Avoidance of Cognitive Biases in Deterministic Environments

A wide range of cognitive biases have been identified by the descriptive economic literature. We identify their opposites as elements of rationality.

Elements

1. 2.2.aAvoidance of Sunk Cost Fallacy

   The ability to walk away from an investment at any point where its future costs exceed its expected future benefits, disregarding prior investments.

2. 2.2.bAvoidance of Endowment Effect

   The agent's maximum willingness to pay to acquire an object should be the same as the price they are willing to accept to sell that same object when they own it.

3. 2.2.cAvoidance of Time Inconsistency

   The ability to be consistent in preferences across time; e.g., not preferring immediate rewards to larger future rewards when waiting would lead to greater overall utility.