Behavioral Welfare Economics
By Douglas Bernheim. 2009
199 citations recorded by the source corpus.
This paper discusses several competing proposals for general normative frameworks that would encompass non-standard models of choice. Most existing proposals equate welfare with well-being. Some assume that well-being flows from the achievement of well-defined objectives, and that those objectives also guide choices; the trick is to formulate a framework in which less-than-completely coherent choice patterns reveal the unobserved objectives. Others are predicated on the contention that well-being, and hence welfare, is directly measurable. Both of those approaches encounter serious conceptual difficulties. An alternative approach, developed by Bernheim and Rangel [2009], defines welfare directly in terms of choice. It entails a generalized welfare criterion that respects choice directly, without requiring any rationalization involving potentially unverifiable assumptions concerning underlying objectives and their relationships to choice. Because useful behavioral theories generally envision a substantial degree of underlying coherence in behavior, that criterion leads to a rich and tractable normative framework.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/1b566a7e8db07940cf1c084f7e109d39fa3f7850
How researchers see this paper
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In Economics and Econometrics
- Marco Mariotti
- Paola Manzini
- I. Popov
- Andrey Fradkin
- B. Douglas Bernheim
- Douglas Bernheim
- Anna Lusardi
- Robert Sugden
Citations in the corpus
- Stochastic Choice and Consideration Sets (2012, background): “A full discussion is in Bernheim [3] and a more limited is in Manzini and Mariotti [?].”
- CATEGORIZE THEN CHOOSE: BOUNDEDLY RATIONAL CHOICE AND WELFARE (2012, methodology): “In this respect we have illustrated some of the points made by Bernheim [3] on the ‘identification’ difficulty inbuilt in a revealed preference type of approach.”
- The Welfare Economics of Default Options in 401(k) Plans (2015, methodology): “With this formulation of naivete, the opt-out condition corresponds to (4), with”