those assumptions (which involve, e.g., X and Y both being preferred to some third alternative which might be described as “neutral”, or X and Y both being describable as “positive value” on some non-preference-ordering-based view of value, or something along such lines)
X being “good” and Y being “bad” has nothing to do with it (although those are the most obvious examples). E.g. if X=$200 and Y=$100, then anyone would also pay to upgrade, when clearly both X and Y are “good” things. Or if X=”flu” and Y=”cancer”, anyone would upgrade, when both are “bad”.
The only case where people really wouldn’t upgrade is when X and Y are in some sense very close, e.g. if we have Y < X < Y + “1 penny” + “5 minutes of my time”.
But I agree, it is indeed reasonable that if someone has intransitive preferences, those preferences are actually very close in this sense and money pumping doesn’t work.
X being “good” and Y being “bad” has nothing to do with it (although those are the most obvious examples). E.g. if X=$200 and Y=$100, then anyone would also pay to upgrade, when clearly both X and Y are “good” things. Or if X=”flu” and Y=”cancer”, anyone would upgrade, when both are “bad”.
The only case where people really wouldn’t upgrade is when X and Y are in some sense very close, e.g. if we have Y < X < Y + “1 penny” + “5 minutes of my time”.
But I agree, it is indeed reasonable that if someone has intransitive preferences, those preferences are actually very close in this sense and money pumping doesn’t work.