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Modelling change in individual characteristics: An axiomatic framework

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  • Dietrich, Franz

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 paper is a step towards placing the modelling of change on axiomatic grounds and enabling non-arbitrary incorporation of change into economic models.

Suggested Citation

  • Dietrich, Franz, 2012. "Modelling change in individual characteristics: An axiomatic framework," Games and Economic Behavior, Elsevier, vol. 76(2), pages 471-494.
    • Handle: RePEc:eee:gamebe:v:76:y:2012:i:2:p:471-494
    DOI: 10.1016/j.geb.2012.06.006
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    Cited by:

    1. 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.
    2. Franz Dietrich, 2014. "Anti-terrorism policies and the risk of provoking," Journal of Theoretical Politics, , vol. 26(3), pages 405-441, July.
    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. Dietrich, Franz & List, Christian, 2013. "Reason-Based Rationalization," MPRA Paper 51776, University Library of Munich, Germany.
    5. 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.
    6. repec:hal:wpaper:halshs-01249632 is not listed on IDEAS
    7. repec:cep:stitep:/2014/565 is not listed on IDEAS
    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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