Quarterly Journal of Austrian Economics

Volume 15, No. 2 (Summer 2012)

Transitivity in economics maintains that if a is preferred to b, and b to c, then a must also be preferred to c. The problem with this is that these three decisions are made at different points of time, and tastes may have changed in the interim. The difficulty with a rejection of transitivity (which underlies indifference curve analysis) is a reductio ad absurdum, based upon the “money pump.” The present paper rejects this attempt at a reductio.