The only thing that means is that the agent obeys the four axioms of VNM-rationality (which are really simple and would be really weird if they weren’t satisfied).
Not really. There are reasonable decision procedures that violate the axioms (by necessity, since they aren’t equivalent to a utility function). For example, anything that makes a decision based on the “5% outcome” of its decisions (known as “VaR”). Or something that strictly optimizes for one characteristic and then optimizes for another among all things optimizing the first.
I don’t think it’s hard to argue that the first process isn’t a good idea, and plenty of people in finance argue that. However, for the second one, who cares that the lexicographic ordering on pairs of real numbers can’t be embedded into the usual ordering on real numbers?
Not really. There are reasonable decision procedures that violate the axioms (by necessity, since they aren’t equivalent to a utility function). For example, anything that makes a decision based on the “5% outcome” of its decisions (known as “VaR”). Or something that strictly optimizes for one characteristic and then optimizes for another among all things optimizing the first.
I don’t think it’s hard to argue that the first process isn’t a good idea, and plenty of people in finance argue that. However, for the second one, who cares that the lexicographic ordering on pairs of real numbers can’t be embedded into the usual ordering on real numbers?