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

Sugden, Robert (2022) Debiasing or regularisation? Two interpretations of the concept of ‘true preference’ in behavioural economics. Theory and Decision, 92 (3-4). 765–784. ISSN 0040-5833

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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 be 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
Additional Information: Funding Information: This work was supported by the Economic and Social Research Council (award ES/P008976/1) and by the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement 670103). In developing the ideas presented in this paper, I benefited from discussions with José Luis Pinto Prades. I thank two anonymous reviewers for helpful comments.
Uncontrolled Keywords: regularisation,true preference,behavioural bias,behavioural welfare economics,stated preference,true preference,behavioural welfare economics,behavioural bias,regularisation,stated preference,economics, econometrics and finance(all),social sciences(all),developmental and educational psychology,arts and humanities (miscellaneous),decision sciences(all),applied psychology,computer science applications ,/dk/atira/pure/subjectarea/asjc/2000
Faculty \ School: Faculty of Social Sciences > School of Economics
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Depositing User: LivePure Connector
Date Deposited: 04 Jan 2022 12:31
Last Modified: 22 Jun 2022 00:25
URI: https://ueaeprints.uea.ac.uk/id/eprint/82875
DOI: 10.1007/s11238-022-09876-x

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