A Measure of Rationality and Welfare

Jose Apesteguia and Miguel Ballester

No 573, Working Papers from Barcelona School of Economics

Abstract: Evidence showing that individual behavior often deviates from the classical principle of preference maximization has raised at least two important questions: (i) How serious are the deviations? and (ii) What is the best way to analyse choice behavior in order to extract information for the purpose of welfare analysis? This paper addresses these questions by proposing a new way to identify the preference relation which is closest, in terms of welfare loss, to the revealed choice.

Keywords: Revealed; Preference (search for similar items in EconPapers)
JEL-codes: D01 D60 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: A Measure of Rationality and Welfare (2015)
Working Paper: A Measure of Rationality and Welfare (2015)
Working Paper: A measure of rationality and welfare (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:573

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