Taking Absurd Theories Seriously 3 essays on Rational Choice Theory and Welfare Analysis
The effects of public policies on the welfare of different groups in society are in many cases unclear. Economists often study such effects through welfare analyses based on a mathematical model of an individual decision maker. I show for the case of Rational Addiction theory that we have both theoretical and empirical reasons to think that the model fails to reflect the welfare of real people. I argue that the acceptance and standing of the theory is due to a failure to apply relevant criteria when evaluating such welfare analyses, that this failure makes the profession take absurd theories seriously, and that such welfare analyses should therefore be treated with scepticism and great care.
|Date of creation:||14 Jun 2009|
|Date of revision:|
|Contact details of provider:|| Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway|
Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.html
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:hhs:oslohe:2004_012. 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: (Anbjørg Kolaas)
If references are entirely missing, you can add them using this form.