A Theory of Chosen Preferences

98 Pages Posted: 2 Apr 2019

See all articles by B. Douglas Bernheim

B. Douglas Bernheim

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Luca Braghieri

Stanford University - Department of Economics

Alejandro Martínez-Marquina

Stanford University

David Zuckerman

Stanford University, Department of Economics

Date Written: March 10, 2019

Abstract

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

Bernheim, B. Douglas and Braghieri, Luca and Martínez-Marquina, Alejandro and Zuckerman, David, A Theory of Chosen Preferences (March 10, 2019). Available at SSRN: https://ssrn.com/abstract=3350187 or http://dx.doi.org/10.2139/ssrn.3350187

B. Douglas Bernheim (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-725-8732 (Phone)
650-725-5702 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Luca Braghieri

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Alejandro Martínez-Marquina

Stanford University ( email )

Stanford, CA 94305
United States

David Zuckerman

Stanford University, Department of Economics ( email )

Stanford, CA
United States

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