Nontransitive Preferences and Stochastic Rationalizability: A Behavioral Equivalence

Mogens Fosgerau and John Rehbeck

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Abstract: Nontransitive choices have long been an area of curiosity within economics. However, determining whether nontransitive choices represent an individual's preference is a difficult task since choice data is inherently stochastic. This paper shows that behavior from nontransitive preferences under a monotonicity assumption is equivalent to a transitive stochastic choice model. In particular, nontransitive preferences are regularly interpreted as a strength of preference, so we assume alternatives are chosen proportionally to the nontransitive preference. One implication of this result is that one cannot distinguish ``complementarity in attention" and ``complementarity in demand."

Date: 2023-04
New Economics Papers: this item is included in nep-dcm, nep-des, nep-mic and nep-upt
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Citations: View citations in EconPapers (3)

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