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Modelling change in individual characteristics: an axiomatic framework

Author

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  • Franz Dietrich

    (CERSES - UMR 8137 - Centre de recherche sens, ethique, société - UPD5 - Université Paris Descartes - Paris 5 - CNRS - Centre National de la Recherche Scientifique)

Abstract

Economic models describe individuals by underlying characteristics, such as the degree to which they like music, have sympathy, want success, need recognition, etc. In reality, such characteristics change through experiences: taste for Mozart changes through attending concerts, sympathy through meeting people, etc. Models typically ignore change, partly because it is unclear how to incorporate it. I develop a general axiomatic framework for defining, analysing and comparing rival models of change. Seemingly basic postulates on modelling change have strong implications, like irrelevance of the order in which someone has his experiences and 'linearity' of change. This is a step towards placing the modelling of change on axiomatic grounds and enabling non-arbitrary incorporation of change into economic models.

Suggested Citation

  • Franz Dietrich, 2012. "Modelling change in individual characteristics: an axiomatic framework," Post-Print halshs-00977998, HAL.
    • Handle: RePEc:hal:journl:halshs-00977998
    DOI: 10.1016/j.geb.2012.06.006
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    References listed on IDEAS

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    1. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    2. Sethi, Rajiv & Somanathan, E., 2003. "Understanding reciprocity," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 1-27, January.
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    10. Eddie Dekel & Jeffrey C. Ely & Okan Yilankaya, 2007. "Evolution of Preferences -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 685-704.
    11. R. H. Strotz, 1955. "Myopia and Inconsistency in Dynamic Utility Maximization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(3), pages 165-180.
    12. Dekel, Eddie & Ely, Jeffrey & Yilankaya, Okan, 2004. "Evolution of Preferences," Microeconomics.ca working papers dekel-04-08-13-01-21-07, Vancouver School of Economics, revised 09 Jun 2006.
    13. 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.
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    Citations

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    Cited by:

    1. Franz Dietrich, 2014. "Anti-terrorism policies and the risk of provoking," Journal of Theoretical Politics, , vol. 26(3), pages 405-441, July.
    2. Dietrich, Franz & List, Christian & Bradley, Richard, 2016. "Belief revision generalized: A joint characterization of Bayes' and Jeffrey's rules," Journal of Economic Theory, Elsevier, vol. 162(C), pages 352-371.
    3. Franz Dietrich & Christian List, 2011. "A model of non-informational preference change," Journal of Theoretical Politics, , vol. 23(2), pages 145-164, April.
    4. repec:hal:wpaper:halshs-01249632 is not listed on IDEAS
    5. Dietrich, Franz & List, Christian, 2013. "Reason-Based Rationalization," MPRA Paper 51776, University Library of Munich, Germany.
    6. repec:cep:stitep:/2014/565 is not listed on IDEAS
    7. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(2), pages 249-281, July.
    8. Dietrich, Franz & List, Christian & Bradley, Richard, 2016. "Belief revision generalized: A joint characterization of Bayes' and Jeffrey's rules," Journal of Economic Theory, Elsevier, vol. 162(C), pages 352-371.

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    More about this item

    Keywords

    change; taste; sympathy; altruism; rational choice; axiomatic foundations; dynamic (in)consistency; externalities;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D0 - Microeconomics - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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