Bounded rationality and public policy a perspective from behavioural economics

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1. Verfasser: Munro, Alistair (VerfasserIn)
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Sprache:English
Veröffentlicht: Dordrecht [u.a.] Springer 2009
Schriftenreihe:The economics of non-market goods and resources 12
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Datensatz im Suchindex

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adam_text Contents 1 Introduction .................................................. 1 1.1 Merit Wants .............................................. 3 1.1.1 The Link Between Bounded Rationality and Merit Wants 3 1.1.2 Other-Regarding Behaviour and Expressive Preferences .. 4 1.2 Definitions ............................................... 5 1.2.1 Frames .......................................... 6 1.2.2 Frames and Welfare ................................ 8 1.2.3 Uncertainty and Information Processing ............... 10 1.2.4 Merit Goods ...................................... 11 1.3 Main Points .............................................. 13 2 Anomalies .................................................... 17 2.1 Introduction .............................................. 17 2.2 The Reliability of the Evidence .............................. 18 2.3 Reference Dependent Preferences ........................... 22 2.3.1 Organising the Evidence ............................ 32 2.3.2 Prospect Theory - Cumulative and Riskless ............ 33 2.4 Mental Accounting ........................................ 39 2.5 Preference Reversal ........................................ 44 2.6 Conclusions .............................................. 47 3 Information, Learning and Markets ............................. 49 3.1 Introduction .............................................. 49 3.2 Probabilities, Information Processing and Bayes Theorem ...... 50 3.2.1 Representativeness and Availability Biases ............. 50 3.2.2 Adjustment and Anchoring ......................... 51 3.2.3 Confirmation Biases ................................ 54 3.3 Ambiguity Aversion and the Ellsberg Paradox ................. 56 3.3.1 Summing Up Bayes Theorem ....................... 58 3.4 How Markets Might Lead to Individually Rational Behaviour ..... 58 (¡j Contents 3.4.1 Summing Up Market Learning ....................... 64 3.5 Learning ................................................. 65 3.5.1 Melioration ....................................... 69 3.6 Conclusions .............................................. 73 4 Markets and Reference Dependent Preferences ................... 75 4.1 Introduction .............................................. 75 4.2 Partial Competitive Equilibrium ............................. 76 4.3 Imperfect Competition ..................................... 80 4.4 General Equilibrium ....................................... 83 4.5 Reference Dependent Preferences ............................ 85 4.5.1 Equilibrium and General Equilibrium ................. 87 4.5.2 Discussion ........................................ 90 4.6 Conclusions .............................................. 91 5 Welfare ....................................................... 93 5.1 Introduction .............................................. 93 5.2 Frames and Paretian Welfare Economics ...................... 95 5.3 Responses to the Evidence ..................................100 5.3.1 Switch Theories ...................................100 5.3.2 Allow Individual Welfare to be Frame Dependent .......101 5.3.3 No Ordering ......................................102 5.4 Optimal or Golden Frames ..................................103 5.4.1 Markets and Referenda as Optimal Frames ............. 1 05 5.5 Information Aggregation ...................................108 5.5.1 Extra-Preference Information - Relaxing WEF ......... Ill 5.5.2 Bayesian .........................................112 5.6 Paternalism ...............................................114 5.6.1 The Justification of Paternalistic Intervention ........... 114 5.6.2 Paternalism: The Contractarian View .................. 121 5.6.3 Summing Up ...................................... 122 5.6.4 Ranking Frames Using Consent and Other Arguments from Paternalism .................................. 1 23 5.6.5 Hypothetical Rational Consent .......................127 5.6.6 Contractarian Consent ..............................128 5.7 Conclusions ..............................................130 6 Public Policy and Bounded Rationality ...........................133 6.1 Introduction ..............................................133 6.1.1 Bounded Rationality: Identification and Valued Added ... 133 6.2 Market Failure ............................................138 6.2.1 Asymmetric Information ............................139 6.2.2 Near-Optimality ...................................139 6.2.3 The Boundaries of the State .........................142 Contents xiii 6.3 Voting for the Nanny State: Regulation of Markets by Self Aware Consumers ...............................................148 6.4 Political Economy - An Illustration ..........................151 6.4.1 Efficiency and Bias .................................152 6.4.2 Term Limits .......................................155 6.4.3 Candidacy ........................................156 6.5 Conclusions: Possible Worlds ...............................159 6.6 Appendix ................................................160 7 Standard Fiscal Policy and Merit Wants ..........................163 7.1 Introduction ..............................................163 7.2 Individualistic Welfare Functions, Private Failure ...............164 7.2.1 Individualistic Welfare Functions, Public Failure ........167 7.2.2 Two Spurious Categories of Merit Wants ..............168 7.2.3 Non-individualistic Welfare Functions .................169 7.3 Objective Functions ........................................170 7.3.1 Risk and Uncertainty ...............................172 7.4 Optimal Policies ..........................................172 7.4.1 Wrong Information Models ..........................179 7.4.2 Limits of the Literature .............................179 7.5 The Value of Information ...................................180 7.5.1 The Value of Misinformation ........................183 7.6 Conclusion ...............................................185 8 Agency and Dependency ........................................187 8.1 Introduction ..............................................187 8.2 Dependency Relationships: Children ..........................189 8.2.1 The Child s Development of Economic Ideas ...........190 8.3 The Role of the State .......................................191 8.3.1 Relief from Duty ..................................192 8.3.2 Information Asymmetry ............................193 8.4 Regulating Care with Asymmetric Information .................195 8.4.1 Compulsory State Provision .........................197 8.4.2 Minimum Standards and Public Provision ..............197 8.4.3 Voluntary State Provision of Care .....................198 8.4.4 Mixed Policies ....................................199 8.4.5 Detection and Enforcement ..........................200 8.5 The Role of the State in Regulating Adulthood .................202 8.5.1 Welfare Functions with Children .....................203 8.5.2 Optimal Policy ....................................204 8.6 Conclusions ..............................................206 9 Tax Policy ....................................................207 9.1 Introduction ..............................................207 x¡v Contents 9.2 Monotonicity .............................................207 9.3 Technical Efficiency - Marketed Goods .......................208 9.3.1 Technical Efficiency - Non-Marketed Goods ...........211 9.3.2 Cost Minimization .................................211 9.3.3 Summary .........................................213 9.4 Tax Reform Issues and Loss Aversion .........................213 9.4.1 The Problems Created by Reference Dependent Preferences .......................................213 9.4.2 Extensions to Consumer Theory ......................216 9.4.3 Implications of the Theory for Welfare Economics ......218 9.4.4 Implications of the Theory for Tax Reform Models ......220 9.4.5 Optimal Taxation ..................................221 9.4.6 Final Thoughts ....................................223 9.5 Conclusions ..............................................224 10 Framing Matters: Non-Standard Fiscal Policy ....................227 10.1 Introduction ..............................................227 10.2 Creating Mental Accounts ..................................228 10.2.1 Theory ...........................................229 10.3 Intertemporal Issues: Pensions and Savings Policy ..............236 1 0.3.1 Intertemporal Choice and Self-Control ................237 10.4 Regulating the Framing of Savings and Pensions Choices ........242 10.4.1 Planning Ahead ...................................245 10.5 The Framing of Tax Policies ................................249 10.5.1 Tax Evasion ......................................251 10.5.2 Labour Supply and Tax Framing .....................252 10.6 Conclusion ...............................................256 11 Stated Preference and Non-Market Decisions .....................259 11.1 Introduction ..............................................259 11.2 A Formal Approach to Optimal Decisions .....................263 11.2.1 Part-Whole and Scope Effects .......................265 11.2.2 Elicitation Effects .................................267 11.2.3 Responding to Anomalies ...........................270 11.3 Formal Comparison ........................................275 11.3.1 Example 1: WTA Versus WTP .......................278 11.3.2 Example 2: Elicitation Methods ......................281 11.4 Summing Up .............................................282 References .........................................................285 Index .............................................................313
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series The economics of non-market goods and resources
series2 The economics of non-market goods and resources
spellingShingle Munro, Alistair
Bounded rationality and public policy a perspective from behavioural economics
The economics of non-market goods and resources
Beschränkte Rationalität stw
Experimentelle Ökonomik stw
Politische Entscheidung stw
Public Choice stw
Theorie stw
Verhaltensökonomik stw
Psychologie
Wirtschaft
Decision making
Economics Psychological aspects
Political planning
Social choice
Wirtschaftliches Verhalten (DE-588)4197971-0 gnd
Wirtschaftspolitik (DE-588)4066493-4 gnd
Eingeschränkte Rationalität (DE-588)4403080-0 gnd
subject_GND (DE-588)4197971-0
(DE-588)4066493-4
(DE-588)4403080-0
title Bounded rationality and public policy a perspective from behavioural economics
title_auth Bounded rationality and public policy a perspective from behavioural economics
title_exact_search Bounded rationality and public policy a perspective from behavioural economics
title_full Bounded rationality and public policy a perspective from behavioural economics Alistair Munro
title_fullStr Bounded rationality and public policy a perspective from behavioural economics Alistair Munro
title_full_unstemmed Bounded rationality and public policy a perspective from behavioural economics Alistair Munro
title_short Bounded rationality and public policy
title_sort bounded rationality and public policy a perspective from behavioural economics
title_sub a perspective from behavioural economics
topic Beschränkte Rationalität stw
Experimentelle Ökonomik stw
Politische Entscheidung stw
Public Choice stw
Theorie stw
Verhaltensökonomik stw
Psychologie
Wirtschaft
Decision making
Economics Psychological aspects
Political planning
Social choice
Wirtschaftliches Verhalten (DE-588)4197971-0 gnd
Wirtschaftspolitik (DE-588)4066493-4 gnd
Eingeschränkte Rationalität (DE-588)4403080-0 gnd
topic_facet Beschränkte Rationalität
Experimentelle Ökonomik
Politische Entscheidung
Public Choice
Theorie
Verhaltensökonomik
Psychologie
Wirtschaft
Decision making
Economics Psychological aspects
Political planning
Social choice
Wirtschaftliches Verhalten
Wirtschaftspolitik
Eingeschränkte Rationalität
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volume_link (DE-604)BV017859446
work_keys_str_mv AT munroalistair boundedrationalityandpublicpolicyaperspectivefrombehaviouraleconomics