Evolving Hierarchical Preferences and Behavioral Economic Policies

Abstract

This paper critically discusses the standard concept of hierarchical preferences, which presupposes that a stable system of higher- and lower-order preferences exists, wherein the former contains an individual's fundamental purposes and values, while the latter guides everyday choices. It is argued that systems of hierarchical preferences suffer from problems similar to those of standard preferences, in terms of rationality, that they also are potentially unstable and can change, for example, in response to individual experiences. It is furthermore argued that higher-order preferences may not be coherent internally, because their different parts result from different kinds of reasoning. Finally, it is argued that behavioral economic policies, such as soft paternalism, easily can endanger the autonomy and integrity of an individual as a person.

Keywords: Hierarchical Preferences, Multiple Selves, Internalities, Behavioral Policies, Paternalism, Nudge

JEL Classification: D11, D18, D63, D83, H11, Z18