Some implications of a more general form of regret theory (Q1096514)

Regret theory entails the possibility of non-transitive pairwise choices. It therefore raises questions about how individuals choose from sets of more than two actions, especially when there exists a subset of pairs of actions over which preferences cycle. A generalization of regret theory is suggested and is compared and contrasted with Fishburn's generalization of SSB utility theory. It is also shown that under this generalization an individual with non-transitive pairwise preferences will not be caught in a never-ending cycle and is not vulnerable to being ``money-pumped'' into bankruptcy.