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Rational Choice with Intransitive Preferences

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  • Santosh C. Panda

Abstract

Traditional rational choice theory assumes that the weak preference relation of an agent is an ordering that is it satisfies reflexivity, completeness and transitivity. It is also well known that the ordering property is essential to build the traditional ordinal utility analysis of consumer behaviour. However, there can be many situations when the weak preference relation of an agent may violate transitivity property, and hence, is not an ordering. In such situations traditional ordinal utility analysis breaks down. This paper develops a framework and discusses all the important results of rational choice theory when preferences are intransitive. It looks at weaker rationality properties such as quasi-transitivity and acyclicity and based on that it introduces weaker concepts of rationality such as quasi-transitive rationality and acyclic rationality and characterizes them. It also brings in the congruence axioms and property of path independence, and establishes the link with rationality. Finally, it analyzes how the results will change if we bring in restricted domain assumption of the choice function. JEL Classification: D01, D10, D11

Suggested Citation

  • Santosh C. Panda, 2018. "Rational Choice with Intransitive Preferences," Studies in Microeconomics, , vol. 6(1-2), pages 66-83, June.
    • Handle: RePEc:sae:miceco:v:6:y:2018:i:1-2:p:66-83
    DOI: 10.1177/2321022218799001
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    References listed on IDEAS

    as
    1. Kotaro Suzumura, 1976. "Rational Choice and Revealed Preference," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(1), pages 149-158.
    2. W. E. Armstrong, 1951. "Utility And The Theory Of Welfare," Oxford Economic Papers, Oxford University Press, vol. 3(3), pages 259-271.
    3. Sen, Amartya K, 1977. "Social Choice Theory: A Re-examination," Econometrica, Econometric Society, vol. 45(1), pages 53-89, January.
    4. Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(3), pages 307-317.
    5. Amartya Sen, 1969. "Quasi-Transitivity, Rational Choice and Collective Decisions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(3), pages 381-393.
    6. Plott, Charles R, 1973. "Path Independence, Rationality, and Social Choice," Econometrica, Econometric Society, vol. 41(6), pages 1075-1091, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Rational choice; transitivity; quasi-transitivity; acyclicity; congruence axioms; path independence;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D10 - Microeconomics - - Household Behavior - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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