Answer:
It is true that majority rule can fail to provide a clear outcome with more than two options due to the Condorcet paradox. While individuals may not strictly adhere to the economic model of rational decision-making, they may behave in ways that approximate maximizing utility, influenced by limited information and cognitive biases.
Step-by-step explanation:
The statement is true: majority rule can fail to produce a single preferred outcome when there are more than two choices. This phenomenon is known as the Condorcet paradox or the voting paradox. It occurs in situations where collective preferences can be cyclic (non-transitive), even if the individual preferences within the group are rational and transitive. For example, in a vote among three options A, B, and C, a group might prefer A over B, B over C, and yet C over A, creating a cycle without a clear winner.
Furthermore, individuals may not always conform to the economic model of decision-making that assumes rational behavior and utility maximization. There are cases where people enact decisions that appear suboptimal or inconsistent. However, this does not necessarily disprove the notion that human behavior can be understood in terms of seeking to maximize utility. Often, individuals approximate rational decision-making but factors such as limited information, cognitive biases, and heuristics influence their choices. These can cause deviations from the pure economic model of rationality.