Exploring the Behavior of Economic Agents: the role of relative preferences

Michelle Alexopoulos () and Stephen Sapp ()
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Stephen Sapp: University of Western Ontario

Economics Bulletin, 2006, vol. 12, issue 2, pages 1-7

Abstract: Standard economic theory assumes individuals choose actions that optimize their expected utility. In this paper we investigate how the existence of players with non-standard preferences may influence economic agents' behavior in some of the most frequently studied non-cooperative games. We find that allowing for the existence of agents with relative preferences can help explain observed economic actions which, at times, appear counter-intuitive.

Keywords: firm behavior; perfect competition; Relative preferences (search for similar items in EconPapers)
JEL-codes: L2 D2 (search for similar items in EconPapers)
Date: 2006-02-21
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Persistent link: http://EconPapers.repec.org/RePEc:ebl:ecbull:v:12:y:2006:i:2:p:1-7

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