Rational Choice and von Neumann– Morgenstern’s Stable Set: The Case of Path-dependent Procedures

Describing a procedure in which choice proceeds in a sequence, we propose two alternative ways of resolving the decision problem whenever the outcome is sequence sensitive. One way yields a rationalizable choice set, and the other way produces a weakly rationalizable choice set that is equivalent to von Neumann–Morgenstern’s stable set. It is shown that for quasi-transitive rationalization, the maximal set must coincide with its stable set.