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The Compatibility of Economic Rationality and General Rationality: Integrating Constraints on Beliefs and Preferences

Author

Listed:
  • Phoebe Koundouri
  • Nikitas Pittis

    (University of Piraeus, Greece)

  • Panagiotis Samartzis

Abstract

This paper examines the interplay between coherence-based rationality (Rationality-1), which ensures consistency in belief systems via propositional calculus, and preference-based economic rationality (Rationality-2), governed by axioms such as completeness and transitivity. In the standard propositional framework L, the Validity Consensus Property (VCP) - ensuring universal agreement on argument validity across different logical tests - holds universally. However, when the framework is extended to include preference propositions, forming Lp, the imposition of rationality constraints from Rationality-2 affects the semantics of Lp. These changes cause VCP to fail, meaning that agents using different logical tests may disagree on whether an argument is valid. Furthermore, in striving to satisfy the constraints of Rationality-2, an agent may accept conclusions that introduce contradictions into their belief system, thereby violating the consistency required by Rationality-1.

Suggested Citation

  • Phoebe Koundouri & Nikitas Pittis & Panagiotis Samartzis, 2025. "The Compatibility of Economic Rationality and General Rationality: Integrating Constraints on Beliefs and Preferences," DEOS Working Papers 2502, Athens University of Economics and Business.
    • Handle: RePEc:aue:wpaper:2502
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