AbstractFundamental choices, like location or education, affect the attitudes and beliefs with which the individual will analyze future day to day decision problems. These effects cannot be assumed to be transparent to the individual. To restore methodological discipline in the analysis of such choices, we propose a solution concept based on an idea of consistency: the individual should not regret her fundamental choices after her preferences and beliefs have adjusted thereof. We show that even single person decision problems admit multiple, Pareto-ranked solutions: the individual might be stuck in an aspiration trap.
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Date of creation: 2006
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-22 (All new papers)
- NEP-CBE-2006-04-22 (Cognitive & Behavioural Economics)
- NEP-EVO-2006-04-22 (Evolutionary Economics)
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