#WARP

reading MWG on WARP for fun, more or less after seeing that this axiom is debated by other scholars

WARP said that you can’t choose x (when there’re 2 choice x & y) while at the same time choose y (when there’re 3 choices x, y, & z)

it’s necessary if you wanted to be consistent: you can’t choose x and then choose y in a different situation with similar (not same) choices

It’s like, “I choose McD over KFC if only these 2 that are avaiable, but if there’s Pizza as well then I’d choose KFC”. Inconsistent!

It’s fundamental axiom in choice theory, yet studies show that this is not necessarily hold. At least 25% of people didn’t do this. Mistake?

Humans are not “econs”, we’ve limited abilities. Thus WARP is an overreaching axiom barely able to explain what humans really do.

 

PS: WARP (Weak Axiom of Revealed Preference), MWG (Mas-Colell, Winston, Green)