Choice, Rationality And Welfare Measurement

The authors present a method for evaluating the welfare of a decision maker, based on observed choice data. Unlike the standard economic theory of revealed preference, the method can be used whether or not the ob-served choices are rational. Paralleling the standard theory they present a model for choice such that the observations arise "As if" they were the result of a specific decision making process. However, in place of the usual preference relation whose maximization induces the observations, they explain choice as arising from a compromise among a set of simultaneously-held, conflicting preference relations.