Reason vs. Rationality: From rankings to tournaments in individual choice

Abstract

The standard assumption in decision theory, microeconomics and social choice is that individuals (consumers, voters) are endowed with preferences that can be expressed as complete and transitive binary relations over alternatives (bundles of goods, policies, candidates). While this may often be the case, we show by way of toy examples that incomplete and intransitive preference relations are not only conceivable, but make intuitive sense. We then suggest that fuzzy preference relations and solution concepts based on them are plausible in accommodating those features that give rise to intransitive and incomplete preferences. Tracing the history of those solutions leads to the works of Zermelo in 1920’s.