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Where do preferences come from?

  • Dietrich Franz
  • List Christian


Rational choice theory analyzes how an agent can rationally act, given his or her preferences, but says little about where those preferences come from. Instead, preferences are usually assumed to be .xed and exogenously given. We introduce a framework for conceptualizing preference formation and preference change. In our model, an agent.s preferences are based on certain .motivationally of the alternatives over which the preferences are held. Preferences may change as new properties of the alternatives become salient or previously salient ones cease to be so. We suggest that our approach captures endogenous preferences in various contexts, and helps to illuminate the distinction between formal and substantive concepts of rationality, as well as the role of perception in rational choice.

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Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 005.

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Date of creation: 2011
Date of revision:
Handle: RePEc:unm:umamet:2011005
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  1. Gold, Natalie & List, Christian, 2004. "Framing as Path Dependence," Economics and Philosophy, Cambridge University Press, vol. 20(02), pages 253-277, October.
  2. Sethi, Rajiv & Somanathan, E., 2001. "Preference Evolution and Reciprocity," Journal of Economic Theory, Elsevier, vol. 97(2), pages 273-297, April.
  3. Franz Dietrich & Christian List, 2009. "A reason-based theory of rational choice," LSE Research Online Documents on Economics 27003, London School of Economics and Political Science, LSE Library.
  4. Michael Bacharach, 2006. "The Hi-Lo Paradox, from Beyond Individual Choice: Teams and Frames in Game Theory
    [Beyond Individual Choice: Teams and Frames in Game Theory]
    ," Introductory Chapters, Princeton University Press.
  5. Robert Sugden, 2005. "Why rationality is not a consequence of Hume's theory of choice," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 12(1), pages 113-118.
  6. Franz Dietrich, 2014. "Anti-terrorism policies and the risk of provoking," Journal of Theoretical Politics, , vol. 26(3), pages 405-441, July.
  7. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  8. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  9. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  10. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
  11. Franz Dietrich & Christian List, 2011. "A model of non-informational preference change," Journal of Theoretical Politics, , vol. 23(2), pages 145-164, April.
  12. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  13. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  14. 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.
  15. Hammond, Peter J, 1976. "Changing Tastes and Coherent Dynamic Choice," Review of Economic Studies, Wiley Blackwell, vol. 43(1), pages 159-73, February.
  16. Dekel, Eddie & Ely, Jeffrey & Yilankaya, Okan, 2004. "Evolution of Preferences," working papers dekel-04-08-13-01-21-07, Vancouver School of Economics, revised 09 Jun 2006.
  17. Eddie Dekel & Jeffrey C. Ely & Okan Yilankaya, 2007. "Evolution of Preferences -super-1," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 685-704.
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