Preference theory studies the fundamental aspects of individual choice behavior, such as how to identify and quantify an individual's preferences over a set of alternatives, and how to construct appropriate preference representation functions for decision making. An important feature of preference theory is that it is based on rigorous axioms which characterize individual's choice behavior. These preference axioms are essential for establishing preference representation functions, and provide the rationale for the quantitative analysis of preference.
Preference theory provides the foundation for economics and the decision sciences. A basic topic of microeconomics is the study of consumer preferences and choices (Kreps, 1990). In decision analysis and operations research, knowledge about the decision maker's preference is necessary to establish objective (or preference) functions that are used for evaluating alternatives. Different decision makers usually have different...
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