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4 - Preference Biases

Published online by Cambridge University Press:  02 December 2019

Mario J. Rizzo
Affiliation:
New York University
Glen Whitman
Affiliation:
California State University, Northridge
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Summary

The evidence for preference biases is very often flawed, incomplete, or misinterpreted. For example, inconsistent rates of time discount are largely eliminated when considered relative to the individual’s perception of time. Preference reversals in real time from patient to impatient behavior occur only in a minority of cases. Time inconsistency, when it occurs, need not be associated with actual harms to decision-makers. Evidence for the existence of endowment effects is problematic. Gaps between willingness to pay and willingness to accept have no normative significance. The evidence for impact bias is confused and weak, and to the extent that it occurs, its function has eluded most analysts. In addition to these concerns, we find that the preferences typically treated as normatively superior by behavioral paternalists are often implicated by biases as well.

Type
Chapter
Information
Escaping Paternalism
Rationality, Behavioral Economics, and Public Policy
, pp. 91 - 118
Publisher: Cambridge University Press
Print publication year: 2019

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  • Preference Biases
  • Mario J. Rizzo, New York University, Glen Whitman, California State University, Northridge
  • Book: Escaping Paternalism
  • Online publication: 02 December 2019
  • Chapter DOI: https://doi.org/10.1017/9781139061810.005
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  • Preference Biases
  • Mario J. Rizzo, New York University, Glen Whitman, California State University, Northridge
  • Book: Escaping Paternalism
  • Online publication: 02 December 2019
  • Chapter DOI: https://doi.org/10.1017/9781139061810.005
Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Preference Biases
  • Mario J. Rizzo, New York University, Glen Whitman, California State University, Northridge
  • Book: Escaping Paternalism
  • Online publication: 02 December 2019
  • Chapter DOI: https://doi.org/10.1017/9781139061810.005
Available formats
×