Haven't had one of these for awhile. This thread is for questions or comments that you've felt silly about not knowing/understanding. Let's try to exchange info that seems obvious, knowing that due to the illusion of transparency it really isn't so obvious!
Suppose someone has a preference to have sex each evening, and is in a relationship with someone what a similar level of sexual desire. So each evening they get into bed, undress, make love, get dressed again, get out of bed. Repeat the next evening.
How is this different from having exploitable circular preferences? After all, the people involved clearly have cycles in their preferences - first they prefer getting undressed to not having sex, after which they prefer getting dressed to having (more) sex. And they're "clearly" being the victims of a Dutch Book, too - they keep repeating this set of trades every evening, and losing lots of time because of that.
To me this seems to suggest that having circular preferences isn't necessarily the bad thing that it's often made out to be - after all, the people in question probably wouldn't say that they're being exploited. But maybe I'm missing something.
The circular preferences that go against the axioms of utility theory, and which are Dutch book exploitable, are not of the kind "I prefer A to B at time t1 and B to A at time t2", like the ones of your example. They are more like "I prefer A to B and B to C and C to A, all at the same time".
The couple, if they had to pay a third party a cent to get undressed and then a cent to get dressed, would probably do it and consider it worth it---they end up two cents short but having had an enjoyable experience. Nothing irrational about that. T... (read more)