An empirical investigation into the validity of transitivity and non-satiety assumptions in partial order structures: A note

Recent research in the area of information acquisition has been based on two key assumptions, namely, nonsatiety (implying more is preferable to less) and transitivity (implying that if A is preferred to B and B to C then A will be preferred to C). While at first glance these assumptions do not seem altogether unjustifiable, they do, in practice, constrain the empirical application of the research models. The primary purpose of this paper is to test the validity of these two key assumptions underlying most theoretical research in information acquisition and resource allocation. In this paper, we begin by introducing four partial order structures and highlight the assumptions upon which they have been based. We then discuss how these structures could be used in estimating consumer preferences. We also provide a statistical methodology to implement such estimation. In later sections, we implement the empirical model on two data sets and discuss the results and propose generalizations.