Freedom of Choice

This chapter introduces and reviews the extensive literature using an axiomatic-deductive approach to the measurement of freedom of choice and suggest some new avenues of research. It presents Pattanaik and Xu's (1990) axiomatic characterization of the simple but counter-intuitive cardinality rule that the more alternatives in an opportunity set the more freedom the set provides. Within the various discussions of this ranking, we distinguish a diversity and an opportunity issue. The diversity issue concerns the failure of the cardinality rule to incorporate information about differences between alternatives. The opportunity issue concerns incorporating individual preferences over alternatives into the measurement of freedom of choice. Diversity is usually addressed without recourse to preferences and the two lines can therefore also be referred to as nonpreference- based and preference-based approaches to the measurement of freedom of choice. After presenting the outlines of these approaches and some proposed measurements, we suggest that they neglect relevant information about the things individuals are not free to do. We subsequently ask whether the literature tries to measure the extent of a person's freedom or its value. If it is the former then the differences between the two types of approach can be explained by their underlying definition of freedom. If it is the latter then important elements are not captured by any of the axiomatic formulations: namely the costs of choice. It concludes the chapter by suggesting some new lines of inquiry.