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Abstract

This paper discusses several competing proposals for general normative frameworks that would encompass non-standard models of choice. Most existing proposals equate welfare with well-being. Some assume that well-being flows from the achievement of well-defined objectives, and that those objectives also guide choices; the trick is to formulate a framework in which less-than-completely coherent choice patterns reveal the unobserved objectives. Others are predicated on the contention that well-being, and hence welfare, is directly measurable. Both of those approaches encounter serious conceptual difficulties. An alternative approach, developed by Bernheim and Rangel [2009], defines welfare directly in terms of choice. It entails a generalized welfare criterion that respects choice directly, without requiring any rationalization involving potentially unverifiable assumptions concerning underlying objectives and their relationships to choice. Because useful behavioral theories generally envision a substantial degree of underlying coherence in behavior, that criterion leads to a rich and tractable normative framework.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14622.

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Date of creation: Dec 2008
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Handle: RePEc:nbr:nberwo:14622

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Find related papers by JEL classification:

• D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
• D60 - Microeconomics - - Welfare Economics - - - General
• H40 - Public Economics - - Publicly Provided Goods - - - General

This paper has been announced in the following NEP Reports:

• NEP-ALL-2009-01-10 (All new papers)
• NEP-CDM-2009-01-10 (Collective Decision-Making)
• NEP-EVO-2009-01-10 (Evolutionary Economics)
• NEP-HAP-2009-01-10 (Economics of Happiness)

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1. JEEA - New Issue
   by Liam Delaney in Geary Behaviour Centre on 2009-05-22 14:49:00

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Cited by:

1. Patricio Dalton & Sayantan Ghosal, 2012. "Decisions with endogenous frames," Social Choice and Welfare, Springer, vol. 38(4), pages 585-600, April.
   
   • Dalton, Patricio; Ghosal, Sayantan;, 2010. "Decisions with Endogenous Frames," CAGE Online Working Paper Series 30, Competitive Advantage in the Global Economy (CAGE).
2. Marc Fleurbaey & Erik Schokkaert, 2012. "Behavioral Fair Social Choice," Working Papers 2012-012, Human Capital and Economic Opportunity Working Group.
   
   • FLEURBAEY, Marc & SCHOKKAERT, Erik, 2011. "Behavioral fair social choice," CORE Discussion Papers 2011043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
3. Cameron Hepburn & Stephen Duncan & Antonis Papachristodoulou, 2010. "Behavioural Economics, Hyperbolic Discounting and Environmental Policy," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 46(2), pages 189-206, June.

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