Rationality, external norms, and the epistemic value of menus

Ever since Sen’s (1993; 1997) criticism on the notion of internal consistency or menu independence of choice, there exists a widespread perception that the standard revealed preference approach to the theory of rational choice has difficulties in coping with the existence of external norms, or the information a menu of choice might convey to a decision-maker, viz., the epistemic value of a menu. This paper provides a brief survey of possible responses to these criticisms of traditional rational choice theory. It is shown that a novel concept of norm-conditional rationalizability can neatly accommodate external norms within the standard framework of rationalizability theory. Furthermore, we illustrate that there are several ways of incorporating considerations regarding the epistemic value of opportunity sets into a generalized model of rational choice theory. Journal of Economic Literature Classification Nos.: D11, D71. ∗ Thanks are due to Nick Baigent, Wulf Gaertner, Prasanta Pattanaik, Amartya Sen and Yongsheng Xu for discussions over the years on the subject matter of this paper. Financial support through grants from the Social Sciences and Humanities Research Council of Canada and a Grant-in-Aid for Scientific Research from the Ministry of Education, Culture, Sports, Science and Technology of Japan is gratefully acknowledged.