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The impossibility of rational consumer choice

  • Jakob Kapeller

    ()

  • Bernhard Schütz

    ()

  • Stefan Steinerberger

    ()

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    In this paper we show that a rational consumer choice along the lines traditionally suggested might lead to paradoxical results if one considers multidimensional goods, which incorporate a series of incommensurable aspects. Thereby, we explore the similarity between the resulting paradox and Kenneth Arrow’s well known Impossibility Theorem. Based on these considerations we suggest a solution for the former problem along the lines of Herbert Simon and Amos Tversky, which might—if driven to its extreme—even provide a unique and arguably rational solution for consumer choice among multidimensional goods. Eventually, we argue that the resulting framework poses a potentially useful starting point for further developing an evolutionary theory of consumer choice. Copyright Springer-Verlag 2013

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    File URL: http://hdl.handle.net/10.1007/s00191-012-0268-2
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    Article provided by Springer in its journal Journal of Evolutionary Economics.

    Volume (Year): 23 (2013)
    Issue (Month): 1 (January)
    Pages: 39-60

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    Handle: RePEc:spr:joevec:v:23:y:2013:i:1:p:39-60
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    1. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    2. Sugden, Robert, 1991. "Rational Choice: A Survey of Contributions from Economics and Philosophy," Economic Journal, Royal Economic Society, vol. 101(407), pages 751-85, July.
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    5. Liran Einav & Jonathan Levin, 2010. "Empirical Industrial Organization: A Progress Report," Discussion Papers 09-010, Stanford Institute for Economic Policy Research.
    6. Amartya Sen, 1996. "Maximization and the Act of Choice," Harvard Institute of Economic Research Working Papers 1766, Harvard - Institute of Economic Research.
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    9. Nelson, Richard & Consoli, Davide, 2010. "An Evolutionary Theory of Household Consumption Behavior," MPRA Paper 20197, University Library of Munich, Germany.
    10. Marina Bianchi, 1997. "Collecting as a Paradigm of Consumption," Journal of Cultural Economics, Springer, vol. 21(4), pages 275-289, December.
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    12. Matthew Rabin., 1997. "Psychology and Economics," Economics Working Papers 97-251, University of California at Berkeley.
    13. Andreas Reinstaller & Bulat Sanditov, 2005. "Social structure and consumption: on the diffusion of consumer good innovation," Journal of Evolutionary Economics, Springer, vol. 15(5), pages 505-531, November.
    14. Kenneth J. Arrow, 1950. "A Difficulty in the Concept of Social Welfare," Journal of Political Economy, University of Chicago Press, vol. 58, pages 328.
    15. Wang, Ge & Huang, Samuel H. & Dismukes, John P., 2004. "Product-driven supply chain selection using integrated multi-criteria decision-making methodology," International Journal of Production Economics, Elsevier, vol. 91(1), pages 1-15, September.
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    17. Kenneth J. Arrow & Herve Raynaud, 1986. "Social Choice and Multicriterion Decision-Making," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511754, June.
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