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  3. American Economic Review
  4. February 2021
  5. A Theory of Chosen Preferences

A Theory of Chosen Preferences

  • B. Douglas Bernheim
  • Luca Braghieri
  • Alejandro Martínez-Marquina
  • David Zuckerman
American Economic Review
vol. 111, no. 2, February 2021
(pp. 720-54)
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Abstract

We propose and develop a dynamic theory of endogenous preference formation in which people adopt worldviews that shape their judgments about their experiences. The framework highlights the role of mindset flexibility, a trait that determines the relative weights the decision-maker places on her current and anticipated worldviews when evaluating future outcomes. The theory generates rich behavioral dynamics, thereby illuminating a wide range of applications and providing potential explanations for a variety of observed phenomena.

Citation

Bernheim, B. Douglas, Luca Braghieri, Alejandro Martínez-Marquina, and David Zuckerman. 2021. "A Theory of Chosen Preferences." American Economic Review, 111 (2): 720-54. DOI: 10.1257/aer.20190390

Additional Materials

JEL Classification

  • D11 Consumer Economics: Theory
  • D81 Criteria for Decision-Making under Risk and Uncertainty
  • D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
  • Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification