The Collapse of Indifference: A Unified Framework for Behavioral Engagement

Jo M. Sekimonyo and Tara Casimir

MPRA Paper from University Library of Munich, Germany

Abstract: This paper challenges the continued reliance on preference-based rational choice as the foundation of economic analysis. Traditional models assume that individuals continuously rank alternatives and act to maximize utility, yet a substantial body of empirical and experimental evidence shows behavior marked by inertia, impulsivity, and context dependence. Building on, but moving beyond, bounded rationality and prospect theory, this paper proposes Indifference Theory, grounded in a Propensity to Act (Pa) framework, as an alternative foundation for modeling action. The model reconceptualizes decision-making as threshold-based rational minimization of indifference. Individuals remain inactive when the margin of action, or indifference margin, is non-negative (Pa ≥ 0) and act only when it becomes negative (Pa

Keywords: Indifference; theory; Propensity; to; act; Behavioral; economics; Threshold; models; Decision-making; Inertia; Rational; choice (search for similar items in EconPapers)
JEL-codes: B5 D2 E2 H0 O3 (search for similar items in EconPapers)
Date: 2026
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