The Limit of Public Policy: Endogenous Preferences

O. Bar-Gill and Chaim Fershtman ()

Working Papers from Tel Aviv

Abstract: In designing public policy it is not enough to consider the possible reaction of individuals to the chosen policy. Public policy may also affect the formation of preferences and norms in a society. The endogenous evolution of preferences, in addition to introducing a conceptual difficulty in evaluating policies, may also eventually affect actual behavior. In order to demonstrate the implications of endogenous preferences on the design of optimal public policy, we present a model in which a subsidy policy is set to encourage contributions towards a public good.

Keywords: PUBLIC POLICY; BEHAVIOUR; PUBLIC GOODS (search for similar items in EconPapers)
JEL-codes: C7 H2 P5 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2001
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:2001-5

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