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Where do preferences come from?

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  • Dietrich Franz
  • List Christian

    (METEOR)

Abstract

Rational choice theory analyzes how an agent can rationally act, given his or her preferences, but says little about where those preferences come from. Instead, preferences are usually assumed to be .xed and exogenously given. We introduce a framework for conceptualizing preference formation and preference change. In our model, an agent.s preferences are based on certain .motivationally salient.properties of the alternatives over which the preferences are held. Preferences may change as new properties of the alternatives become salient or previously salient ones cease to be so. We suggest that our approach captures endogenous preferences in various contexts, and helps to illuminate the distinction between formal and substantive concepts of rationality, as well as the role of perception in rational choice.

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Bibliographic Info

Paper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 005.

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Date of creation: 2011
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Handle: RePEc:dgr:umamet:2011005

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Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm

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Keywords: microeconomics ;

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References

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  1. Dietrich, Franz, 2008. "Anti-terrorism politics and the risk of provoking," Research Memoranda 011, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
  2. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  3. Eddie Dekel & Jeffrey C. Ely & Okan Yilankaya, 2007. "Evolution of Preferences," Review of Economic Studies, Wiley Blackwell, vol. 74(3), pages 685-704, 07.
  4. Natalie Gold & Christian List, 2002. "Framing as Path-Dependence," Economics Series Working Papers 124, University of Oxford, Department of Economics.
  5. Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May.
  6. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  7. Dietrich, Franz, 2008. "Modelling change in individual characteristics: an axiomatic framework," Research Memoranda 045, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization.
  8. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  9. Franz Dietrich & Christian List, 2011. "A model of non-informational preference change," Journal of Theoretical Politics, , vol. 23(2), pages 145-164, April.
  10. Sethi, Rajiv & Somanathan, E., 2001. "Preference Evolution and Reciprocity," Journal of Economic Theory, Elsevier, vol. 97(2), pages 273-297, April.
  11. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
  12. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  13. Robert Sugden, 2005. "Why rationality is not a consequence of Hume's theory of choice," European Journal of the History of Economic Thought, Taylor and Francis Journals, vol. 12(1), pages 113-118.
  14. Hammond, Peter J, 1976. "Changing Tastes and Coherent Dynamic Choice," Review of Economic Studies, Wiley Blackwell, vol. 43(1), pages 159-73, February.
  15. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
  16. Michael Bacharach, 2006. "The Hi-Lo Paradox, from Beyond Individual Choice: Teams and Frames in Game Theory," Introductory Chapters, in: Natalie Gold & Robert Sugden (ed.), Beyond Individual Choice: Teams and Frames in Game Theory Princeton University Press.
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Cited by:
  1. Dietrich, Franz & List, Christian, 2012. "Reasons for (prior) belief in bayesian epistemology," MPRA Paper 36111, University Library of Munich, Germany.
  2. Dietrich, Franz & List, Christian, 2012. "Mentalism versus behaviourism in economics: a philosophy-of-science perspective," MPRA Paper 37813, University Library of Munich, Germany.

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