- noun the way in which preferences are transferred logically. If product X is preferred to product Y and product Y is preferred to product Z, then it follows that product X is preferred to product Z.
- (written as Transitivity)The axioms of all utility theories include this one, to the effect that if entity A is preferred or indifferent to entity B, and entity B is preferred or indifferent to entity C, then A will be preferred or indifferent to C. This axiom may seem to characterize something that is rational but individuals commonly violate it in experiments. It depends on what you regard as rational. For example, in a series of choices I might choose a large apple over a banana, and a banana over a small apple, but a small apple over a large apple (so as not to appear greedy). It is not clear why such preferences ought to be seen as irrational.