Abstract
The standard theory of rational choice in economics considers an agent’s choices to be rational if and only if the agent makes her choices in different choice situations on the basis of a fixed preference ordering defined over the set of all possible options. This implies that a rational agent’s preferences cannot be context-dependent. This paper outlines a simple framework for defining context-dependence of preferences and for discussing relationships between context-dependent preferences and the notion of rationality.
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Notes
- 1.
Following a fairly common practice in the literature, we are permitting the choice set for a given set of feasible options to have multiple elements.
- 2.
- 3.
In the following section, we elaborate the distinction between normative and non-normative uses of the term “rationality”.
- 4.
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Acknowledgements
We are grateful to the referees and Miriam Teschl for helpful comments.
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Pattanaik, P.K., Xu, Y. (2015). Rationality and Context-Dependent Preferences. In: Binder, C., Codognato, G., Teschl, M., Xu, Y. (eds) Individual and Collective Choice and Social Welfare. Studies in Choice and Welfare. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-46439-7_4
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DOI: https://doi.org/10.1007/978-3-662-46439-7_4
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