Role models that make you unhappy: light paternalism, social learning, and welfare

Christian Schubert and Christian Cordes

Journal of Institutional Economics, 2013, vol. 9, issue 2, 131-159

Abstract: Behavioral (e.g., consumption) patterns of boundedly rational agents can lead these agents into learning dynamics that appear to be ‘wasteful’ in terms of well-being or welfare. Within settings displaying preference endogeneity, it is however still unclear how to conceptualize well-being. This paper contributes to the discussion by suggesting a formal model of preference learning that can inform the construction of non-standard notions of dynamic well-being. Based on the assumption that interacting agents are subject to two biases that make them systematically prefer some cultural variants over others, we develop a procedural notion of well-being, based on the idea that policy should modify institutional conditions that generate dynamic instability in preference trajectories, while leaving individual choice sets unrestricted.

Date: 2013
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Working Paper: Role Models that Make You Unhappy: Light Paternalism, Social Learning and Welfare (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jinsec:v:9:y:2013:i:02:p:131-159_00

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