Is there a term for the preference of no option over a marginally better option? Related discussions: discriminatory charities, minimum wage, paying homeless people to fight each other, sweatshops
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Japanese has a word, "mu" which is a good answer for "Have you stopped beating your wife?" kinds of questions. It's roughly, "Your question is based on an incorrect premise."
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Sometimes doing nothing is better than simply doing something, just to do something.
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In behavioral psychology this is sometimes called a "no preference" or "null preference" in a fixed choice preference assessment where only a limited selection is available and neither are taken.
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