Much of current micro economic theory and formal political science is based on the notion of thin rationality. This concept refers to the behavioral principle stating that rational people act according to their preferences. More precisely, a rational individual chooses A rather than B just in case he/she (hereafter he) prefers A to B. Provided that the individual’s preference is a binary, connected and transitive relation over alternative courses of action, we can define a utility function that represents the individual’s preferences so that when acting rationally - i.e. in accordance with his preferences - he acts as if he were maximizing his utility. When considering risky alternatives, i.e. probability mixtures of certain outcomes, similar representation theorem states that the individual’s preferences can be represented as a utility function with an expected utility property. These utility functions assign risky prospects utility values than coincide with weighted sums of the utility values of those outcomes that may materialize in the prospect. The weights, in turn, are identical with the probabilities of the corresponding outcomes.
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- Thin Rationality and Representation of Preferences with Implications to Spatial Voting Models
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