People have preferences. Preferences are subjective. Preferences are an ordered list (cardinal). People value goods and services unit by unit (marginal utility).
Language
In natural languages, words have meaning. They have literal meanings (denotation) and associated meanings (connotation). The meaning of words evolve over time. The majority interpretation is deemed to be the "correct" definition and is comitted to dictionaries.
When a word is used with a non-majority meaning the context usually resolves the correct meaning. E.g. in the context of law, "discovery" means "collecting evidence before a trial". Sometimes the non-majority definition is explicitly defined before usage.
Preferences (and goals)
People have preferences which are ways in which they want the world to unfold before their eyes. Preferences are personal and subjective. Preferences are stored in your brain and are ultimately revealed through human action. E.g. you buy a pack of cigarettes because you prefer the cigarettes over the 10 USD at the time of purchase.
Preferences are an ordered list of options of which option you value the most. E.g.
- a pack of cigarettes
- pack of beers
- 10 USD
When you are buying the pack of cigarettes you are sacrificing the pack of beer. Your purchase cost you a pack of beers. The next-best option that you sacrifice is called opportunity cost. The value difference of a pack of cigarettes and a pack of beers can be thought of as psychic profit and is hard to quantify.
In an honest voluntary trade both participants profit because their preferences are different.
A goal is simply your current most valued preference.
Time preferences
People have time preferences which are ways in which they want the world to unfold over time. This can also be described as short-term and long-term planning.
People who have a low time preferance prefer things to happen later rather than sooner.
E.g. you prefer to have 104 USD in one year from now rather than having 104 USD right now. So, you put it in your savings account at 4% interest.
Irrationality
People might regret their actions which illustrates that preferences change over time. Sometimes preferences fluctuate wildly and I think of this as irrationality.
risk
preferance for: tradition familiarity/easy simplicity learning-oriented/flashy
advantages and disadvantages and net value
not all decisions is worth deliberating
deciding to deliberate - deciding to not deliberate
quick response - longer response - khaneman
better or worse? for what purpose?
goal alignment
experiments and reversal-cost
critical decisions
level of abstraction
the prince - politics and power