Behavioral economics has shaken the view that individuals have welldefined, consistent, and stable preferences. This raises a challenge for welfare economics, which takes asa 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 orderingsof individual and social situations. (JEL D03, D63, D71, H23).
All Science Journal Classification (ASJC) codes
- Economics, Econometrics and Finance(all)