Spiegler has an interesting article on revealed preferences and behavioural economics; he mentions Gul and Pesendorfer's model of self-control preferences. Michael might be interested in this. http://www.homepages.ucl.ac.uk/~uctprsp/revpref.pdf
Abstract
Non-standard decision models are often inconsistent with a narrow version of the revealed preference principle, according to which “utility maximization and observed choice are synonymous”. One possible response to this state of a¤airs is that the revealed preference principle is irrelevant if it con‡icts with a model in which the theorist puts a lot of faith thanks to psychological evidence. Another response is that the narrow version of the principle should be retained and used as a criterion for evaluating decision models. I discuss these two points of view, using as a template two well-known classes of decision models. The …rst point of view is examined in light of a class of models in which the decision maker's subjective belief is a carrier of utility. The second point of view is discussed in the context of Gul and Pesendorfer's model of self-control preferences.
1 comment:
Spiegler has an interesting article on revealed preferences and behavioural economics; he mentions Gul and Pesendorfer's model of self-control preferences. Michael might be interested in this.
http://www.homepages.ucl.ac.uk/~uctprsp/revpref.pdf
Abstract
Non-standard decision models are often inconsistent with a narrow version of
the revealed preference principle, according to which “utility maximization and
observed choice are synonymous”. One possible response to this state of a¤airs is
that the revealed preference principle is irrelevant if it con‡icts with a model in
which the theorist puts a lot of faith thanks to psychological evidence. Another
response is that the narrow version of the principle should be retained and used
as a criterion for evaluating decision models. I discuss these two points of view,
using as a template two well-known classes of decision models. The …rst point
of view is examined in light of a class of models in which the decision maker's
subjective belief is a carrier of utility. The second point of view is discussed in
the context of Gul and Pesendorfer's model of self-control preferences.
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