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Exploring the Behavior of Economic Agents: the role of relative preferences

Author

Listed:
  • Joseph Cavanaugh

    (Wright State University - LC)

  • Michelle Alexopoulos

    (University of Toronto)

Abstract

Standard economic theory assumes individuals choose actions that optimize their expected utility. In this paper we investigate how the existence of players with non-standard preferences may influence economic agents' behavior in some of the most frequently studied non-cooperative games. We find that allowing for the existence of agents with relative preferences can help explain observed economic actions which, at times, appear counter-intuitive.

Suggested Citation

  • Joseph Cavanaugh & Michelle Alexopoulos, 2006. "Exploring the Behavior of Economic Agents: the role of relative preferences," Economics Bulletin, AccessEcon, vol. 12(2), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-06l20001
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    File URL: http://www.accessecon.com/pubs/EB/2006/Volume12/EB-06L20001A.pdf
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    References listed on IDEAS

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    Cited by:

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    More about this item

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D2 - Microeconomics - - Production and Organizations

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