Hostname: page-component-8448b6f56d-42gr6 Total loading time: 0 Render date: 2024-04-19T03:25:48.636Z Has data issue: false hasContentIssue false
  • English
  • Français

Role models that make you unhappy: light paternalism, social learning, and welfare

Published online by Cambridge University Press:  12 February 2013

CHRISTIAN SCHUBERT  and
CHRISTIAN CORDES
CHRISTIAN SCHUBERT*
Affiliation:
Institute of Economics, Brandenburg University of Technology, Cottbus, Germany
CHRISTIAN CORDES*
Affiliation:
Faculty of Business Studies & Economics, University of Bremen, Bremen, Germany
*
*Email: c.schubert@tu-cottbus.de
**Email: cccordes@uni-bremen.de
Get access Rights & Permissions [Opens in a new window]

Abstract

Behavioral (e.g., consumption) patterns of boundedly rational agents can lead these agents into learning dynamics that appear to be ‘wasteful’ in terms of well-being or welfare. Within settings displaying preference endogeneity, it is however still unclear how to conceptualize well-being. This paper contributes to the discussion by suggesting a formal model of preference learning that can inform the construction of non-standard notions of dynamic well-being. Based on the assumption that interacting agents are subject to two biases that make them systematically prefer some cultural variants over others, we develop a procedural notion of well-being, based on the idea that policy should modify institutional conditions that generate dynamic instability in preference trajectories, while leaving individual choice sets unrestricted.

Type
Research Article
Information
Journal of Institutional Economics , Volume 9 , Issue 2 , June 2013 , pp. 131 - 159
Copyright
Copyright © Millennium Economics Ltd 2013

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahuvia, A. (2008), ‘If Money Doesn't Make Us Happy, Why Do We Act as If It Does?’ Journal of Economic Psychology, 29: 491–507.Google Scholar
Anand, P. and Gray, A. (2009), ‘Obesity as Market Failure: Could a “Deliberative Economy” Overcome the Problems of Paternalism?’ Kyklos, 62: 182–190.Google Scholar
Ariely, D. and Loewenstein, G. (2006), ‘The Heat of the Moment: The Effect of Sexual Arousal on Sexual Decision Making’, Journal of Behavioral Decision Making, 19: 87–98.Google Scholar
Ariely, D., Loewenstein, G., and Prelec, D. (2006), ‘Tom Sawyer and the Construction of Value’, Journal of Economic Behavior & Organization, 60: 1–10.Google Scholar
Aronson, E., Wilson, T. D., and Akert, R. M. (2002), Social Psychology, Upper Saddle River, NJ: Prentice-Hall.Google Scholar
Aronsson, T. and Johansson-Stenman, O. (2008), ‘When the Joneses’ Consumption Hurts: Optimal Public Good Provision and Nonlinear Income Taxation’, Journal of Public Economics, 92: 986–997.Google Scholar
Atkinson, A. B. (2009), ‘Economics as a Moral Science’, Economica, 76: 791–804.Google Scholar
Beaulier, S. and Caplan, B. (2007), ‘Behavioral Economics and Perverse Effects of the Welfare State’, Kyklos, 60: 485–507.Google Scholar
Benjamin, D. J. and Laibson, D. I. (2003), ‘Good Policies for Bad Governments: Behavioral Political Economy’, Proceedings of the Federal Reserve Bank of Boston 48th Economic Conference, How Humans Behave: Implications for Economics and Economic Policy, Boston, MA, 8–10 June.Google Scholar
Berg, N. (2003), ‘Normative Behavioral Economics’, Journal of Socio-Economics, 32: 411–427.CrossRefGoogle Scholar
Bernheim, B. D. (2009), ‘Behavioral Welfare Economics’, Journal of the European Economic Association, 7: 267–319.Google Scholar
Bernheim, B. D. and Rangel, A. (2009), ‘Beyond Revealed Preference: Theoretic Foundations for Behavioral Economics’, Quarterly Journal of Economics, 124: 51–104.Google Scholar
Bisin, A. and Verdier, T. (2001), ‘The Economics of Cultural Transmission and the Dynamics of Preferences’, Journal of Economic Theory, 97: 298–319.Google Scholar
Bolton, G. E. and Ockenfels, A. (2011), ‘Behavioral Economic Engineering’, Journal of Economic Psychology, 33: 665–676.Google Scholar
Bovens, L. (2008), ‘The Ethics of Nudge’, in Grüne-Yanoff, T. and Hansson, S. O. (eds.), Preference Change: Approaches from Philosophy, Economics and Psychology, Berlin: Springer, pp. 207–220.Google Scholar
Boyd, R. and Richerson, P. J. (1985), Culture and the Evolutionary Process, Chicago, IL: University of Chicago Press.Google Scholar
Brandt, R. (1979), A Theory of the Good and the Right, Oxford: Clarendon Press.Google Scholar
Brickman, P. and Campbell, D. T. (1971), ‘Hedonic Relativism and Planning the Good Society’, in Apley, M. H. (ed.), Adaptation-Level Theory: A Symposium, New York: Academic Press, pp. 287–302.Google Scholar
Camerer, C., Issacharoff, S., Loewenstein, G., O'Donoghue, T., and Rabin, M. (2003), ‘Regulation for Conservatives: Behavioral Economics and the Case for “Asymmetric Paternalism”’, University of Pennsylvania Law Review, 151: 1211–1254.Google Scholar
Cavalli-Sforza, L. L. and Feldman, M. W. (1981), Cultural Transmission and Evolution: A Quantitative Approach, New Haven, CT: Princeton University Press.Google Scholar
Cowen, T. (1993), ‘The Scope and Limits of Preference Sovereignty’, Economics & Philosophy, 9: 253–269.Google Scholar
De Fraja, M. (2009), ‘The Origin of Utility: Sexual Selection and Conspicuous Consumption’, Journal of Economic Behavior and Organization, 72: 51–69.Google Scholar
Di Tella, R., MacCulloch, R. J., and Oswald, A. J. (2001), ‘Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness’, American Economic Review, 91: 335–341.Google Scholar
Dolan, P., Edlin, R., Tsuchiya, A., and Wailoo, A. (2007), ‘It Ain't What You Do, It's the Way that You Do It: Characteristics of Procedural Justice and their Importance in Social Decision-Making’, Journal of Economic Behavior & Organization, 64: 157–170.Google Scholar
Duesenberry, J. S. (1949), Income, Savings, and the Theory of Consumer Behaviour, Cambridge, MA: Harvard University Press.Google Scholar
Dworkin, G. (2010), ‘Paternalism’, in Stanford Encyclopedia of Philosophy, http://plato.stanford.edu/entries/paternalism/ (accessed April 19, 2012).Google Scholar
Eaton, B. C. and Eswaran, M. (2009), ‘Well-Being and Affluence in the Presence of a Veblen Good’, Economic Journal, 119: 1088–1104.Google Scholar
Elster, J. (1982), ‘Sour Grapes: Utilitarianism and the Genesis of Wants’, in Sen, A. K. and Williams, B. A. (eds.), Utilitarianism and Beyond, Cambridge: Cambridge University Press, pp. 219–238.Google Scholar
Fisher, R. A. (1930), The Genetical Theory of Natural Selection, Oxford: Clarendon Press.Google Scholar
Frank, R. H. (1999), Luxury Fever, New York: The Free Press.Google Scholar
Frank, R. H. (2008), ‘Should Public Policy Respond to Positional Externalities?’ Journal of Public Economics, 92: 1777–1786.CrossRefGoogle Scholar
Frankfurt, H. G. (1971), ‘Freedom of the Will and the Concept of a Person’, Journal of Philosophy, 68: 5–20.Google Scholar
Frederick, S. and Loewenstein, G. (1999), ‘Hedonic Adaptation’, in Diener, E., Kahneman, D., and Schwarz, N. (eds.), Well-Being: The Foundations of Hedonic Psychology, New York: Russell Sage Foundation, pp. 302–329.Google Scholar
Frey, B. S., Benz, M., and Stutzer, A. (2004), ‘Introducing Procedural Utility: Not Only What, but also How Matters’, Journal of Institutional and Theoretical Economics, 160: 377–401.Google Scholar
Frey, B. S. and Stutzer, A. (2002), ‘What can Economists Learn from Happiness Research?’ Journal of Economic Literature, 60: 402–435.Google Scholar
Friedman, D. and Ostrov, D. N. (2008), ‘Conspicuous Consumption Dynamics’, Games and Economic Behavior, 64: 121–145.Google Scholar
George, D. (2004), Preference Pollution, Ann Arbor, MI: University of Michigan Press.Google Scholar
George, D. (2006), ‘Moral Implications of Preference Change’, Society, XX, 33–38.Google Scholar
Glaeser, E. (2006), ‘Paternalism and Psychology’, University of Chicago Law Review, 73: 133–156.Google Scholar
Griffin, J. (1986), Well-Being, Oxford: Clarendon Press.Google Scholar
Grüne-Yanoff, T. (2009), ‘Welfare Notions for Soft Paternalism’, Papers on Economics & Evolution, #0917, ed. by the Max Planck Institute of Economics, Jena, Germany.Google Scholar
Grüne-Yanoff, T. (2012), ‘Old Wine in New Casks: Libertarian Paternalism Still Violates Liberal Principles’, Social Choice & Welfare, 38: 635–645.Google Scholar
Harsanyi, J. C. (1982), ‘Morality and the Theory of Rational Behavior’, in Sen, A. K. and Williams, B. A. (eds.), Utilitarianism and Beyond, Cambridge: Cambridge University Press, pp. 39–62.Google Scholar
Hausman, D. M. and Welch, B. (2010), ‘Debate: To Nudge or Not to Nudge’, Journal of Political Philosophy, 18: 123–136.Google Scholar
Henrich, J. and Boyd, R. (2002), ‘On Modeling Cognition and Culture’, Journal of Cognition and Culture, 2: 87–112.Google Scholar
Henrich, J. and Gil-White, F. J. (2001), ‘The Evolution of Prestige: Freely Conferred Deference as a Mechanism for Enhancing the Benefits of Cultural Transmission’, Evolution and Human Behavior, 22: 165–196.Google Scholar
Hirsch, F. (1976), Social Limits to Growth, Cambridge, MA: Harvard University Press.Google Scholar
Hopkins, E. and Kornienko, T. (2004), ‘Running to Keep in the Same Place: Consumer Choice as a Game of Status’, American Economic Review, 94: 1085–1107.Google Scholar
Johansson-Stenman, O. and Martinsson, P. (2006), ‘Honestly, Why are You Driving a BMW?’ Journal of Economic Behavior and Organization, 60: 129–146.Google Scholar
Kahneman, D., Wakker, P. P., and Sarin, R. (1997), ‘Back to Bentham? Explorations of Experienced Utility’, Quarterly Journal of Economics, 112: 375–405.Google Scholar
Kirkpatrick, M. (1982), ‘Sexual Selection and the Evolution of Female Choice’, Evolution, 36: 1–12.Google Scholar
Köszegi, B. and Rabin, M. (2008), ‘Choices, Situations, and Happiness’, Journal of Public Economics, 92: 1821–1832.Google Scholar
Labov, W. (2001), Principles of Linguistic Change: Social Factors, Oxford: Blackwell.Google Scholar
Lande, R. (1981), ‘Models of Speciation by Sexual Selection on Polygenic Traits’, Proceedings of the National Academy of Science, 78: 3721–3725.Google Scholar
Layard, R. (2005), Happiness: Lessons from a New Science, London: Penguin.Google Scholar
Lessig, L. (1995), ‘The Regulation of Social Meaning’, University of Chicago Law Review, 62: 943–1045.Google Scholar
Loewenstein, G. and E. Angner (2003), ‘Predicting and Indulging Changing Preferences’, in Loewenstein, G., Read, D., and Baumeister, R. F. (eds.), Time and Decision: Economic and Psychological Perspectives on Intertemporal Choice, New York: Russell Sage Foundation, pp. 351–391.Google Scholar
Loewenstein, G. and Haisley, E. C. (2008), ‘The Economist as Therapist: Methodological Ramifications of “Light” Paternalism’, in Caplin, A. and Schotter, A. (eds.), The Foundations of Positive and Normative Economics, Oxford: Oxford University Press, pp. 210–245.Google Scholar
McElreath, R. and Boyd, R. (2007), Modeling the Evolution of Social Behavior: A Guide for the Perplexed, Chicago, IL: University of Chicago Press.Google Scholar
McQuillin, B. and Sugden, R. (2012). ‘Reconciling Normative and Behavioural Economics: The Problems to be Solved’, Social Choice & Welfare, 38: 553–567.Google Scholar
Ng, Y.-K. (1987a), ‘Diamonds are a Government's Best Friend: Burden-Free Taxes on Goods Valued for their Values’, American Economic Review, 77: 186–191.Google Scholar
Ng, Y.-K. (1987b), ‘Relative Income Effects and the Appropriate Level of Public Expenditure’, Oxford Economic Papers, 39: 293–300.Google Scholar
Ng, Y.-K. (2003), ‘From Preference to Happiness: Towards a More Complete Welfare Economics’, Social Choice & Welfare, 20: 307–350.Google Scholar
Parisi, F. and von Wangenheim, G. (2006), ‘Legislation and Countervailing Effects from Social Norms’, in Schubert, C. and von Wangenheim, G. (eds.), Evolution and Design of Institutions, London: Routledge, pp. 25–55.Google Scholar
Piketty, T. (1998), ‘Self-Fulfilling Beliefs about Social Status’, Journal of Public Economics, 70: 115–132.Google Scholar
Price, G. R. (1970), ‘Selection and Covariance’, Nature, 227: 520–521.Google Scholar
Qizilbash, M. (2012), ‘Informed Desire and the Ambitions of Libertarian Paternalism’, Social Choice & Welfare, 38: 647–658.Google Scholar
Rege, M. (2008), ‘Why Do People Care about Social Status?’ Journal of Economic Behavior and Organization, 66: 233–242.CrossRefGoogle Scholar
Richerson, P. J. and Boyd, R. (2005), Not by Genes Alone: How Culture Transformed Human Evolution, Chicago, IL: University of Chicago Press.Google Scholar
Samuelson, P. A. (1948), ‘Consumption Theory in Terms of Revealed Preference’, Economica, 60: 243–253.CrossRefGoogle Scholar
Schubert, C. (2012), ‘Pursuing Happiness’, Kyklos, 65: 245–261.Google Scholar
Sen, A. K. (1987), On Ethics and Economics, London: Basil Blackwell.Google Scholar
Sobel, D. (1994) ‘Full Information Accounts of Well-Being’, Ethics, 104: 784–810.Google Scholar
Sugden, R. (2004) ‘The Opportunity Criterion: Consumer Sovereignty without the Assumption of Coherent Preferences’, American Economic Review, 94: 1014–1033.Google Scholar
Sugden, R. (2006), ‘What We Desire, What We have Reason to Desire, Whatever We might Desire: Mill and Sen on the Value of Opportunity’, Utilitas, 18: 33–51.Google Scholar
Sugden, R. (2008), ‘Why Incoherent Preferences Do Not Justify Paternalism’, Constitutional Political Economy, 19: 226–233.Google Scholar
Sugden, R. (2009), ‘On Nudging: A Review of Nudge: Improving Decisions about Health, Wealth, and Happiness’, International Journal of the Economics of Business, 16: 365–373.Google Scholar
Sugden, R. (2010), ‘Opportunity as Mutual Advantage’, Economics and Philosophy, 26: 47–68.Google Scholar
Thaler, R. H. and Sunstein, C. R. (2003), ‘Libertarian Paternalism’, American Economic Review, 93: 175–179.Google Scholar
Thaler, R. H. and Sunstein, C. R. (2008), Nudge: Improving Decisions about Health, Wealth, and Happiness, New Haven, CT: Princeton University Press.Google Scholar
van Praag, B. M. S. and Baarsma, B. E. (2005), ‘Using Happiness Surveys to Value Intangibles: The Case of Airport Noise’, Economic Journal, 115: 224–246.Google Scholar
Vanberg, V. J. (2006), ‘Human Intentionality and Design in Cultural Evolution’, in Schubert, C. and von Wangenheim, G. (eds.), Evolution and Design of Institutions, London: Routledge, pp. 197–212.Google Scholar
Veblen, T. (1898), The Theory of the Leisure Class, New York: Macmillan.Google Scholar
Witt, U. and Schubert, C. (2008), ‘Constitutional Interests in the Face of Innovations: How Much Do We Need to Know about Risk Preferences?’ Constitutional Political Economy, 19: 203–225.Google Scholar