Behavioral economics has shaken the view that individuals have well-defined,
consistent and stable preferences. This raises a challenge for
welfare economics, which takes as a key postulate that individual preferences
should be respected. We argue, in agreement with Bernheim
(2009) and Bernheim and Rangel (2009) that behavioral economics is
compatible with consistency of partial preferences, and explore how the
Bernheim-Rangel approach can be extended to deal with distributive
issues. We revisit some key results of the theory in a framework with
partial preferences and show how one can derive partial orderings of
individual and social situations.
"Behavioral Welfare Economics and Redistribution."
American Economic Journal: Microeconomics,
Behavioral Economics: Underlying Principles
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Social Choice; Clubs; Committees; Associations
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies