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Modelling change in individual characteristics: an axiomatic framework

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  • Dietrich Franz

    (METEOR)

Abstract

Economic models describe individuals in terms of underlying characteristics, such as taste for some good, sympathy level for another player, time discount rate, risk attitude, and so on. In real life, such characteristics change through experiences: taste for Mozart changes through listening to it, sympathy for another player through observing his moves, and so on. Models typically ignore change, not just for simplicity but also because it is unclear how to incorporate change. I introduce a general axiomatic framework for defining, analysing and comparing rival models of change. I show that seemingly basic postulates on modelling change together have strong implications, like irrelevance of the order in which someone has his experiences and `linearity'' of change. This is a step towards placing the modelling of change on solid axiomatic grounds and enabling non-arbitrary incorporation of change into economic models.

Suggested Citation

  • Dietrich Franz, 2008. "Modelling change in individual characteristics: an axiomatic framework," Research Memorandum 045, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  • Handle: RePEc:unm:umamet:2008045
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    References listed on IDEAS

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    9. Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May.
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    Citations

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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 & Christian List, 2011. "A model of non-informational preference change," Journal of Theoretical Politics, , vol. 23(2), pages 145-164, April.
    3. Dietrich, Franz & List, Christian, 2013. "Reason-Based Rationalization," MPRA Paper 51776, University Library of Munich, Germany.
    4. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 249-281, July.
    5. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(02), 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.
    9. repec:hal:journl:halshs-01249635 is not listed on IDEAS
    10. 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.

    More about this item

    Keywords

    mathematical economics;

    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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