Under the assumption that people are risk-neutral with respect to utils, what does it mean for an agent to rationally refuse an outcome where they expect to get more utils?
and then later on say:
Sir Percy knows that his expected utility is lower, but seems to have rationally decided that this is acceptable given his preferences about ambiguity.
But you don’t seem to have actually answered your own question: how are you defining ‘rationality’ in this post? If Sir Percy knows that his expected utility is lower, then his actions clearly can’t be VNM-rational, but you haven’t offered an alternative definition that would allow us to verify that Sir Percy’s decisions are, indeed, rational.
You ask:
and then later on say:
But you don’t seem to have actually answered your own question: how are you defining ‘rationality’ in this post? If Sir Percy knows that his expected utility is lower, then his actions clearly can’t be VNM-rational, but you haven’t offered an alternative definition that would allow us to verify that Sir Percy’s decisions are, indeed, rational.