A Theory of Chosen Preferences
- (pp. 720-54)
Abstract
We propose and develop a dynamic theory of endogenous preference formation in which people adopt worldviews that shape their judgments about their experiences. The 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. The theory generates rich behavioral dynamics, thereby illuminating a wide range of applications and providing potential explanations for a variety of observed phenomena.Citation
Bernheim, B. Douglas, Luca Braghieri, Alejandro Martínez-Marquina, and David Zuckerman. 2021. "A Theory of Chosen Preferences." American Economic Review, 111 (2): 720-54. DOI: 10.1257/aer.20190390Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification