CHAPTER 6 Rationality and Intransitive Preference

Abstract

Abstract This chapter provides an overview of what has been called by philosophers the “modern view“ of formal rational choice by focussing on the arguments relating to rational agency and transitive (intransitive) preference. In particular it demonstrates that the logical and semantic arguments are either question‐begging or incomplete. Suggesting that static and dynamic justifications of transitivity are essentially distinct, it identifies a number of problems with the standard money‐pump argument that purports to show why rational agents' preferences are necessarily constrained to have the transitivity property. Subsequently, constructive examples indicating how and when rational agents would want to exhibit intransitive preferences are discussed and finally some of the more recent explicitly game‐theoretic treatments of the argument are discussed. It concludes by suggesting that expected utility should be regarded as a model of context‐free choice, and that a wide range of more general models with the ability to reflect the structure of preference should be seen as modelling rational phenomena.