Rational preference and rationalizable choice

Abstract

We study a decision maker characterized by two binary relations. The first reflects his judgments about well-being, his mental preferences. The second describes the decision maker’s choice behavior, his behavioral preferences. We propose axioms that describe a relation between these two preferences, so between mind and behavior, thus disentangling two different perspectives on preferences: a description of tastes (and attitudes) and a way to organize behavioral data. We obtain two representations: one in which mental preferences uniquely determine choice behavior, another for which mental preferences direct behavior but room remains for biases and framing effects. Our results also provide a foundation for a decision analysis procedure called robust ordinal regression and proposed by Greco et al. (Eur J Oper Res 191:416–436, 2008).