Incomparability and Incommensurability in Choice: No Common Currency of Value?

Area of Science:

• Cognitive Psychology
• Behavioral Economics
• Decision Theory

Background:

• Traditional decision-making models rely on a common value currency (e.g., utility) for comparing choices.
• This assumption simplifies complex human choices but may limit explanatory power.

Purpose of the Study:

• To challenge the assumption of a universal value scale in decision-making models.
• To propose an alternative framework accommodating incommensurable values and context-specific comparisons.
• To explore the implications of incommensurability for rationality and decision-making models.

Main Methods:

• Theoretical analysis of existing decision-making models.
• Development of a conceptual framework based on 'covering values' for incommensurable options.
• Examination of implications using economic theorems (Arrow's impossibility theorem) and cognitive principles.

Main Results:

• Demonstrates that incommensurable values are prevalent in everyday choices, rendering universal value scales inadequate.
• Proposes that choices are compared using specific, non-universal 'covering values' tied to goals or states.
• Highlights that abandoning the common-currency assumption necessitates rank-based and heuristic models, contrasting with utility-based approaches.

Conclusions:

• Existing economic and psychological decision-making models are fundamentally limited by the common-currency assumption.
• Incommensurability of value is deeply linked to inconsistencies in human decision-making and rank-based value coding.
• Developing single-quantity-maximizing models of decision-making may be impossible without accounting for incommensurability.