Independence Axiom

Home/Independence Axiom

In economics and decision theory the independence axiom states that the preferences of an agent between alternatives x and y depend only on the individual preferences between x and y. That is to say, if the agent prefers x over y then adding a third option z should not affect their preference of x over y. Also called the independence of irrelevant alternatives (IIA) this axiom is often used in economics as part of rational choice theory to obtain closed form solutions, though experiments have shown it limited in scope.