I should warn you straight away that multiple decision theorists have told me they think this article is bonkers. Nonetheless, I enjoy Chuck Manski’s take on econometrics – roughly, that analysts should be completely agnostic when it comes to missing or spoiled data, and therefore report only best and worst-case ranges for results – and the present paper essentially takes that philosophy into the world of decision theory. Let’s first note, however, some discomfort with the term “actualist rationality”. Manski defines as actualist rational agent simply as one who does not select a weakly dominated action when faced with a decsion. He rejects all axioms related to consistency across counterfactual choices. The problem with the term is that actualism seems to me to have a totally different philosophic term: actualism is the rejection of possible things or worlds (like those in David K. Lewis’ counterfactuals) which do not actually exist. Why not just call actualist rationality “consequentalist rationality”?
The heart of the article, fittingly, is a ultraconsequentialist viewpoint of “should”, particularly from the standpoint of an analyst. No behavioral axiom, such as the intransitivity among decisions which Savage argues ought be held by rational decisionmakers, is allowed. Independence of irrelevant alternatives is also rejected. Clearly, IIA does not allow potential regret to affect decisionmakers, and Manski has long been a fan of utility functions like minimax expected regret.
I’m afraid parts of the article are a red herring. No decision theorist, save perhaps Savage himself, believes that decisionmakers always and everywhere should behave consistently with the Savage axioms. Indeed, the entire field over the past half century has more or less been devoted to exploring what happens when you alter some of the Savage axioms. Many decision theorists, on the other hand, view the Savage axioms as more or less reasonable, and therefore see subjective expected utility maximization as reasonable. In line with this, many decision theorists find EU or SEU useful tools for investigating the world, without proscribing any “ought” distinction on other people’s decisions. In any case, whether you’re convinced by Manski or not, it’s surely worth understanding the types of assumptions you make about your own assumptions: is it valid for economists to make non-consequentialist claims about human behavior? In what contexts? For a number of reasons, I think the answer is yes, deontology and ethics and so on have much to contribute to economics, even from the viewpoint of an analyst. Check out this paper for the converse argument.
http://faculty.wcas.northwestern.edu/~cfm754/actualist_rationality.pdf (WP, final version in Theory and Decision 2009)