

free to do what one wants and being free to decide what one wants. These concepts are

completely different:

“A person who is free to do what he wants to do may yet not be in a position to have the will he

wants. Suppose, however, that he enjoys both freedom of action and freedom of the will. Then he is

not only free to do what he wants to do; he is also free to want what he wants to want.”(Frankfurt

1971: 14)

To explain this difference, Frankfurt presented the conception of the second-order desires.

This can be described using the previously analyzed case of cigarettes. Having the choice to take

or not to take cigarettes, the addicted people will choose cigarettes, which is their first-order

preference. However, if they had the choice, they would rather rank their preferences as no

cigarettes > cigarettes than cigarettes > no cigarettes. According to Frankfurt, the capacity to

have second-order desires (“metapreferences”;Sen 1977) distinguishes humans from other

The discussion on rationality of emotions is extensive and could not be presented here (see, de Sousa 1990).

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forms of life, which differentiates his account from Becker’s rational addict who incorporates

different desires in the moment of choice and performs a cost–beneﬁt calculation. Moreover,

Frankfurt (1971) considers that free will should be perceived as the ability to choose according to

one’s second-order desires (metapreferences). It means the potential to construct the preferences

that one would prefer to have.

Philosophers frequently use metapreferences and the idea of hierarchical self in debates on

personal autonomy. Frankfurt’s conception of second-order desires is much closer to Kant

(goal-oriented economics) than Hume (value-free economics). Although individuals have

preferences (ﬁrst-order desire) as in Humean approach and neoclassical economics, they can

reason and reﬂect on their preferences, which is where the “true”self lies. However, the met-

apreference approaches are not as strict as Kant’s because they allow the inﬂuence of society in

shaping values (Sen 1973; more on differences between Kant and Sen: Paul-Struder 2006).

In the 1970s, Frankfurt and Dworkin along with other philosophers started the contem-

porary discussion on personal autonomy. Their goal was to decide what kind of individual

freedom should be protected and how it can be presented from the perspective of contemporary

conceptions of free will. They concluded that people’s actions are worth protecting if they are

ingrained in values, commitments and objectives that people have. On the other hand, their

actions are not worth protecting if they go against those values, objectives and commitments.

Both Frankfurt and Dworkin use the hierarchical models when the agent is autonomous only if

her ﬁrst-order desire is accepted by a second-order desire which is identiﬁed with volition

(Frankfurt 1988:12–25). This approach is neutral when considering the origins of higher-order

desires. It does not exclude the desires and values that are socially constructed. The cause of such

desires does not matter, but only the agent’s identiﬁcation with them (Frankfurt 1988: 53).

Autonomy concerns our ability to examine and ask whether we do identify with our desires or

whether we may wish to override them. “We,”in this case, is established by our higher-order

preferences. Dworkin, like Frankfurt, speaks of them as the agent’s“true self”(Dworkin 1988:

59).

Identifying freedom with reason and reflection on desires is a common theme in philosophy.

In general, freedom refers to the self-determination of a subject possessing both reason and will

(Ballet et al. 2013). More fundamentally, it indicates the choice of a particular way of life that

reﬂects one’s values and commitments. It is a different account than negative freedom used in

neoclassical economics, where it is enough if people act upon their preferences. Therefore,

freedom presented in this article means choosing values and commitments reﬂecting the life one

is living. Self-determination means not only the choice as in neoclassical economics (revealed

preference) but also the capacity to choose. In other words, it refers to the capacity to evaluate

and reevaluate one’s choices which can be identiﬁed with precommitment strategies and in-

tentions. The conclusion from the discussion is that the self that should decide is connected with

reason and commitments, and not with desires as unintentionally supported in RPT.

8. CONCLUSIONS

This article demonstrated that neoclassical economics cannot admit that weakness of will exists

due to the axiomatic assumptions of RPT. However, these assumptions lead to many problems.

Their main concern is choice over time because present bias shows that the consistency

18 Acta Oeconomica 72 (2022) 1, 1–23

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assumption is unrealistic. This argument is well established in the literature. However, it is not

sufficient to dismiss the axiomatic assumptions of RPT. The example of Becker’s rational addict

has been presented to show how the descriptive criticism concerning intertemporal choices is

absorbed and economists can argue that people always choose what is best for them. The reason

for this is a tautological understanding of rationality and utility. This paper presents the problems

with these assumptions on the example of weakness of will. Denying the existence of this phe-

nomenon leads to substantial problems in real life (economics’conception of well-being).

The philosophical discussion on the weakness of will was necessary to establish a distinction

between desires (first-order desires/short-term preferences) and intentions (second-order de-

sires/long-term preferences). Precommitment strategies allow finding what preferences in-

dividuals really want to have. This knowledge is essential in the context of intertemporal choices

because comparing them by the utility measurements seems very problematic. The framework

distinguishing between intentions and desires should help economists decide which self should

be in control. The conclusion is that people should follow reason and commitments because they

support freedom and autonomy. However, it is more a methodological framework than a

justification for some behavioural economists who want to nudge people toward “puriﬁed

preferences”which can be discovered thanks to New Year’s resolution test (Thaler –Sunstein

2008: 6,73). Despite having a methodological framework, it is hard to distinguish between real

commitments and cheap talk. Hence, we should take some declarations with a pinch of salt

(Bryan et al. 2010;Laibson 2015;Sugden 2018).

This paper is intended to be a new impulse for multiple self-conception which had not gained

much popularity, precisely because it did not have a framework that enables economists to decide

between selves. Moreover, the demonstration of the qualitative difference between desires and

intentions can convince economists not to focus solely on the individuals’choices. However, the

take-home message of this paper is not that we should not rely on RPT because people are not

rational and choices are context-dependent as the behavioural economists argue. The message is

that economists should not shy away from discussing human goals and cannot treat RPT as a

value-free framework. It is impossible not to decide which self should be in control.

ACKNOWLEDGEMENT

The project is financed by the Ministry of Science and Higher Education in Poland under the

programme “Regional Initiative of Excellence”2019–2022, project number 015/RID/2018/19,

total funding amount 10 721 040,00 PLN.

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Valuation Methods in Ecosystem Services: A Me-ta-analysis

Article

Full-text available

Jan 2022

Ecosystem services are the benefits people obtain from ecosystems, including provisioning, regulating, supporting, and cultural services. The Meta-analysis of this seminar was reviewed to identify, describe, and choose an appropriate ecosystem valuation method. Four major and nine sub-ecosystem services valuation methods were reviewed from scientific literature sources. Direct market-valuation methods are used to estimate ecosystem services via the use of direct market prices and production functions, indirect market valuation methods are used to estimate when direct markets for many ecosystem goods and services do not exist, direct market prices are missing, and stated preference valuation methods are used when no market prices are available, indirect market valuation methods are not possible, and the change in ecosystem services is hypothetical. The indirect market valuation methods can be used to estimate economic values for all types of ecosystem services. Ecosystem service modeling is used in integrating all the spatial and temporal dynamics of ecosystem services. The strength and limitations of each ecosystem services valuations method are summarized to know and choose appropriate valuation methods. The analysis shows different valuation methods exist and have been applied to estimate the values of different ecosystem services, but their appropriateness under specific conditions or limitations is not uniform. Thus, further study on the pros and cons of valuation methods will be needed to choose appropriate ecosystem valuation methods.

Valuation Methods in Ecosystem Services: A Meta-analysis

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Aug 2022

The Eclipse of Value-Free Economics. The Concept of Multiple Self versus Homo Economicus

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Aleksander Ostapiuk

The books’ goal is to answer the question: Do the weaknesses of value-free economics imply the need for a paradigm shift? The author synthesizes criticisms from different perspectives (descriptive and methodological). Special attention is paid to choices over time, because in this area value-free economics has the most problems. In that context, the enriched concept of multiple self is proposed and investigated. However, it is not enough to present the criticisms towards value-free economics. For scientists, a bad paradigm is better than no paradigm. Therefore, the author considers whether value-based economics with normative approaches such as economics of happiness, capability approach, libertarian paternalism, and the concept of multiple self can be the alternative paradigm for value-free economics. This book is essential reading to everyone interested in the current state of economics as a discipline.

Sketch for a Theory of the Emotions

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Jean-Paul Sartre

Happiness: A Revolution in Economics

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Bruno Frey

A leading economist discusses the potential of happiness research (the quantification of well-being) to answer important questions that standard economics methods are unable to analyze. Revolutionary developments in economics are rare. The conservative bias of the field and its enshrined knowledge make it difficult to introduce new ideas not in line with received theory. Happiness research, however, has the potential to change economics substantially in the future. Its findings, which are gradually being taken into account in standard economics, can be considered revolutionary in three respects: the measurement of experienced utility using psychologists' tools for measuring subjective well-being; new insights into how human beings value goods and services and social conditions that include consideration of such non-material values as autonomy and social relations; and policy consequences of these new insights that suggest different ways for government to affect individual well-being. In Happiness, emphasizing empirical evidence rather than theoretical conjectures, Bruno Frey substantiates these three revolutionary claims for happiness research. After tracing the major developments of happiness research in economics and demonstrating that we have gained important new insights into how income, unemployment, inflation, and income demonstration affect well-being, Frey examines such wide-ranging topics as democracy and federalism, self-employment and volunteer work, marriage, terrorism, and watching television from the new perspective of happiness research. Turning to policy implications, Frey describes how government can provide the conditions for people to achieve well-being, arguing that a crucial role is played by adequate political institutions and decentralized decision making. Happiness demonstrates the achievements of the economic happiness revolution and points the way to future research.

The Inexact and Separate Science of Economics

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Jan 1992

Daniel M. Hausman

This book offers a comprehensive overview of the structure, strategy and methods of assessment of orthodox theoretical economics. In Part I Professor Hausman explains how economists theorise, emphasising the essential underlying commitment of economists to a vision of economics as a separate science. In Part II he defends the view that the basic axioms of economics are 'inexact' since they deal only with the 'major' causes; unlike most writers on economic methodology, the author argues that it is the rules that economists espouse rather than their practice that is at fault. Part III links the conception of economics as a separate science to the fact that economic theories offer reasons and justifications for human actions, not just their causes. With its lengthy appendix introducing relevant issues in philosophy of science, this book is a major addition to philosophy of economics and of social science.

The Theory and Practice of Autonomy

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Gerald Dworkin

This important new book develops a new concept of autonomy. The notion of autonomy has emerged as central to contemporary moral and political philosophy, particularly in the area of applied ethics. professor Dworkin examines the nature and value of autonomy and uses the concept to analyse various practical moral issues such as proxy consent in the medical context, paternalism, and entrapment by law enforcement officials.

Breakdown of Will

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Mar 2001

George Ainslie

Ainslie argues that our responses to the threat of our own inconsistency determine the basic fabric of human culture. He suggests that individuals are more like populations of bargaining agents than like the hierarchical command structures envisaged by cognitive psychologists. The forces that create and constrain these populations help us understand so much that is puzzling in human action and interaction: from addictions and other self-defeating behaviors to the experience of willfulness, from pathological over-control and self-deception to subtler forms of behavior such as altruism, sadism, gambling, and the 'social construction' of belief. This book integrates approaches from experimental psychology, philosophy of mind, microeconomics, and decision science to present one of the most profound and expert accounts of human irrationality available. It will be of great interest to philosophers and an important resource for professionals and students in psychology, economics and political science.

What Does It Mean to Say That Economics Is Performative?

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Jun 2020

MICHEL CALLON

Measuring Time Preferences

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J ECON LIT

We review research that measures time preferences—i.e., preferences over intertemporal trade—offs. We distinguish between studies using financial flows, which we call “money earlier or later” (MEL) decisions, and studies that use time-dated consumption/effort. Under different structural models, we show how to translate what MEL experiments directly measure (required rates of return for financial flows) into a discount function over utils. We summarize empirical regularities found in MEL studies and the predictive power of those studies. We explain why MEL choices are driven in part by some factors that are distinct from underlying time preferences. (JEL C61, D15)

Intertemporal choice

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The community of advantage: A behavioural economist's defence of the market

Book

Jul 2018

R. Sugden

Normative analysis in economics has usually aimed at satisfying individuals' preferences. Its conclusions have supported a long-standing liberal tradition of economics that values economic freedom and views markets favourably. However, behavioural research shows that individuals' preferences, as revealed in choices, are often unstable, and vary according to contextual factors that seem irrelevant for welfare. The Community of Advantage proposes a reformulation of normative economics that is compatible with what is now known about the psychology of choice. Other such reformulations have assumed that people have well-defined 'latent' preferences which, because of psychologically-induced errors, are not always revealed in actual choices. According to these reformulations, the economist's job is to reconstruct latent preferences and to design policies to satisfy them. The argument of this book is that latent preference and error are psychologically ungrounded concepts, and that economics needs to be more radical in giving up rationality assumptions. The book advocates a kind of normative economics that does not use the concept of preference. Its recommendations are addressed, not to an imagined 'social planner', but to citizens, viewed as potential parties to mutually beneficial agreements. Its normative criterion is the provision of opportunities for individuals to participate in voluntary transactions. Using this approach, many of the normative conclusions of the liberal tradition are reconstructed. It is argued that a well-functioning market economy is an institution that individuals have reason to value, whether or not their preferences satisfy conventional axioms of rationality, and that individuals' motivations in such an economy can be cooperative rather than self-interested.

Weakness of will. The limitations of revealed preference theory

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