Ken walks into a restaurant. WAITER: Good afternoon, sir. The specials today are roast lamb and baked

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Ken walks into a restaurant.

WAITER: Good afternoon, sir. The specials today are roast lamb and baked trout.

KEN: I’d like the lamb, please.

WAITER: I almost forgot. We also have lobster thermidor.

KEN: In that case, I’ll have the trout, please.

What standard property of decision-making is Ken violating? (Hint: reread the section on Arrow’s impossibility theorem.) Is Ken necessarily being irrational? (Hint:

what information is revealed by the fact that the chef is able to prepare lobster thermidor?)

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Economics

ISBN: 124344

2nd Edition

Authors: N. Gregory Mankiw

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