Problem of Indifference and Choice

Abstract

The aim of this paper is to anchor the problem of indifference and choice in a time continuum. Every action is future-oriented. The choice that is being made here and now is the choice that should, from a subjective point of view, eliminate a feeling of uneasiness toward the future. As Shackle (1972) notes, it is too late for the past and even for the present. The goal of this paper will allow us to look critically at an interesting ongoing discussion about the problem of indifference and choice. Debate is conducted primarily in circles of the Austrian School. This is because Nozick (1977) addressed the problem implying the invalidity of the law of diminishing marginal utility in the absence of a presupposition of indifference to the representatives of the Austrian school. The whole genesis of the discussion on the topic can be seen at the beginning of Block (2012). This paper briefly introduces the discussion and its main problems. Stated reservations will be removed by suggested solution based on the modification of the theory of subjective value presented in greater detail in Posvanc (2019a, 2019d). It will be shown that proposed solution improves conclusions in Wysocki (2016) and Wysocki-Block (2018, 2019). It will allow to preserve elements of indifference analysis as interpreted by the neoclassical mainstream, however, it will also allow interpretation of the problem of indifference and choice based on strict preferences from the point of view of the Austrian School of Economics. This is a quite controversial conclusion, but it is a logical consequence of the proposed modification in the theory of subjective value.