Features

• Presents a unified perspective of rational choice theory
• Shows that different branches of rational choice theory are more deeply and more horizontally connected than is generally realized
• Demonstrates that the principle of no-arbitrage remains applicable and useful in situations where many of the usual axioms do not apply
• Includes end of chapter exercises and excel spreadsheets

Summary

Adapted from the author’s course notes, this book provides a technically rigorous and unified perspective on rational choice theory from the viewpoint that the most basic and universal axiom of rationality is the principle of no-arbitrage. The book goes on to demonstrate that the principle of no-arbitrage remains applicable and useful in situations where many of the usual axioms do not apply and dramatizes the assumptions implicit in rational choice models. It provides an accessible though unabashedly idiosyncratic tour of the broad field.