Pub. date: 2011 | Online Pub. Date: October 04, 2011 | DOI: 10.4135/9781412994163 | Print ISBN: 9781412959636 | Online ISBN: 9781412994163| Publisher:SAGE Publications, Inc.About this encyclopedia
Edward H. Stiglitz & Barry R. Weingast
Rational choice , or rationality , has two meanings. First, in a technical sense, rationality implies that an individual's preferences over choices possess two properties: completeness and transitivity. The first property holds that the individual's preferences are well defined for any two possible alternatives in the set of available choices: Given any pair of alternatives x and y , the individual prefers choice x over y , prefers choice y over x , or is indifferent between them. The second property maintains that if the individual prefers alternative x to y and y to z , then the individual prefers x to z . Most commonly, when scholars mention rational choice, they refer to the broad set of work—the rational choice school—that builds on this technical definition of rationality. Although derived, at the core, from this single technical definition of rationality, the rational choice school is commonly associated with a ...