We examine an evolutionary model of preferences in a society where resources are finite. Agents who develop better strategies for bargaining and trading will grow to dominate the population. We show that successful agents will have preferences that exhibit the "endowment effect". The social institution of private property emerges spontaneously. Agents decisions will be subject to "framing" effect, and we are able to make some predictions as to the frames that will be salient in given situations. The model makes a clear distinction between individual welfare and revealed preferences. Nonetheless, it may still be possible to recover information about individual welfare from behavioral data.
|Date of creation:||01 Jan 1997|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://fmwww.bc.edu/EC/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Knetsch, Jack L, 1989. "The Endowment Effect and Evidence of Nonreversible Indifference Curves," American Economic Review, American Economic Association, vol. 79(5), pages 1277-84, December.
- H. Lorne Carmichael & W. Bentley MacLeod, 1997.
"Gift Giving and the Evolution of Cooperation,"
Boston College Working Papers in Economics
338., Boston College Department of Economics.
- Jack Hirshleifer, 1984. "On the Emotions as Guarantors of Threats and Promises," UCLA Economics Working Papers 337, UCLA Department of Economics.
- Martin J. Osborne & Ariel Rubinstein, 1994.
"A Course in Game Theory,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262650401, June.
- Cosmides, Leda & Tooby, John, 1994. "Better than Rational: Evolutionary Psychology and the Invisible Hand," American Economic Review, American Economic Association, vol. 84(2), pages 327-32, May.
- H. Peyton Young, 1996. "The Economics of Convention," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 105-122, Spring.
- Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211.
- Ellingsen, Tore, 1995.
"The Evolution of Bargaining Behavior,"
SSE/EFI Working Paper Series in Economics and Finance
61, Stockholm School of Economics.
- Amos Tversky & Daniel Kahneman, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Levine's Working Paper Archive
7656, David K. Levine.
- Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
- Paul R. Portney, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall.
When requesting a correction, please mention this item's handle: RePEc:boc:bocoec:343. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F Baum)
If references are entirely missing, you can add them using this form.