TY - JOUR
T1 - The revealed preference theory of changing tastes
AU - Gul, Faruk
AU - Pesendorfer, Wolfgang
N1 - Funding Information:
Acknowledgements. This research was supported by grants SES9911177, SES0236882, SES9905178 and SES0214050 from the National Science Foundation.
PY - 2005/4
Y1 - 2005/4
N2 - We analyse preferences over finite decision problems in order to model decision-makers with "changing tastes". We provide conditions on these preferences that identify the Strotz model of consistent planning. Building on an example given by Peleg and Yaari (1973), we show that for problems with infinitely many choices, Strotz's representation of preferences may not be well defined. For that case, we propose a well-defined approximation which is empirically indistinguishable from the Strotz preference that is being approximated.
AB - We analyse preferences over finite decision problems in order to model decision-makers with "changing tastes". We provide conditions on these preferences that identify the Strotz model of consistent planning. Building on an example given by Peleg and Yaari (1973), we show that for problems with infinitely many choices, Strotz's representation of preferences may not be well defined. For that case, we propose a well-defined approximation which is empirically indistinguishable from the Strotz preference that is being approximated.
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U2 - 10.1111/j.1467-937X.2005.00338.x
DO - 10.1111/j.1467-937X.2005.00338.x
M3 - Article
AN - SCOPUS:16344387180
SN - 0034-6527
VL - 72
SP - 429
EP - 448
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 2
ER -