Consistent preferences

Definition consistent preferences

This is often an important assumption of economics. The idea is that rational individuals choose consistently.

  • For example, if a consumer prefers A to B and B to C.
  • Then it follows that he must prefer A to C.

This assumption is based on the principle of revealed preferences.

However, in the real world, we can see irrational consumer behaviour and inconsistent behaviour.

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By on November 28th, 2012