Choice Utility

A basic tenet of rational choice theory is that people choose the outcome that produces the highest subjective expected utility (Savage, 1954; von Neumann and Morgenstern, 1947). Decades of research in psychology shows that judgments of utility are in fact malleable, and that choice is affected by the decision context (Slovic, 1995; Tversky and Kahneman, 1981). In the present work we argue that the malleability of people’s preferences extends to the context in which an outcome is reached. Thus, people’s choices can be influenced simply by how they are going to attain an outcome, independent of what the actual outcome is. We call the utility that people gain (or lose) from the process of how an outcome is obtained, “choice utility,” which is distinct from outcome utility and which can either enhance or detract from the overall attractiveness of an option. We focus on two normatively equivalent processes for obtaining the same outcome: action and inaction. Drawing on research in philosophy, morality, the law, and psychology, we argue that these two processes are not equivalent in people’s minds even if they lead to an identical outcome. In particular, moral and legal philosophers have debated the distinction between outcomes obtained through action and inaction extensively. The question most commonly addressed in this research is whether action is equivalent to inaction in cases where both yield an identical outcome. For instance, moral philosophers argue that people cannot be held morally responsible for inactions (Foot, 1967; Thomson, 1985). Legal scholars argue that because there is no behavior involved, it can be assumed that inactions do not cause any change in the physical environment relative to actions (Duttwiller, 2006). Further, to hold someone as liable for the commission of a crime can only be based on an omission if the omission is expressly made sufficient by the law defining the offense, or a duty to perform the omitted act is otherwise imposed by law (LaFave and Scott, 1986). Similarly, substantial research in psychology indicates a distinction between action and inaction in various types of judgments, both in the moral domain (e.g. Sugarman, 1986) and in non-moral decisions (Kahneman and Tversky, 1982; Landman, 1987).