This article reviews the concepts of individual rationality and collective rationality as they appear in the economics literature. In particular, the existing literature on social choice and aggregate demand points to a fundamental disconnect between these two notions of rationality. A possible reconciliation of this disconnect is suggested.
KeywordsAggregate demand Arrow’s impossibility theorem Collective choice Collective rationality Debreu–Mantel–Sonnenschein theorem Gibbard–Satterthwaite impossibility theorem Individual rationality Prisoner’s dilemma Rational choice Sen, A. Social choice Social welfare function Strategic behaviour
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