Bernheim and Rangel have a paper out in the current edition of the AER on choice-theoretic foundations for behavioural welfare economics. According to these authors, standard welfare analysis is based on choice, not on utility or preferences. And they have devised a new approach to welfare analysis where individuals make inconsistent choices.
See a version of the paper here.
2 comments:
Here's a les technical discussion about choice-based welfare analysis by Matthew Rabin and Botond Koszegi (2007):
http://elsa.berkeley.edu/~botond/mistakeschicago.pdf
Rabin and Koszegi's contribution is also in the current edition of the AER. I think the AER version might be more technical.
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