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The Collapse of Indifference: A Unified Framework for Behavioral Engagement

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  • Sekimonyo, Jo M.
  • Casimir, Tara

Abstract

This paper challenges the continued reliance on preference-based rational choice as the foundation of economic analysis. Traditional models assume that individuals continuously rank alternatives and act to maximize utility, yet a substantial body of empirical and experimental evidence shows behavior marked by inertia, impulsivity, and context dependence. Building on, but moving beyond, bounded rationality and prospect theory, this paper proposes Indifference Theory, grounded in a Propensity to Act (Pa) framework, as an alternative foundation for modeling action. The model reconceptualizes decision-making as threshold-based rational minimization of indifference. Individuals remain inactive when the margin of action, or indifference margin, is non-negative (Pa ≥ 0) and act only when it becomes negative (Pa

Suggested Citation

  • Sekimonyo, Jo M. & Casimir, Tara, 2026. "The Collapse of Indifference: A Unified Framework for Behavioral Engagement," MPRA Paper 128992, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:128992
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    References listed on IDEAS

    as
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    4. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
    5. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 443-478.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • D2 - Microeconomics - - Production and Organizations
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • H0 - Public Economics - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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