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Behavioral Welfare Economics and Redistribution

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  • Marc Fleurbaey
  • Erik Schokkaert

Abstract

Behavioral economics has shaken the view that individuals have well-defined, consistent and stable preferences. This raises a challenge for welfare economics, which takes as a key postulate that individual preferences should be respected. We argue, in agreement with Bernheim (2009) and Bernheim and Rangel (2009) that behavioral economics is compatible with consistency of partial preferences, and explore how the Bernheim-Rangel approach can be extended to deal with distributive issues. We revisit some key results of the theory in a framework with partial preferences and show how one can derive partial orderings of individual and social situations.

Suggested Citation

  • Marc Fleurbaey & Erik Schokkaert, 2013. "Behavioral Welfare Economics and Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 180-205, August.
  • Handle: RePEc:aea:aejmic:v:5:y:2013:i:3:p:180-205
    Note: DOI: 10.1257/mic.5.3.180
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    References listed on IDEAS

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    2. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2008. "How are preferences revealed?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1787-1794, August.
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    Cited by:

    1. repec:bla:econom:v:84:y:2017:i:334:p:210-238 is not listed on IDEAS
    2. repec:spr:etbull:v:5:y:2017:i:2:d:10.1007_s40505-016-0110-3 is not listed on IDEAS
    3. Koen Decancq & Marc Fleurbaey & Erik Schokkaert, 2017. "Wellbeing Inequality and Preference Heterogeneity," Economica, London School of Economics and Political Science, vol. 84(334), pages 210-238, April.
    4. John A. Weymark, 2017. "Conundrums for nonconsequentialists," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(2), pages 269-294, February.
    5. Georgios Gerasimou, 2016. "Partially dominant choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(1), pages 127-145, January.
    6. Akay, Alpaslan & Bargain, Olivier & Jara, Xavier, 2017. "'Fair' Welfare Comparisons with Heterogeneous Tastes: Subjective versus Revealed Preferences," IZA Discussion Papers 10908, Institute for the Study of Labor (IZA).
    7. DECANCQ, Koen & FLEURBAEY, Marc & SCHOKKAERT, Erik, 2014. "Inequality, income, and well-being," CORE Discussion Papers 2014018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Richard Cookson & Owen Cotton-Barrett & Matthew Adler & Miqdad Asaria & Toby Ord, 2016. "Years of good life based on income and health: Re-engineering cost-benefit analysis to examine policy impacts on wellbeing and distributive justice," Working Papers 132cherp, Centre for Health Economics, University of York.
    9. Treibich, Rafael, 2014. "Welfare Egalitarianism with Other-Regarding Preferences," Discussion Papers of Business and Economics 22/2014, University of Southern Denmark, Department of Business and Economics.
    10. Akay, Alpaslan & Bargain, Olivier & Jara, Xavier, 2017. "Back to Bentham, Should We? Large-Scale Comparison of Experienced versus Decision Utility," IZA Discussion Papers 10907, Institute for the Study of Labor (IZA).
    11. Akay, Alpaslan & Bargain, Olivier B. & Jara, H. Xavier, 2017. "Back to Bentham, Should We? Large-Scale Comparison of Experienced versus Decision Utility," GLO Discussion Paper Series 52, Global Labor Organization (GLO).
    12. Antoine Beretti & Charles Figuières & Gilles Grolleau, 2014. "An Instrument that Could Turn Crowding-out into Crowding-in," Working Papers 2014.04, FAERE - French Association of Environmental and Resource Economists.

    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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