Alternate dialogue for the last two panels:
Kimiko [thinking quickly]: I think, if you meta-analyze for a—ah—Poisson process intensity marginal likelih -- [disappears]
Inquisitor-Superintendent [off-panel]: Post-hoc.
(This joke would work better if there were clearer hints that past appellant hypotheses had also been rejected, though.)
What information can be derived about utility functions from behavior?
(Here, “information about utility functions” may be understood in your policy-relevant sense, of “factors influencing the course of action that rational expected-utility maximization might surprisingly choose to force upon us after it was too late to decommit.”)
Suppose you observe that some agents, when they are investing, take into account projected market rates of return when trading off gains and losses at different points in time. Here are two hypotheses about the utility functions of those agents.
Hypothesis 1: These agents happened to already have a utility function whose temporal discounting was to match what the market rate of return would be. This is to say: The utility function already assigned particular intrinsic values to hypothetical events in which assets were gained or lost at different times. The ratios between these intrinsic values were already equal to what the appropriate exponential of the integrated market rate of return would later turn out to be.
Hypothesis 2: These agents have a utility function in which assets gained or lost in the near term are valued because of an intrinsic good which could be purchased with those assets at a point in the distant future. These agents evaluate near-term investments and payoffs happening at different times in terms of market rates of return, for understandable and purely instrumental reasons relating to opportunity cost.
Neither hypothesis is quite plausible psychologically or historically, but the second hypothesis is closer to being plausible, and each hypothesis makes the same predictive distribution about the agents’ near-term investment behaviors. This is to say that the “preference likelihood” ratio between the two hypotheses is flat.
(In your apparent policy terms, this would correspond roughly to the idea that, while rational expected-utility maximization may be trying to “choose” which of these two utility functions to define as normative, so that it can then “force” the courses of action dictated by the chosen utility function “upon” the agents, in this case the balance of factors affecting rational expected-utility maximization’s “choice” evens out. Therefore, rational expected-utility maximization’s “decision” will depend on its prior disposition to “prefer” one or the other utility function, for reasons unrelated to observation.)
Now, suppose that the agents from the second hypothesis forecast market rates of return for some period, and then create new agents. These new agents have recognizable internal data structures representing utility functions in a form as per the first hypothesis, and these data structures will be queried to determine the new agents’ decisions about near-term trades. However, the new agents’ only source of information about their utility functions comes from observing their own behavior: they do not have direct introspective access to their internal data structure, and they do not know about the asset conversion event in the future. (However, they will convert their holdings at that time, as a hard-coded instinct; in terms of revealed preference, this can be interpreted as having a utility function that assigns the purchased good infinite relative value). Now, which hypothesis should we say is “really” true of these new agents’ utility functions?
(And how do we delineate what the parts of this situation even are, that supposedly “have” the utility functions we want to inquire about?)
This is a general problem with our present framework for reasoning about utility. The predictions and recommendations from a hypothesized utility function are invariant under various transformations of the hypothesis; in particular, transformations that preserve relative intervals of expected utility between available actions at each juncture. For example, for a perfect expected-utility maximizer, the reward function constructed by a perfectly trained temporal-difference reinforcement learning system motivates exactly the same behavior as the reward function whose integrals the TD learner was trained to predict. (This is quite apart from the problem of invariance under transformations that stretch or squeeze probability and reward simultaneously, such as the transformations that relate different methods of anthropic reasoning.)
As if to add to the confusion, when humans are informed about utility theory, and asked to interpret their introspective information about their preferences in terms of utility, they will report different preferences as being “intrinsic” vs. “instrumental” at different points in time [citation: folk belief]. There may be a psychological process related to temporal-difference reinforcement learning which converts preferences which introspectively appear “instrumental” into preferences which introspectively appear “intrinsic”.
Why were you so certain, in your original draft, that exponential temporal discounting behavior was a matter of intrinsic value rather than instrumental value, so that a normative framework of utilitarian reasoning would force it upon us, and the alternative possibility was not worth mentioning?