Paper #1220

Títol:

A measure of rationality and welfare

Autors:

Jose Apesteguia i Miguel Angel Ballester

Data:

Maig 2010

Resum:

Evidence showing that individual behavior often deviates from the classical principle of preference maximization has raised at least two important questions: (i) How serious are the deviations? and (ii) What is the best way to analyse choice behavior in order to extract information for the purpose of welfare analysis? This paper addresses these questions by proposing a new way to identify the preference relation which is closest, in terms of welfare loss, to the revealed choice.

Paraules clau:

Rationality; Individual Welfare; Revealed Preference.

Codis JEL:

D01; D60.

Àrea de Recerca:

Economia Experimental i del Comportament / Microeconomia

Publicat a:

Journal of Political Economy, Forthcoming

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