CONSTRUCTION OF PREFERENCES

Camelia Ghiurcä‚

Revista Economica, 2020, vol. 72, issue 1, 65-75

Abstract: Standard economic theory suggests that people's preferences are revealed by their behavior. However, behavioral economics states that often preferences are constructed mainly because of the limited rationality people have. This paper illustrates the behavioral theory of decision making focusing on judgement under certainty and decision-making under uncertainty. The existence of the phenomenon of preference reversal together with mental accounting and the other four effects - endowment, anchoring, decoy and framing - presented above suggests the discrepancy between the standard model of choice under certainty and what usually happens in practice and certified the fact that in real world preferences are not revealed, but constructed.

Keywords: Behavioural Economics; Preference Construction; Preference Reversal; Framing Effects; Mental Accounting. (search for similar items in EconPapers)
JEL-codes: B2 B21 D90 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://economice.ulbsibiu.ro/revista.economica/archive/72107ghiurca.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:blg:reveco:v:72:y:2020:i:1:p:65-75

Access Statistics for this article

More articles in Revista Economica from Lucian Blaga University of Sibiu, Faculty of Economic Sciences Lucian Blaga University of Sibiu, Faculty of Economic Sciences Dumbravii Avenue, No.17, postal code 550324, Sibiu, Romania. Contact information at EDIRC.
Bibliographic data for series maintained by Eduard Alexandru Stoica ().