03s - Rationality in Economics Behavioral Postulate A...

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2011/2/27 1 3 Preferences 2 Rationality in Economics Behavioral Postulate: A decisionmaker always chooses its most preferred alternative from its set of available alternatives. So to model choice we must model decisionmakers’ preferences. 3 Preference Relations Comparing two different consumption bundles, x and y: strict preference: x is more preferred than is y. weak preference: x is as at least as preferred as is y. indifference: x is exactly as preferred as is y. 4 Preference Relations Strict preference, weak preference and indifference are all preference relations. Particularly, they are ordinal relations; i.e. they state only the order in which bundles are preferred.
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