A Theory of Chosen Preferences
98 Pages Posted: 2 Apr 2019
Date Written: March 10, 2019
We propose and develop a theory of preference formation based on the idea that people evaluate their lives according to worldviews that provide accounts of success and failure, and that they choose those worldviews subject to feasibility constraints. Our framework highlights the role of mindset ﬂexibility, a trait that determines the relative weights the decision maker places on her current and anticipated worldviews when evaluating future outcomes. We show that our theory generates rich behavioral dynamics, thereby illuminating a wide range of applications and providing potential accounts for a variety of observed phenomena.
Keywords: chosen preferences, endogenous preferences, time inconsistency, mindset flexibility
JEL Classification: D11, D90, D91
Suggested Citation: Suggested Citation