A Reformulation of Normative Economics for Models with Endogenous Preferences

Vipul Bhatt (), Masao Ogaki and Yuichi Yaguchi
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Yuichi Yaguchi: Chuo University

No 49, UTokyo Price Project Working Paper Series from University of Tokyo, Graduate School of Economics

Abstract: This paper proposes a framework to balance considerations of welfarism and virtue ethics in the normative analysis of economic models with endogenous preferences. We introduce the moral evaluation function (MEF), which ranks alternatives based purely on virtue ethics, and define the social objective function (SOF), which combines the Social Welfare Function (SWF) and the MEF. In a model of intergenerational altruism with endogenous time preference, using numerical simulations we show that maximizing the SWF may not yield a socially desirable state if the society values virtue. This problem can be resolved by using the SOF to evaluate alternative social states.

Pages: 35 pages
Date: 2015-02
New Economics Papers: this item is included in nep-cmp and nep-evo
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: A Reformulation of Normative Economics for Models with Endogenous Preferences (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:upd:utppwp:049

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