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The Review of Economic Studies, Ltd.

Choice Functions and Revealed Preference


Author(s): Amartya K. Sen
Source: The Review of Economic Studies, Vol. 38, No. 3 (Jul., 1971), pp. 307-317
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2296384 .
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Choice Functions and Revealed
Preference" ,2
AMARTYA K. SEN
Universityof Delhi

1. MOTIVATION
The objectof this paperis to providea systematictreatmentof the axiomaticstructure
of the theoryof revealedpreference. In particularit is addressedto the followingproblems
in revealedpreferencetheory.
(1) Much of revealedpreferencetheoryhas been concernedwith choicesrestrictedto
certaindistinguishedsubsetsof alternatives,in particularto a class of convex polyhedra
(e.g., " budgettriangles" in the two commoditycase). This restrictionmay have some
rationalefor analyzingthe preferencesof competitiveconsumers,but it makesthe results
unusablefor other types of choices,e.g., of governmentbureaucracies,of voters, of con-
sumersin an imperfectmarket. If the restrictionis removed,the axiomaticstructureof
revealed preferencetheory changes radically. This axiomatic structureis studied in
Sections2-5. In Section6 the rationaleof restrictingthe domainof choicefunctionsand
that of rationalityconditionsis criticallyexamined.
(2) Whilesome revealedpreferencetheoriesare concernedwith element-valuedchoice
functions(i.e., with choice functionsthe range of which is restrictedto unit sets), others
assumeset-valuedchoice functions. It is interestingto analyzethe problemgenerallyin
terms of set-valuedchoice functions and then study the consequenceof an additional
restrictionthat all choicesetsbe unitsets. Section7 is devotedto this additionalrestriction.
(3) Whilerevealedpreferencetheoryhas beenobsessedwith transitivity, certainweaker
requirements havecome to prominencein otherbranchesof choicetheory. It is interesting
to investigatethe conditionsthat guaranteethat a choice function is representableby a
binaryrelationof preferencewhetheror not that relationis transitive. Also the conditions
that ensuretransitivityof strictpreferencethoughnot necessarilyof indifferenceare worth
studying because of the relevanceof this case to demand theory (see Armstrong[1],
Majumdar[14], Luce [13], Georgescu-Roegen[7]) and to the theoryof collectivechoice
(see Pattanaik[15], Sen [18], Inada[11], Fishburn[4]). The axiomaticstructureof these
requirementsis studiedin Sections8-10. This also helps to achievea factorizationof the
conditionsfor full transitivity.

2. CHOICEFUNCTIONS AND BINARY RELATIONS


Let X be the set of all alternatives. For any subset S of X, a " choice set " C(S)
representsthe chosen elementsof S. A " choice function" is a functionalrelationthat
specifies a choice set C(S) for any S in a particulardomainK of non-emptysubsetsof X.
We can representa choicefunctionas C(.), or more loosely as C(S) takingS as a variable
withinK.
1 First versionreceivedMarch 1970; final versionreceivedNov. 1970 (Eds).
2 For commentsand criticismsI am most gratefulto Hans Herzbergerand Roy Radner.
307

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308 REVIEW OF ECONOMIC STUDIES
Definition1. A function C(.) that specifiesa non-emptychoice set for every non-
emptyset S in K is calleda choicefunctiondefinedover K.
It will be assumedfor the momentthat K includesall finitesubsetsof X. Thisassump-
tion will be examinedfurtherin Section6.
There are many alternativeways of generatingbinaryrelationsof preferencefrom
any choice function. Threedifferentones will now be introduced. The firstis that x is
" at least as good as " y if x is chosen wheny is available. This is to be denotedxRy.
Strictpreference(P) and indifference(I) are definedcorrespondingly.For all x, y in X:
Definition2. xRy if and only if for some S in K, x E C(S) and y E S.
Definition 3. xPy if and only if xRy and not yRx.
Definition 4. xIy if and only if both xRy and yRx.
A secondinterpretationcorrespondsto Uzawa's[19] and Arrow's[2] definitionof a
" relationgenerated" by the choice functionin terms of choice over pairs, and we shall
say xRy if x is chosen(not necessarilyuniquely)in a choice over the pair [x, y]. For all
x, y in X:
Definition 5. xRy if and only if x E C([x, y]).
Definition 6. xPy if and only if xRy and not yRx.
Definition 7. xly if and only if both xRy and yRx.
A thirdinterpretationcorrespondsto what Arrow[2] calls " revealedpreference"P.
We say xPy if x is chosenwheny is availableandrejected. We defineR andI correspond-
ingly. For all x, y in X:
Definition8. xPy if and only if thereis some S in K such that x E C(S) and
y E[S- C(S)].
Definition 9. xRy if and only if not yPx.
Definition 10. xIy if and only if xRy and yRix.
The contrastbetweenthe definitionsis illustratedin termsof an example.
Example 1. x = C([x, y]), y = C([y, z]),
x = C([x, z]), y = C([x, y, z]).
It follows from the definitionsthat:
(1) xIy, yPz, and xPz;
(2) xPy, yPz, and xPz;
(3) xPy, yPz, xPz, and yPx.
All the interpretations
have someproblem. R has the problemthatx andy aretreated
as indifferenteven thoughx is chosen and y rejectedover the pair [x, y]. R has, on the
otherhand,the problemthatx is declaredas strictlypreferredto y, eventhoughy is chosen
and x rejectedin the choiceoverthe triple[x, y, z]. However,R involvesthe problemthat
P is not asymmetric,and x is declaredpreferredto y and y to x. Anotherway of viewing
the problemin (3) is that R is not " complete" over [x, y}. On the otherhand, R and R
are alwayscompleteif K includesall finitesubsetsof X, or even if it only includesall pairs
in X.
It can be establishedthat for any C(S), (R = R) if and only if (P = P & I = I),
(K = R) if and only if (PP = = I), and (R = R) if and only if (P = P & I = I).
The proofsare straightforward.

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SEN CHOICEFUNCTIONS 309
3. IMAGE AND NORMALITY
Correspondingto each choicefunctionC(S) we may defineits " image" C(S) as the
choicefunctiongeneratedby the binaryrelationR revealedby C(S).
Definition 11. For any S in K, (S) = [x Ix E S and for all y in S, xRy].
That is C(S)consistsof the " best" elementsof S in termsof the relationR. Clearly,
C(S) c(S), since x E C(S) implies that for all y in S, xRy. But the conversemay not
hold as is clearfrom Example1.
Definition 12. A choice function C(S) is normal if and only if C(S) = (S) for all
S in K.
It is clear that a choice function being normalis equivalentto its being essentially
binaryin composition. Further,for a normalchoicefunction,R = R. But R = R does
not implythat the choicefunctionis normal. The last is clearfromthe followingexample.
Example 2. [x] = C([x, y]), [x, z] = C([x, z]), [z] = ([y, z]),
[x] = C([x, y, z]).
This implies xPy, xIz, zPy, and xPy, xlz, zPy. But [x, z] = ([x, y, z]). Note also that
a normal choice function does not guaranteethat R = R, thought the conversewill be
shownto be true (see T.3).

4. AXIOMS OF REVEALEDPREFERENCEAND CONGRUENCE


The concept of indirectrevealedpreferencediscussedby Houthakker[9] makes use
of the finiteclosureof P. Indirectrevealedpreferencein the " wide" sense (see Richter
[16]) is based on the finiteclosureof R.
Definition 13. For any pair x, y in X, x is indirectly revealedpreferred to y (denoted
xP*y) if and only if thereexistsin X a sequencexi, i = 0, ..., n, such that x0 = x, xn = y,
and for all i = 1, ..., n, xi- 1Pxi.
Definition 14. For any pair x, y in X, x is indirectlyrevealedpreferred to y in the wide
sense (denoted xWy) if and only if there exists in X a sequence xi, i = 0, ..., n, such that
x? = x, x' = y, and for all i = 1, ... n, x- 1Rx'.
The following conditionsof rationalityhave been much discussedin the literature.
For all x, y in X:
WEAK AXIOM OF REVEALED PREFERENCE (WARP):
If xPy, then not yRx.
STRONG AXIOM OF REVEALED PREFERENCE (SARP):
If xP*y, then not yRx.
STRONG CONGRUENCE AXIOM (SCA):
If xWy, then for any S in K suchthaty E C(S) and x E S, x mustalso belongto C(S).
WARP and SARP wererespectivelyproposedby Samuelson[17] and by Houthakker
[9], Ville [20] and von Neumannand Morgenstern[21], adaptedhere as in Arrow[2] to
correspondto set-valuedchoicefunctions. SCA is Richter's[16] " CongruenceAxiom ",
renamedto permita weak versionof it to be proposed,whichis done below.
WEAK CONGRUENCE AXIOM (WCA):
If xRy, then for any S in K such that y E C(S) and x E S, x must also belongto C(S).
(T.1). The Weak CongruenceAxiom implies that the revealedpreferenceR is an
ordering,and if the choicefunctionis normalthen the converseis also true.

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310 REVIEWOF ECONOMICSTUDIES
Proof Since the domain of the choice function includesall finite sets, R must be
completeand reflexive. To prove that WCAimpliesthe transitivityof R take any triple
T = [x, y, z] such that xRy and yRz. In viewof WCA if z E C(T), then y E C(T), and if
y E C(T) then x E C(T). But at least one of x, y and z must be in C(T). Hencex E C(T)
and thus xRz. R is, therefore,transitive.
To show the converse,for any S in K, let y E C(S), x E S and xRy. Clearly,yRz for
all z in S, and in view of xRy and the transitivityof R, xRz for all z in S. Thus x E C(S).
And sincethe choicefunctionis normal,x E C(S). HenceWCA holds.
While WCA seems necessaryand sufficientfor an ordinalpreferencestructure,the
sameresultis guaranteedby the convergenceof R and .
(T.2). The Weak CongruenceAxiom holds if and only if R = R.
Proof. Let WCA be violated. Evidentlyfor some S in K, for some x, y E S, while
y E C(S) and xRy, x does not belong to C(S). ObviouslyyPx, so that not xRy. Thus
R # R, and thereforeR = R impliesWCA.
To show the converseit is noted that xRy implies not yFx, which guaranteesthat
x E C([x, y]) and thereforexRy. On the otherhand,not xAy impliesy.Pxso that for some
S in K, we have y E C(S) and x E [S- C(S)]. If it is now assumedthat xRy, then WCA
will be violated,and thereforenot xRy. ThusWCA impliesR = R.

5. EQUIVALENCEOF AXIOMS
This equivalencecan be extendedto cover all the " rationality"conditionsproposed
so far.
(T.3). The followingconditionsare equivalent:
(i) R is an orderingand C(S) is normal;
(ii) R is an orderingand C(S) is normal;
(iii) Weak CongruenceAxiom;
(iv) StrongCongruenceAxiom;
(v) WeakAxiom of RevealedPreference;
(vi) StrongAxiom of RevealedPreference;
(vii) R = R;
and (viii) R = R and C(S) is normal.
Proof. The equivalenceof (i) and (ii) is immediatesince C(S) being normalimplies
R = R.
From(T.1), (i) implies(iii) and (iii) impliesthat R is an ordering. The equivalenceof
(i) and (iii) is completedby showingthat WCA guaranteesthe normalityof the choice
function. Since C(S)c= (S), it is sufficient to show that WCA implies that C(S)(c C(S).
Let y E C(S) while x E (S). Obviously xRy, and hence by WCA, x E C(S).
By definition(iv) implies(iii). To prove the converseassumethat WCA holds and
the antecedent of SCA holds, i.e., y E C(S), x E S, and xWy. Since y E C(S), yRz for all
z in S. Using the notationof Definition14, if x" 'Py, then xn-l'Rz for all z in S since R
is transitivegivenWCA. Thus xn-1 E Q(s'), whereS' is the union of S and the unit set
[xn-1]. Hence xn 'Py implies that xn-1 E C(S'). If, on the other hand, yIxn 1, then
y e Q(S') since y eC(-S). Thus by normalityy c C(S), and by WCA, xn'-e C(S1).
Similarlyxn-2 E C(S2) whereS2 is the union of S' and the unit set [xn-2]. Proceedingthis
way x = x is in the choice set of s'. But if x is in C(S'), then x E C(S), since SC Sn.
Hencex E C(S) and SCA musthold.

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SEN CHOICE FUNCTIONS 311

Next the equivalence of (iii) and (v). If WARP is violated, then for some x, y E X,
we have xPy and yRx. Since xPy implies that there is an S in K such that x E C(S), y E S,
and y is not in C(S), WCA must be false in view of yRx. Thus WCA implies WARP.
Conversely, let WCA be violated. Then for some x, y e S we have xRy, when y is in C(S)
but x is not in C(S). Evidently xRy and yPx. This is a violation of WARP.
Next, (vi) is taken up. Obviously, (vi) implies (v), since SARP subsumes WARP. On
the other hand, by (T. 1), WCA implies that R is an ordering. Hence WARP, which is
equivalent to WCA, implies that R is an ordering. But by (T.2), R = R in view of WCA.
Hence WARP guarantees that R is an ordering and that xP*y implies xPy for all x, y in X.
But then WARP implies SARP.
Equivalence of (vii) and (iii) is given by (T.2) and that of (viii) and (vii) follows from
the fact that R = R whenever C(S) is normal. This establishes (T.3).
This demonstration of the complete equivalence of all the rationality conditions pro-
posed so far would seem to complete a line of enquiry initiated by Arrow [2] who proved
the equivalence of (ii), (v) and (vi).' Some of the results contained in (T.3) have apparently
been denied and it is worth commenting on a few of the corners. For example, Richter
[16], who has proved the equivalence of SCA and (i), has argued that " it can be shown that
the Congruence Axiom does not imply the Weak Axiom [of revealed preference] and hence
not the Strong" (p. 639). But the difference seems to arise from the fact that Richter
applies Samuelson's and Houthakker's definition of the revealed preference axioms, which
are made with the assumption of element-valued (as opposed to set-valued) choice functions,
to a case where there are a number of best elements in the set (Richter [16], Figure 2, p. 639).
Similarly, Houthakker's [9] argument for the necessity of bringing in the Strong Axiom
of Revealed Preference, rather than making do with the Weak Axiom, arises from the fact
that Houthakker considers a choice function that is defined over certain distinguished sets
only, viz., a class of convex polyhedra representingbudget sets, and which is undefined over
finite subsets of elements. The same is true of Gale's [6] demonstration that WARP does
not imply SARP in a rejoinder to Arrow's paper [2].
Finally, it may be noted that rationality may be identified with the systematic converg-
ence of different interpretations of the preference revealed by a choice function. As is
clear from (T.3), R = R implies complete rationality in the sense of transitivity and normal-
ity, and so does R = R if the choice function is normal. That a primitive concept like the
coincidence of different interpretations of revealed preference can be taken to be a complete
criterion of rationality of choice is of some interest in understanding this problematic
concept.

6. THE DOMAIN OF THE CHOICE FUNCTION AND


THE RATIONALITY AXIOMS
It is conventional to assume in revealed preferencetheory that the domain of the choice
function includes only the class of convex polyhedras that represent " budget sets " in
some real (commodity) space, e.g. " budget triangles " in the two-commodity case. In
contrast it has been assumed here that the domain includes all finite subsets of X whether
or not it includes any other subset. The difference is significant for Arrow's [2] result on
the equivalence of the " weak " and the " strong " axioms of revealed preference and more
generally for the set of equivalences established here in (T.3).
Evidently if there is some argument for confining the domain to the budget polyhedras
it applies to the study of the competitive consumer and not to choices of other agents, e.g.,
a non-competitive consumer, a voter or a government bureaucracy. But does it make sense
even for the competitive consumer? The question deserves a close examination.
1 Some weakerrationalityconditionswill be discussedin the following sections of the paper. See also
Herzberger[8] for a vast collection of resultsinvolvingsome rationalityaxioms not covered here.

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312 REVIEW OF ECONOMIC STUDIES

It is certainly the case that the observed behaviour of the competitive consumer will
include choices only over budget sets. What can then be the operational significance, it
might be asked, of including other subsets in the domain of the choice function? The
significance lies in the fact that the interpretation of observed choices will depend on
whether it is assumed that the rationality axioms would hold over other potential choice
situations as well even though these choices cannot be observed in the competitive market.
For example if it is assumed that the Weak Congruence Axiom would hold over finite
subsets as well, then the observation that x is chosen when y is available in the budget set
and y is chosen when z is in the budget set can be used as a basis for deducing that x is
regarded as at least as good as z even without observing that x is chosen when z is available.
This is because by (T.2) WCA defined over all finite subsets implies that R is transitive.
Thus the interpretationof observed choices will vary with what is assumed about the applic-
ability of the rationality axioms to unobserved choices.
Thus a real difference with operational significance is involved. But it may be argued
that if some choices are never observed how can we postulate rationality axioms for these
choices since we cannot check whether the rationality axioms assumed would hold? This
problem raises important questions about the methodological basis of revealed preference
theory. In particular the following two questions are relevant.
(1) Are the rationality axioms to be used only after establishing them to be true?
(2) Are there reasons to expect that some of the rationality axioms will tend to be
satisfied in choices over " budget sets " but not for other choices?
Suppose a certain axiom is shown to guarantee some rationality results if the axiom
holds over every element in a certain class of subsets of X, i.e., over some domain K* c K.
In order to test this axiom before using, we have to observe choices over every element of
K*. Consider K* as the class of budget sets. We know that any observed choice will be
from K* in the competitive market, but this is not the same thing as saying that choice from
every element of K* will, in fact, be observed. There are an infinite (and uncountable)
number of budget sets even for the two-commodity case and choices only over a few will
be observed. What is then the status of an axiom that is used in an exercise having been
seen to be not violated over a certainproper subset of K*? Clearly it is still an assumption
rather than an established fact. There is, of course, nothing profound in this recognition,
and it is in the nature of the theory of revealed preferencethat the exercise consists of taking
axioms in the strictly logical sense and then deriving analytical results assuming these
axioms to be true. But then the question arises: why assume the axioms to be true only
for " budget sets " and not for others? Such results as the non-equivalence of the " weak"
and the " strong " axioms relate to this issue.
This takes us to question (2). Are there reasons to expect the fulfilment of these
axioms over budget sets but not over other subsets of K? No plausible reasoning seems to
have been put forward to answer the question in the affirmative. The differencelies in the
ability to observe violation of axioms and not in any inherent reason to expect violations
in one case and not in the other. But even for K* not all choices will be observed Why
then restrict the domain of an axiom to K* only and not to entire K when (a) verification
is possible in fact neither for K nor for K*, and (b) there are no a priori reasons to expect
the axiom to hold over K* but not over (K- K*)?
The validity of the theorems obtained does not, of course, depend on whether we find
the above line of argument to be convincing, but the importance of the results clearly does,
especially for demand theory.
Two final remarksmay be made. First, while it is not requiredthat the domain includes
all infinitesets as well, nothing would of course be affected in the results and the proofs even
if all infinite sets are included in the domain. Second, it is not really necessary that even
all finite sets be included in the domain. All the results and proofs would continue to hold
even if the domain includes all pairs and triples but not all finite sets.

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SEN CHOICE FUNCTIONS 313

7. ELEMENT-VALUED CHOICE FUNCTIONS


Much of revealed preference theory has been concerned with element-valued choice
functions. Certain special results are true for such functions.
(T.4). A choice function the range of which is restricted to the class of unit sets is
normal if and only if R is an ordering.
Proof Let C(S) be normal. For some x, y, z in X let xRy & yRz. Hence xRy & yRz
since C(S) is normal, and xPy & yPz as the choice sets are unit sets. Thus xPy & yPz
due to normality. If we now take [z] = C([x, z]), then zPx, but that will make C([x, y, z])
empty. Since this is impossible, [x] C([x, z]), and hence xPz. Thus R is transitive.
It is obvious that choice sets being unit sets would imply P = R = P. And if R is
an ordering, R = R, and this implies that the choice function is normal by (T.3).
Consider now a weak property of rationality originally introduced by Chernoff [3].
PROPERTY ae. For any pair of sets S and T in K and for any x E S, if x E C(T) and
Sc T, then x e C(S).
That is, if x is " best " in a set it is best in all subsets of it to which x belongs.
(T.5). Any normal choice function satisfies Property ae.
Proof. Let x E C(T). Then xRy for all y in T. If Sc T, then xRy for all y in S.
Thus, x e 0(S). By normality x e C(S).
(T.6). A choice function the range of which is restricted to the class of unit sets satisfies
Property ocif and only if it satisfies WCA.
Proof WCA implies normality and by (T.5) this implies Property oc. Regarding the
converse it is sufficient to show that a implies that the antecedent of WCA must always
be false. If it were not false, then for some S, x e S, y E C(S) and xRy. Since y e C(S)
and x e S, by Property ae,y e C([x, y]). On the other hand, since xRy, obviously for some
H such that y E H, x belongs to C(H). Then by ac,x E C([x, y]). But this is impossible
since C([x, y]) must be a unit set.
As a corollary to (T.6) it is noted that for element-valued choice functions Property a
implies all the conditions covered in (T.3).'

8. TRANSITIVITY AND FACTORIZATION


For element-valued choice functions Property a implies complete rationality, but what
does ccimply in general? Not even normality as is clear from Example 2 in Section 3, but
it does guarantee that R = R.
(T.7). For any choice function Property a implies R R.
Proof. xRy implies xRy by definition. With xRy we know that for some S in K,
x E C(S) and y E S. By oc,x E C([x, y]). Hence xRy.
How can a be supplemented in the general case to get complete rationality? Property
,Bwas introduced for this purpose (see Sen [18]).
PROPERTYP3. For all pairs of sets S and T in K and for all pairs of elements x and y
belonging to C(S), if Scz T, then x E C(T) if and only if y E C(T).
That is, if x and y are both best in S, a subset of T, then x is best in T if and only if
y is best in T.
1 For a directproof that for element-valuedchoice functionsx is equivalentto condition (v) in (T. 3),
see Houthakker[10].

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314 REVIEW OF ECONOMIC STUDIES

(T.8). A choice function satisfies the Weak Congruence Axiom if and only if it satisfies
Properties a and P.
Proof By (T.3), WCA implies normality, which in turn implies a, by (T.5). Let P be
violated with x but not y belonging to C(T). But since x e S and y e C(S), we have yRx.
This is a violation of WCA. Thus WCA implies a and ,Bboth.
Now the converse. Let the antecedent of WCA hold, and for some S, x e S, y e C(S)
and xRy. By oc,y e C([x, y]). Since xRy, for some H, x E C(H) and y E H. By a,
x E C([x, y]). Thus [x, y] = C([x, y]). But then by ,B,y E C(S) if and only if x e C(S).
Since y is, in fact, in C(S), so must be x. Thus WCA must hold and it is shown that a and
,Btogether imply WCA.
A corollary to (T.8) is that a and ,Btogether imply all the conditions listed in (T.3) and
thus amount to complete rationality in the usual sense.

9. AXIOMS FOR NORMALITY AND BINARINESS


Properties a and ,B imply normality and transitivity of R. What implies normality
alone?
PROPERTY y. Let M be any class of sets chosen from K and let V be the union of all
sets in M. Then any x that belongs to C(S) for all S in M must belong to C(V).
That is, if x is best in each set in a class of sets such that their union is V, then x must
be best in V.
(T.9). A choice function is normal if and only if it satisfies Properties a and y.
Proof. Let C(S) be normal. By (T.5) it satisfies Property oc. Let the antecedent of
Property y be fulfilled. Thus xRy for all y in V. Hence x E C(V). But since C(S) is normal,
x E C(V). Hence Property y is also satisfied.
To prove the converse let x belong to C(V). Thus xRy for all y in V. By (T.7), xRy
for all y in V. Therefore, x E C([x, y]) for all y in V. Therefore by Property y, x E C(V).
Hence C(S) is normal.'

10. AXIOMS FOR QUASI-TRANSITIVITY


An intermediate property between normality alone and that with full transitivity is
normalitycoupled with " quasi-transitivity" of revealed preference(see Sen [18]). Armstrong
[1] had shown the plausibility of intransitive indifference combined with transitive strict
preference. This possibility has been discussed furtherby Georgescu-Roegen [7], Majumdar
[14] and others in the context of demand theory, and by Pattanaik [15], Sen [18], Inada [11],
Fishburn [4] and others in the context of the theory of collective choice.
Luce [12], [13] has studied extensively the case of " semi-orders " which is a special
case of quasi-transitivity.2 Our concentration here will be on the more general condition.
What guarantees quasi-transitivity as such?
1 For any finite class K propertiesa nd y can be redefinedin terms of pairs of sets in the following
way.
For all X and Y in K:
Property oc*: C(X U Y)' [C(X) U C(Y)];
Propertyy*: [C(X) n c(Y)] C c(x u Y).
It is clear that a* amounts to cx,and y is the finite closure of y*. This formulationbrings out the com-
plementarynatureof the two propertiesin an illuminatingway and I am gratefulto Hans Herzbergerfor
drawingmy attentionto this.
2 The axiomatic structureof semiordershas recently been subjectedto a searchingexaminationby
Dean Jamisonand LawrenceLau in " Semiorders,Revealed Preference,and the Theory of the Consumer
Demand", Technical Report No. 31, Institute for Mathematicalstudies in the Social Sciences,Stanford
University,July 1970, presentedat the World EconometricCongressin Cambridge,September1970.

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SEN CHOICEFUNCTIONS 315
PROPERTY 6. For any pairof finitesets S, T in K, for any pairof elementsx, y e C(S),
if Sc T, then [x] # C(T).
Thatis, if x andy areboth bestin S, a subsetof T, thenneitherof themcanbe uniquely
best in T. However,unlikein the case of Propertyf, it is not requiredthat if one of x and
y is best in T, then so shouldbe the other.

______________________________________ _ -
_i quasi-transitivity

transitivity

normal C(S)

R ~ ~ ~ RR7

WCA 4 -- SCA 4 - SARP * WARP

Diagram

(T.10). For a normalchoice function,R is quasi-transitive(i.e. strictP is transitive)


if and only if Property6 is satisfied.
Proof. Let xPy and yPz hold. If not xRz, then C([x, y, z]) will be empty,whichis
impossiblesince C(S) is normal. HencexRz. If xIz, then [x, z] = C([x, z]). Propertya
will now imply that x shouldnot be uniquelybest in [x, y, z], but we know that
[x] = ([x, y, z]).
This is a contradictionsince C(S) is normal. HencexPz. So R is quasi-transitive.
To prove the converselet 6 be violated, and in spite of the antecedentholding, let
[x] = C(T). Sincey e C(S),yRx holds, so thaty can fail to belongto (T) only if somez'
in T exists such that z'Py. But z1 does not belong to C(T) = (T), so that there exists

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316 REVIEWOF ECONOMICSTUDIES
z2 z2pzl, and by quasi-transitivity z2py. Obviously,z2 9 x, sinceyRx, and thereexists
z3 : z3pz2. Proceedingthis way we get a sequencez1, z2, ... zn, such that zi # x and
zi + lpzi, for i = 1, .. ., n-I, andsuchthatall elementsof T otherthanx andy areexhausted.
If xPZ, then by quasi-transitivity xPy. This is impossibleand hencezn E C(T). But
this is a contradictionsince[x] = C(T).'
Finally, the main results presentedin the paper are representedin an Implication
Diagramwith the directionof the arrowrepresentingthat of implication.

REFERENCES
[1] Armstrong, W. E. "The Determinateness of the Utility Function ", Economic
Journal, 49 (1939).
[2] Arrow, K. J. "Rational Choice Functions and Orderings ", Economica, N.S., 26
(1959).
[3] Chernoff, H. "Rational Selection of Decision Functions ", Econometrica, 22
(1954).
[4] Fishburn, P. C. " Intransitive Individual Indifference and Transitive Majorities ",
Econometrica, 38 (1970).
[5] Fishburn, P. C. "Intransitive Indifference in Preference Theory: A Survey",
OperationsResearch, 18 (1970).
[6] Gale, D. " A Note on Revealed Preference ", Economica, 27 (1960).
[7] Georgescu-Roegen, N. "Threshold in Choice and the Theory of Demand ",
Econometrica,26 (1958).
[8] Herzberger, H. " Ordinal Choice Structures ", mimeographed, 1968; revised
version to be published in Econometrica.
[9] Houthakker, H. S. "Revealed Preference and Utility Function ", Economica,
N.S., 17 (1950).
[10] Houthakker, H. S. " On the Logic of Preference and Choice ", in A. Tymieniecka,
Contributionsto Logic and Methodology in Honor of J. M. Bochenski (North-Holland,
Amsterdam, 1956).
[11] Inada, K. " Majority Rule and Rationality ", Journal of Economic Theory,2 (1970).
[12] Luce, R .D. " Semiorders and a Theory of Utility Discrimination ", Econometrica
24 (1956).
[13] Luce, R. D. IndividualChoice Behaviour(Wiley, New York, 1958).
[14] Majumdar, T. The Measurementof Utility (Macmillan, London, 2nd ed., 1962).
[15] Pattanaik, P. " A Note on Democratic Decisions and the Existence of Choice Sets ",
Review of Economic Studies, 35 (1968).
[16] Richter, M. K. " Revealed Preference Theory ", Econometrica,34 (1966).
[17] Samuelson, P. A. "A Note on the Pure Theory of Consumers' Behaviour",
Economica, N.S., 5 (1938).
[18] Sen, A. K. " Quasi-transitivity, Rational Choice and Collective Decisions ", Review
of Economic Studies, 36 (1969).
1 It may be observedthat Property8 can be apparentlyrelaxedto 8* to requirethat the statedcondition
should hold for all triples T and subsets S thereof, ratherthan for all finite sets S and T. From the proof
of (T. 10) it is seen that for a normalchoice function 8* is sufficientto guaranteequasi-transitivity,but then
by (T. 10) 8* guarantees8, and thus no real relaxationis involved.

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SEN CHOICE FUNCTIONS 317

[19] Uzawa, H. " A Note on Preference and Axioms of Choice ", Annals of the Institute
of Statistical Mathematics, 8 (1956).
[20] Ville, J. " Sur les conditions d'existence d'une ophelimite totale et d'un indice du
niveau des prix ", Annales de l'Universite'de Lyon, 9 (1946).
[21] von Neumann, J., and Morgenstern, 0. Theory of Games and Economic Behaviour
(Princeton University Press, Princeton, 1944).
[22] Wold, H. 0. A. Demand Analysis (Wiley, New York, 1963).

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