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Inconsistency is not pathological: a pragmatic perspective

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  • Mario J. Rizzo

    (New York University)

Abstract

Both behavioral and standard neoclassical economists place a heavy emphasis on the consistency of preferences. In particular, transitive preferences are considered a desideratum. This paper attempts to show that consistency at the level of individual choice may be pragmatically irrelevant. Consistently following an environmentally adapted rule can result in intransitive preferences without negative consequences for individual or social goals. I give three examples of this. Social scientists should look at intransitivity of choices as a challenge to offer better explanations rather than as a normative defect.

Suggested Citation

  • Mario J. Rizzo, 2019. "Inconsistency is not pathological: a pragmatic perspective," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 18(1), pages 77-85, June.
    • Handle: RePEc:spr:minsoc:v:18:y:2019:i:1:d:10.1007_s11299-019-00211-6
    DOI: 10.1007/s11299-019-00211-6
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    References listed on IDEAS

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    1. Mario J. Rizzo, 2016. "F. A. Hayek and the Rationality of Individual Choice," Advances in Austrian Economics, in: Revisiting Hayek’s Political Economy, volume 21, pages 21-39, Emerald Group Publishing Limited.
    2. Richard H. Thaler & Cass R. Sunstein, 2023. "Libertarian paternalism," Chapters, in: Cass R. Sunstein & Lucia A. Reisch (ed.), Research Handbook on Nudges and Society, chapter 1, pages 10-16, Edward Elgar Publishing.
    3. Leo Katz, 2014. "Rational Choice versus Lawful Choice," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(1), pages 105-121, March.
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