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3 - Formal Theories of Rational Choice

Published online by Cambridge University Press:  27 December 2025

Catherine Herfeld
Affiliation:
Leibniz Universität Hannover
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Summary

Coupa Cafe is a noisy place in the Graduate School of Business at Stanford University, so I worried that I would not be able to hear David Kreps (*1950). February had been rainy in California and sitting inside a crowded café shouting at each other about the potentials and limitations of choice theory did not appeal to me. But on the day of the interview, the air and the campus were heating up. We therefore stepped outside to have our coffee at one of the tables right in the heart of the business school. Kreps has taught here since 1975, after he finished his PhD in Operations Research at Stanford University. While he had started off as an economic theorist, I quickly realized in our conversation that parts of his research had become more applied in recent years. One reason for approaching Kreps was his well-known textbook Notes on the Theory of Choice, which had first prompted me to see that there exist different variants of rational choice theory in economics, which were rarely separated. Kreps makes clear that what he calls “choice theory” is clearly something conceptually different from standard utility theories that are part of a standard economics curriculum.

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References

References for Further Reading

Kreps, David (1988): Notes on the Theory of Choice, Boulder: Westview Press.Google Scholar
Kreps, David (1990): Game Theory and Economic Modelling, Oxford: Oxford University Press.CrossRefGoogle Scholar
Kreps, David and Porteus, Evan L. (1978): Dynamic choice theory and dynamic programming, Econometrica, 47, 91100.CrossRefGoogle Scholar

References for Further Reading

Gilboa, Itzhak (2009): Theory of Decision under Uncertainty, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Gilboa, Itzhak, Postlewaite, Andrew, Samuelson, Larry, & Schmeidler, David. (2018). Economics: Between prediction and criticism, International Economic Review, 59 (2), 367390.CrossRefGoogle Scholar
Gilboa, Itzhak, Postlewaite, Andrew, Samuelson, Larry, & Schmeidler, David (2019): What are axiomatizations good for? Theory and Decision, 86, 339359.CrossRefGoogle Scholar
Gilboa, Itzhak, Postlewaite, Andrew, & Schmeidler, David. (2009): Is it always rational to satisfy Savage’s axioms? Economics and Philosophy, 25, 285296.CrossRefGoogle Scholar

References for Further Reading

Dietrich, Franz, List, Christian (2013): A reason-based theory of rational choice, Noûs, 47 (1), 104134.CrossRefGoogle Scholar
Dietrich, Franz, List, Christian (2016a): Reason-based choice and context-dependence: An explanatory framework, Economics and Philosophy, 32 (2), 175229.CrossRefGoogle Scholar
Dietrich, Franz, List, Christian (2016b): Mentalism versus behaviourism in economics: A philosophy-of-science perspective, Economics and Philosophy, 32 (2), 249281.CrossRefGoogle Scholar

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