AbstractIn formalizing a ‘veil of ignorance’ type procedure, this paper considers how an agent’s preferences over a set of alternatives change as he is placed at an increasing ‘distance’ from the consequences of his choices. A definition for such ‘removed preferences’ is presented and its properties studied. As an application, it is demonstrated that decreasingly impatient agents are ‘essentially’ exponential when distanced from the present, and that rank-dependent expected utility agents are ‘essentially’ expected utility when distanced from risk.
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Bibliographic InfoPaper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - Working Papers Series with number WP2011-038.
Length: 35 pages
Date of creation: Jan 2011
Date of revision:
Psychological distance; Veil of Ignorance; Behavioral Welfare; Discounting; Probability weighting;
Other versions of this item:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D60 - Microeconomics - - Welfare Economics - - - General
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