The impossibility of rational consumer choice
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
Volume (Year): 23 (2013)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/journal/191/PS2|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
- Richard Nelson & Davide Consoli, 2010.
"An evolutionary theory of household consumption behavior,"
Journal of Evolutionary Economics,
Springer, vol. 20(5), pages 665-687, October.
- Nelson, Richard & Consoli, Davide, 2010. "An Evolutionary Theory of Household Consumption Behavior," MPRA Paper 20197, University Library of Munich, Germany.
- 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.
- J. Levin & L. Einav., 2012. "Empirical Industrial Organization: A Progress Report," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
- Liran Einav & Jonathan Levin, 2010. "Empirical Industrial Organization: A Progress Report," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 145-162, Spring.
- Liran Einav & Jonathan D. Levin, 2010. "Empirical Industrial Organization: A Progress Report," NBER Working Papers 15786, National Bureau of Economic Research, Inc.
- Liran Einav & Jonathan Levin, 2010. "Empirical Industrial Organization: A Progress Report," Discussion Papers 09-010, Stanford Institute for Economic Policy Research.
- Amartya Sen, 1997. "Maximization and the Act of Choice," Econometrica, Econometric Society, vol. 65(4), pages 745-780, July.
- Amartya Sen, 1996. "Maximization and the Act of Choice," Harvard Institute of Economic Research Working Papers 1766, Harvard - Institute of Economic Research.
- Sen, A., 1996. "Maximisation and the Act of Choice," Papers 270, Banca Italia - Servizio di Studi.
- Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
- Sugden, Robert, 1991. "Rational Choice: A Survey of Contributions from Economics and Philosophy," Economic Journal, Royal Economic Society, vol. 101(407), pages 751-785, July.
- J.S. Metcalfe, 2001. "special issue: Consumption, preferences, and the evolutionary agenda," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 37-58.
- Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
- Matthew Rabin., 1997. "Psychology and Economics," Economics Working Papers 97-251, University of California at Berkeley.
- Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- 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.
- Brian J. Loasby, 2001. "special issue: Cognition, imagination and institutions in demand creation," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 7-21.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
- Kenneth J. Arrow, 1950. "A Difficulty in the Concept of Social Welfare," Journal of Political Economy, University of Chicago Press, vol. 58, pages 328-328.
- H. Leibenstein, 1950. "Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand," The Quarterly Journal of Economics, Oxford University Press, vol. 64(2), pages 183-207.
- Sugden, Robert, 1985. "Why Be Consistent? A Critical Analysis of Consistency Requirements in Choice Theory," Economica, London School of Economics and Political Science, vol. 52(206), pages 167-183, May.
- Kenneth J. Arrow & Herve Raynaud, 1986. "Social Choice and Multicriterion Decision-Making," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511754, July.
- Marina Bianchi, 1997. "Collecting as a Paradigm of Consumption," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(4), pages 275-289, December.
- 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. Full references (including those not matched with items on IDEAS)