Assumption of Transitive Preferences
The assumption of transitive preferences is the assumption that if a is preferred to b and b is preferred to c then a is preferred to c.
Using the example from EconPort (reference below):
If a is one apple and one mango and b is one orange and one carrot and c is one banana and one carrot, then transitivity would assert that if “I like one apple and one mango at least as well as one orange and one carrot” and “I like one orange and one carrot at least as well as one banana and one carrot” then “I like one apple and one mango at least as well as one banana and one carrot.”
Atlas topic, subject, and course
EconPort, Preferences, at http://www.econport.org/content/handbook/consumerdemand/choices/preferences.html, accessed 18 May 2016.
Page created by: Ian Clark, last modified 18 May 2016.