Biased preferences equilibrium

Ariel Rubinstein; Asher Wolinksy

doi:10.1017/S0266267120000462

Biased preferences equilibrium

Ariel Rubinstein, Asher Wolinksy

Research output: Contribution to journal › Article › peer-review

Abstract

We model economic environments in which individual choice sets are fixed and the level of a specific parameter that systematically modifies the preferences of all agents is determined endogenously to achieve equilibrium. The equilibrium concept, Biased Preferences Equilibrium, is reminiscent of competitive equilibrium: agents' choice sets and their preferences are independent of the behaviour of other agents, the combined choices must satisfy overall feasibility constraints and the endogenous adjustment of the equilibrating preference parameter is analogous to equilibrating price adjustment. The concept is applied in a number of economic examples.

Original language	English (US)
Pages (from-to)	24-33
Number of pages	10
Journal	Economics and Philosophy
Volume	38
Issue number	1
DOIs	https://doi.org/10.1017/S0266267120000462
State	Published - Mar 24 2022

Keywords

Biased preferences
Economic environment
Equilibrium

ASJC Scopus subject areas

Philosophy
Economics and Econometrics

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10.1017/S0266267120000462

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Y1 - 2022/3/24

N2 - We model economic environments in which individual choice sets are fixed and the level of a specific parameter that systematically modifies the preferences of all agents is determined endogenously to achieve equilibrium. The equilibrium concept, Biased Preferences Equilibrium, is reminiscent of competitive equilibrium: agents' choice sets and their preferences are independent of the behaviour of other agents, the combined choices must satisfy overall feasibility constraints and the endogenous adjustment of the equilibrating preference parameter is analogous to equilibrating price adjustment. The concept is applied in a number of economic examples.

AB - We model economic environments in which individual choice sets are fixed and the level of a specific parameter that systematically modifies the preferences of all agents is determined endogenously to achieve equilibrium. The equilibrium concept, Biased Preferences Equilibrium, is reminiscent of competitive equilibrium: agents' choice sets and their preferences are independent of the behaviour of other agents, the combined choices must satisfy overall feasibility constraints and the endogenous adjustment of the equilibrating preference parameter is analogous to equilibrating price adjustment. The concept is applied in a number of economic examples.

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KW - Equilibrium

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Biased preferences equilibrium

Abstract

Keywords

ASJC Scopus subject areas

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