Revealed Preference Theory, Ordering and the Axiom of Sequential Path Independence

This paper is concerned with the axiomatic foundation of the theory of choice. Describing a choice procedure which one often observes in real life, this paper shows that the requirement of path independence of such a procedure is a necessary and sufficient condition for transitive or full rationaliz...

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Bibliographic Details
Published in:The Review of economic studies 1988-04, Vol.55 (2), p.343-351
Main Author: Bandyopadhyay, Taradas
Format: Article
Language:English
Subjects:
Binary relations
Consumer behavior
Consumer choice
Consumer preferences
Data collection
Economic theory
Mathematical functions
Observed choices
Rational choice theory
Sufficient conditions
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Summary:This paper is concerned with the axiomatic foundation of the theory of choice. Describing a choice procedure which one often observes in real life, this paper shows that the requirement of path independence of such a procedure is a necessary and sufficient condition for transitive or full rationalization of a choice function, i.e. the existence of a preference ordering. It is shown that our result holds when rationality is identified with different interpretations of the binary relations of preference revealed by a choice function, e.g. the revealed preference relation of Arrow, the wide revealed preference relation of Richter. It is also shown that a weaker version of our path independence condition is both necessary and sufficient for a rational choice.
ISSN:0034-6527
1467-937X
DOI:10.2307/2297585