Preference purification and the inner rational agent: A critique of the conventional wisdom of behavioural welfare economics

Gerardo Infante, Guilhem Lecouteux, Robert Sugden

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Abstract

Neoclassical economics assumes that individuals have stable and context-independent preferences, and uses preference-satisfaction as a normative criterion. By calling this assumption into question, behavioural findings cause fundamental problems for normative economics. A common response to these problems is to treat deviations from conventional rational-choice theory as mistakes, and to try to reconstruct the preferences that individuals would have acted on, had they reasoned correctly. We argue that this preference purification approach implicitly uses a dualistic model of the human being, in which an inner rational agent is trapped in an outer psychological shell. This model is psychologically and philosophically problematic.
Original languageEnglish
Pages (from-to)1-25
JournalJournal of Economic Methodology
Volume23
Issue number1
Early online date14 Mar 2016
DOIs
Publication statusPublished - 2016

Keywords

  • preference purification
  • inner rational agent
  • behavioural welfare economics
  • libertarian paternalism
  • context-dependent preferences

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