Comment by BusinessConsultant on Zut Allais! · 2008-01-20T17:28:13.000Z · LW · GW

Context is king.

This sort of dilemma depends on context. Some may have been cheated in the past, so certainty is valuable to them. Others may need exactly $24,000, and others may need exactly $27,000 for a larger (higher utility) purpose. Others may have different risk tolerance.

You may argue that, given only this decision and no outside influences, a person would be irrational to choose a particular way. Unfortunately, you will never find a reasoning being without context.

This is exactly the Bayesian way. Previous experience defines what is currently rational. Later experience may show the earlier actions to have been imperfect, or unwise to repeat. But to say that we are irrational because we are basing our decision on our own personal context is to deny everything that you have built up to this point.

Context is everything following, "E(X given ". Do not deny the value of it by asserting that, in one specific instance, it mislead us. We may learn from additional data, but it did not mislead us.