Debiasing or regularisation?:Two interpretations of the concept of ‘true preference’ in behavioural economics

Sugden, Robert (2021) Debiasing or regularisation?:Two interpretations of the concept of ‘true preference’ in behavioural economics. Theory and Decision. ISSN 0040-5833 (In Press)

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Abstract

I reconsider Bleichrodt, Pinto Prades and Wakker’s (BPW) 2001 paper about eliciting utility measures from stated preference surveys. That paper pioneers a method that is now widely used in behavioural economics to correct individuals’ ‘biases’ and to recover their ‘true preferences’. However, BPW propose this method as way of dealing with inconsistent responses to stated preference surveys, in contrast to more recent applications which aim to help individuals to avoid supposed mistakes in their private choices. I argue that the concepts of true preference and bias are empirically ungrounded, but that BPW’s approach can interpreted as not invoking those concepts. By ‘regularising’ preferences revealed in actual choice, this approach constructs measures of individual welfare that are broadly aligned with actual preferences and consistent with normative standards of rationality that are appropriate for public decision-making. Public decision-makers’ normative judgements are made explicit, rather than being disguised as apparently empirical claims about true preferences.

Item Type: Article
Uncontrolled Keywords: regularisation,true preference,behavioural bias,behavioural welfare economics,stated preference,economics, econometrics and finance(all) ,/dk/atira/pure/subjectarea/asjc/2000
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: LivePure Connector
Date Deposited: 04 Jan 2022 12:31
Last Modified: 04 Jan 2022 12:31
URI: https://ueaeprints.uea.ac.uk/id/eprint/82875
DOI:

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