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A canon of probabilistic rationality
Univ Bocconi, Milan, Italy.;IGIER, Milan, Italy..
KTH.
Univ Bocconi, Milan, Italy.;IGIER, Milan, Italy..
Univ Bocconi, Milan, Italy.;IGIER, Milan, Italy..
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2021 (English)In: Journal of Economic Theory, ISSN 0022-0531, E-ISSN 1095-7235, Vol. 196, article id 105289Article in journal (Refereed) Published
Abstract [en]

We prove that a random choice rule satisfies Luce's Choice Axiom if and only if its support is a choice correspondence that satisfies the Weak Axiom of Revealed Preference, thus it consists of alternatives that are optimal according to some preference, and then random choice occurs according to a tie-breaking mechanism among such alternatives that satisfies Renyi's Conditioning Axiom. Our result shows that the Choice Axiom is, in a precise formal sense, a probabilistic version of the Weak Axiom. It thus supports Luce's view of his own axiom as a "canon of probabilistic rationality."

Place, publisher, year, edition, pages
Elsevier BV , 2021. Vol. 196, article id 105289
Keywords [en]
Random choice, Weak axiom of revealed preferences, Choice axiom
National Category
Economics
Identifiers
URN: urn:nbn:se:kth:diva-301979DOI: 10.1016/j.jet.2021.105289ISI: 000693029400019Scopus ID: 2-s2.0-85108103547OAI: oai:DiVA.org:kth-301979DiVA, id: diva2:1594884
Note

QC 20210916

Available from: 2021-09-16 Created: 2021-09-16 Last updated: 2022-06-25Bibliographically approved

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