The first axiomatic accounts of preference for flexibility and freedom of choice are due to Koopmans (1962) and Kreps (1979), who assumed that a Decision Maker always enjoys having more alternatives available. After that, e.g. Puppe (1996) refined the idea and distinguished the essential alternatives in an opportunity set as those whose exclusion “would reduce an agent’s freedom”.
Most applications I know of consider social choice problems that are relevant to economics theory. What other fields have seen applications of those concepts? I'm particularly interested in corporate decision-making and engineering design.
References:
T. C. Koopmans, “On flexibility of future preference,” Cowles Foundation for Research in Economics, Yale University, Cowles Foundation Discussion Papers 150, 1962.
D. M. Kreps, “A representation theorem for ”preference for flexibility”,”
Econometrica, vol. 47, no. 3, pp. pp. 565–577, 1979
C. Puppe, “An Axiomatic Approach to 'Preference for Freedom
of Choice'” Journal of Economic Theory, vol. 68, no. 1, pp. 174–
199, January 1996
You may already be aware of this (as it is still part of economics) but exactly the opposite is often discussed in the context of intertemporal choice (i.e. decision-making involving time) where an individual may prefer to limit or constrain his/her future choice set in order to make sure that he/she carries out a particular plan of action preferred from today's perspective.
Dear Jurgis, thanks for the pointer to intertemporal choice. I'm familiar with the related literature on discounted utility and sequential decision-making in general. The reason why I'm going the opposite way (broadening the range of future options) is to address uncertainty on preferences elicitation.
Sometimes, decisions must be postponed in order to reduce the risk of committing into the unkown, until additional upcoming data is gathered. That's the main issue I expect to see addressed in applications of preference for flexibility and freedom of choice.
Hi Carlos! Flexibility and adaptability are considered now key elements in the design of engineering systems, since they enable reacting to uncertain futures. You may want to look at these papers:
- https://www.academia.edu/3462764/Measuring_the_Value_of_Flexibility_in_Space_Systems_A_Six-Element_Framework
- http://onlinelibrary.wiley.com/doi/10.1002/j.2334-5837.2012.tb01395.x/abstract
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