Transitivity and dominance : normative and empirical position of two cornerstones of economic models of decision-making

Abstract

Transitivity and dominance are key concepts built deep into the fundaments of most economic models of decision-making. One of the arguments in favour of using the two concepts is that they are normative, i.e., symptomatic of perfect, rational decision-making.

This paper describes several specific axioms stemming from these concepts and appearing in axiomatic models of decision-making, gives possible arguments speaking for or against the normativeness of a given concept and adds examples of empirically observed violations of the concept by human decision-making. In the conclusion, it offers an assessment of whether the use of transitivity and dominance in economic models of decision-making is justified or not.

Keywords

• Transitivity
• dominance
• normative
• empirical
• position
• cornerstones
• economic
• models
• decision-making