糖心TV

"Behavioral Decisions and Welfare" (with S. Ghosal)

Abstract:

What are the normative implications of behavioral economics? This paper proposes a general, simple and tractable theoretical framework to answer this question. Although we show that revealed preferences cannot, in general, underpin welfare, we offer conditions validating such a link. We assess the scope of the existing normative criteria used elsewhere and propose a normative criterion based on individual autonomy as a refinement. We use our autonomy criterion to justify a class of public policy interventions we label soft-libertarian, which offers theoretical grounds for empowerment policies. Our theory is falsifiable, even when the decision making procedure is not observable. When there is some information about the preferences parameters and/or the way they change with actions, we can test whether the observed behavior is implied by an autonomous or non-autonomous decision maker. Our approach unifies a variety of seemingly disconnected positive behavioral models, and it allows for preferences to be not necessarily complete or transitive and for action sets to be not necessarily convex. We apply our model to study the interaction between the decision maker's initial disadvantage and her capacity to aspire. (D01, D62, C61, I30)

Keywords: Behavioral Decisions, Indistinguishability, Revealed Preferences, Normative Preferences, Welfare, Paternalism, Autonomy, Existence.