Choice and individual welfare

• 成果类型: Article
• 署名作者: Chambers, Christopher P.; Hayashi, Takashi
• 署名单位: University of Texas System; University of Texas Austin; University of California System; University of California San Diego
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2012.01.013
• 发表日期: 2012
• 页码: 1818-1849
• 关键词: choice; welfare; Individual welfare functional; Behavioral welfare

摘要

We propose an abstract method of systematically assigning a rational ranking to non-rationalizable choice data. Our main idea is that any method of ascribing welfare to an individual as a function of choice is subjective, and depends on the economist undertaking the analysis. We provide a simple example of the type of exercise we propose. Namely, we define an individual welfare functional as a mapping from stochastic choice functions into weak orders. A stochastic choice function (or choice distribution) gives the empirical frequency of choices for any possible opportunity set (framing factors may also be incorporated into the model). We require that for any two alternatives x and y, if our individual welfare functional recommends x over y given two distinct choice distributions, then it also recommends x over y for any mixture of the two choice distributions. Together with some mild technical requirements, such an individual welfare functional must weight every opportunity set and assign a utility to each alternative x which is the sum across all opportunity sets of the weighted probability of x being chosen from the set. It therefore requires us to have a prior view about how important or representative a choice of x at a given situation is. (C) 2012 Elsevier Inc. All rights reserved.