The history of the mainstream rejection of interdependent preferences

Stavros Drakopoulos

MPRA Paper from University Library of Munich, Germany

Abstract: The notion of interdependent preferences has a long history in economic thought. It can be found in the works of authors such as Hume, Rae, Genovesi, Smith, Marx and Mill among others. In the 20th century, the idea became more widespread mainly through the works of Veblen and Duesenberry. Recently, an increasing number of theorists are interested in issues like reference income, relative consumption and positional goods which are all based on the concept of interdependent preferences. However, such preferences were never part of the corpus of orthodox theory. For instance, although Pareto and Marshall were aware of their existence, they rejected their incorporation into economic theory. There were various reasons for this rejection. The structure of mainstream economic methodology might be one reason. Another reason had to do with the theoretical implications of adopting interdependent preferences. The paper discusses the main historical aspects of this idea in relation to the mainstream resistance to incorporate it in orthodox economic theory.

Keywords: preferences; positional goods; History of Economic Thought (search for similar items in EconPapers)
JEL-codes: B00 D11 (search for similar items in EconPapers)
Date: 2010-07
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Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/26769/2/MPRA_paper_26769.pdf revised version (application/pdf)

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