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Extended preferences and freedom of choice

Author

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  • Shmuel Nitzan
  • Eyal Baharad

Abstract

The common choice theory in economics is based on the assumption that an individual is defined in terms of a binary preference relation. This preference relation is defined over alternatives without taking into account menu dependence and, in particular, freedom of choice or, more generally, the set that contains the alternatives. In this study we clarify the nature and the significance of freedom of choice which may positively or negatively affect the individual's welfare. Our proposed extended preference relation of the individual takes into account both the particular alternative and the opportunity set that he faces. This extended relation does not induce ranking of opportunity sets. Its restriction to a particular opportunity set is the paradigmatic preference relation and it can capture the dependence of preferences on freedom of choice. Our main result establishes the inconsistency between dependence of extended preferences on freedom of choice and the existence of a utility that represents the paradigmatic preference relation and any of its restrictions.

Suggested Citation

  • Shmuel Nitzan & Eyal Baharad, 2000. "Extended preferences and freedom of choice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(4), pages 629-637.
    • Handle: RePEc:spr:sochwe:v:17:y:2000:i:4:p:629-637
    Note: Received: 30 December 1997/Accepted: 6 September 1999
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    Citations

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    Cited by:

    1. Baharad, Eyal & Nitzan, Shmuel, 2003. "Essential alternatives and set-dependent preferences--an axiomatic approach," Mathematical Social Sciences, Elsevier, vol. 45(2), pages 121-129, April.
    2. Suzumura, Kotaro & Xu, Yongsheng, 2003. "Consequences, opportunities, and generalized consequentialism and non-consequentialism," Journal of Economic Theory, Elsevier, vol. 111(2), pages 293-304, August.
    3. Yukinori Iwata, 2009. "Consequences, opportunities, and Arrovian impossibility theorems with consequentialist domains," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 32(3), pages 513-531, March.
    4. Lanzi, Diego, 2011. "Frames as choice superstructures," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(2), pages 115-123, April.
    5. Diego Lanzi, 2010. "Embedded choices," Theory and Decision, Springer, vol. 68(3), pages 263-280, March.
    6. Houy, Nicolas, 2004. "Corrigendum to "Essential alternatives and set-dependent preferences: a corrigendum" [Mathematical Social Sciences 45(2003)121-129]," Mathematical Social Sciences, Elsevier, vol. 47(3), pages 389-392, May.
    7. Fabrice Le Lec & Benoît Tarroux, 2012. "On attitude towards choice - Some experimental evidence of choice aversion," Economics Working Paper Archive (University of Rennes & University of Caen) 201230, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    8. Iwata, Yukinori, 2007. "A variant of non-consequentialism and its characterization," Mathematical Social Sciences, Elsevier, vol. 53(3), pages 284-295, May.
    9. Kobi Kriesler & Shmuel Nitzan, 2008. "Is Context-Based Choice due to Context-Dependent Preferences?," Theory and Decision, Springer, vol. 64(1), pages 65-80, February.
    10. Xu, Yongsheng, 2003. "On ranking compact and comprehensive opportunity sets," Mathematical Social Sciences, Elsevier, vol. 45(2), pages 109-119, April.
    11. Kobi Kriesler & Shmuel Nitzan, 2006. "Increasing sales by introducing non-salable items," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 631-641.

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