Partially Altruistic Choice in Presence of Consensus Bias

Sumit Sarkar and Arundhati Sarkar Bose ()
Additional contact information
Arundhati Sarkar Bose: XLRI

Journal of Quantitative Economics, 2018, vol. 16, issue 3, No 13, 853-861

Abstract: Abstract There are instances when an individual’s overall utility depends on her own utility as well as on the utility of another individual (e.g., in case of shared consumption with another individual, or in case of buying a gift for someone). In such instances, in order to make a choice that maximizes her overall utility, the chooser needs to form a belief about the other’s preferences. In presence of consensus bias the chooser believes that her dispositions are more prevalent in the society, and hence believes that others’ preferences are likely to be similar to her. This paper develops a model of individual choice that is driven by the utility of the chooser, as well as her expectation about another individual’s utility, in presence of consensus bias. Using the model, we derived the conditions under which the chooser makes a choice that is contrary to her preferences. The result highlights the role of consensus bias in reducing the likelihood of making a preference-contrary choice.

Keywords: Preferences; Choice; Partially altruistic utility; Incomplete information; Belief; Consensus bias; Second order belief (search for similar items in EconPapers)
JEL-codes: D1 D8 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40953-018-0117-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:jqecon:v:16:y:2018:i:3:d:10.1007_s40953-018-0117-8

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40953

DOI: 10.1007/s40953-018-0117-8

Access Statistics for this article

Journal of Quantitative Economics is currently edited by Dilip Nachane and P.G. Babu

More articles in Journal of Quantitative Economics from Springer, The Indian Econometric Society (TIES) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().