A Comment on the Absent-Minded Driver Paradox

Abstract

Piccione and Rubinstein 1996 present the ''absent-minded driver paradox,'' which shows that if a decision maker's information set is allowed to intersect a decision tree path in more than one node, inconsistencies may arise. Specifically, the decision maker may wish to change her choice without any ''intrinsic'' change in preferences and without receiving any new information, apart from the mere fact that she was called upon to act. I argue that decision problems can and should be formulated in such a way that information sets do not contain more than one decision node on each path. Such formulations will not be subject to the paradox. More importantly, they follow from the classical lore of decision theory. Differently put, the absent-minded driver paradox is a result of decision modeling which violates some of the basic, though often implicit, foundations of decision theory.