Preferred personal equilibrium and simple choices

David Freeman ()

Journal of Economic Behavior & Organization, 2017, vol. 143, issue C, 165-172

Abstract: This paper studies choices under the preferred personal equilibrium concept introduced by Koszegi and Rabin (2006) for modeling choice given expectations-based reference-dependent preferences. The main result of this paper shows that when expectations are not observed and parametric assumptions on utility are not made, preferred personal equilibrium choice is a special case of the rational shortlist method of Manzini and Mariotti (2007). Building on this connection, the paper provides an axiomatization of preferred personal equilibrium choice behavior and discusses the implications of these results for how choices can be used to test and identify the model, and for the relationship between preferred personal equilibrium and other models of behavior.

Keywords: Reference-dependent preferences; Expectations-based reference-dependence; Personal equilibrium; Rational shortlist method (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268117302408
Full text for ScienceDirect subscribers only

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:eee:jeborg:v:143:y:2017:i:c:p:165-172

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Neilson, William Stuart

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().