Preference purification in behavioural welfare economics: an impossibility result

Guilhem Lecouteux and Ivan Mitrouchev
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Ivan Mitrouchev: IESEG School of Management Lille

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Abstract: We propose a precise definition of the notion of ‘context' in behavioural economics, and identify four axioms characterising the strategies implemented in standard and behavioural welfare economics to define welfare: (1) normative individualism, (2) behavioural context-independence, (3) normative contextindependence, and (4) consumer sovereignty. We then review the different approaches in behavioural normative economics in the light of those axioms. We highlight that the key distinction between those approaches is the axiom which is chosen as a way to infer normative preferences from behavioural preferences, with either normative context-independence or consumer sovereignty. We argue that preference purification requires the axiom of normative context-independence, whose justification is however limited when individual behaviour is contextdependent. This suggests that it might be impossible to offer a general strategy to infer true/normative preferences from possibly incoherent behavioural preferences.

Date: 2022-09-29
New Economics Papers: this item is included in nep-evo, nep-hme and nep-mic
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Working Paper: Preference Purification in Behavioural Welfare Economics: an Impossibility Result (2022)
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