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Aspiration Traps

Author

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  • Heifetz Aviad

    (Department of Economics and Management, The Open University of Israel, Ra’anana, Israel)

  • Minelli Enrico

    (Department of Economics and Management, University of Brescia, Brescia, Italy)

Abstract

Fundamental non-recurrent choices, like location or education, affect the attitudes and beliefs with which the individual consequently analyzes day-to-day decision problems. These effects cannot be assumed to be transparent to the individual. To restore methodological discipline in the analysis of such choices, we propose a solution concept based on an idea of self-justification and consistency: the individual should not regret her fundamental choice after her preferences and beliefs regarding day-to-day decisions have adjusted thereof. We show that even single-person fundamental choice problems admit multiple, Pareto-ranked solutions: the individual might be stuck in an aspiration trap.

Suggested Citation

  • Heifetz Aviad & Minelli Enrico, 2015. "Aspiration Traps," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 125-142, July.
    • Handle: RePEc:bpj:bejtec:v:15:y:2015:i:2:p:125-142:n:3
    DOI: 10.1515/bejte-2013-0120
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    Cited by:

    1. Dalton, Patricio & Ghosal, Sayantan, 2008. "Behavioural Decisions and Welfare," The Warwick Economics Research Paper Series (TWERPS) 834, University of Warwick, Department of Economics.
    2. Del Boca, Alessandra & Fratianni, Michele & Spinelli, Franco & Trecroci, Carmine, 2010. "The Phillips curve and the Italian lira, 1861-1998," The North American Journal of Economics and Finance, Elsevier, vol. 21(2), pages 182-197, August.
    3. Alessandro Fedele & Raffaele Miniaci, 2010. "Do Social Enterprises Finance Their Investments Differently from For-profit Firms? The Case of Social Residential Services in Italy," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 1(2), pages 174-189, October.
    4. Siegfried Berninghaus & Werner Güth & M. Levati & Jianying Qiu, 2011. "Satisficing search versus aspiration adaptation in sales competition: experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(1), pages 179-198, February.
    5. Paula Carrasco & Rodrigo Ceni & Ivone Perazzo & Gonzalo Salas, 2021. "Are Not Any Silver Linings in the Cloud? Subjective Well-being Among Deprived Young People," Journal of Happiness Studies, Springer, vol. 22(2), pages 491-516, February.
    6. Francesco Menoncin & Paolo Panteghini, 2009. "Retrospective Capital Gains Taxation in the Real World," CESifo Working Paper Series 2674, CESifo.
    7. Bisin, A. & Geanakoplos, J.D. & Gottardi, P. & Minelli, E. & Polemarchakis, H., 2011. "Markets and contracts," Journal of Mathematical Economics, Elsevier, vol. 47(3), pages 279-288.
    8. T. Q. Bao & B. S. Mordukhovich & A. Soubeyran, 2015. "Variational Analysis in Psychological Modeling," Journal of Optimization Theory and Applications, Springer, vol. 164(1), pages 290-315, January.
    9. Alessandro Fedele & Paolo M. Panteghini & Sergio Vergalli, 2011. "Optimal Investment and Financial Strategies under Tax‐Rate Uncertainty," German Economic Review, Verein für Socialpolitik, vol. 12(4), pages 438-468, November.
    10. Zuluaga, Blanca, 2013. "Quality of social networks and educational investment decisions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 43(C), pages 72-82.
    11. Amedeo Fossati & Rosella Levaggi, 2008. "Delay is not the answer: waiting time in health care & income redistribution," Working Papers 0801, University of Brescia, Department of Economics.
    12. Ghosal, Sayantan & Dalton, Patricio, 2013. "Characterizing Behavioral Decisions with Choice Data," CAGE Online Working Paper Series 107, Competitive Advantage in the Global Economy (CAGE).
    13. Patricio S. Dalton & Sayantan Ghosal & Anandi Mani, 2016. "Poverty and Aspirations Failure," Economic Journal, Royal Economic Society, vol. 126(590), pages 165-188, February.
    14. Alessandro Fedele & Francesco Liucci & Andrea Mantovani, 2009. "Credit availability in the crisis: the European investment bank group," Working Papers 0913, University of Brescia, Department of Economics.
    15. Martin Meier & Enrico Minelli & Herakles Polemarchakis, 2014. "Competitive markets with private information on both sides," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(2), pages 257-280, February.
    16. Rosella Levaggi & Francesco Menoncin, 2009. "Decentralized provision of merit and impure public goods," Working Papers 0909, University of Brescia, Department of Economics.

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