TY - JOUR
T1 - Extended preferences and freedom of choice
AU - Baharad, Eyal
AU - Nitzan, Shmuel
PY - 2000
Y1 - 2000
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=0034373655&partnerID=8YFLogxK
U2 - 10.1007/s003550000045
DO - 10.1007/s003550000045
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AN - SCOPUS:0034373655
SN - 0176-1714
VL - 17
SP - 629
EP - 637
JO - Social Choice and Welfare
JF - Social Choice and Welfare
IS - 4
ER -