Rationality and Preference

Fuzzy Choice Functions - A Revealed Preference Approach

As mentioned in the Introduction, it has the following goals: to develop the main topics of revealed preference theory (rationality, revealed preference, congruence, consistency) for a large class of fuzzy choice functions, to explore new topics (degree of dominance, similarity, indicators of rationality) specific to a fuzzy approach to choice functions and to show the manner in which some prob...

Reciprocity and Consistency of Fuzzy Preference Relations

Preference relations are the most common representation structures of information used in decision making problems because they are useful tool in modelling decision processes, above all when we want to aggregate experts’ preferences into group preferences. Therefore, to establish rationality properties to be verified by preference relations is very important in the design of good decision maki...

A Logical Account of Social Rationality in Strategic Games

We propose a modal logic that enables to reason about different kinds of rationality in strategic games. This logic integrates the concepts of joint action, belief, individual preference and group preference. The first part of the article is focused on the notion of individualistic rationality assumed in classical game theory: an agent decides to perform a certain action only if the agent belie...

What Common Ground Exists for Descriptive, Prescriptive, and Normative Utility Theories?

D and normative modeling of decision making under risk and uncertainty have grown apart over the past decade. Psychological models attempt to accommodate the numerous violations of rationality axioms, including independence and transitivity. Meanwhile, normatively oriented decision analysts continue to insist on the applied usefulness of the subjective expected utility (SEU) model. As this gap ...

Revealed Preference Tests Using Supermarket Data: the Money Pump

We use a money pump argument to measure deviations from the revealed preference axioms. Using a panel data set of food expenditures, we find a large number of violations of the weak axiom of revealed preference. The money pump costs are small, which indicate that the violations of revealed preference are not severe. While most households’ behavior deviates from rationality, by our measure they ...

A difficult choice in preference theory: rationality implies completeness or transitivity but not both