Revealed preference analysis with framing effects

Goldin, Jacob and Reck, Daniel (2019) Revealed preference analysis with framing effects. Journal of Political Economy. ISSN 0022-3808 (In Press)

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Abstract

In many settings, decision-makers’ behavior is observed to vary based on seemingly arbitrary factors. Such framing effects cast doubt on the welfare conclusions drawn from revealed preference analysis. We relax the assumptions underlying that approach to accommodate settings in which framing effects are present. Plausible restrictions of varying strength permit either partial- or point-identification of preferences for the decision-makers who choose consistently across frames. Recovering population preferences requires understanding the empirical relationship between decision-makers’ preferences and their sensitivity to the frame. We develop tools for studying this relationship and illustrate them with data on automatic enrollment into pension plans.

Item Type:	Article
Official URL:	https://www.journals.uchicago.edu/toc/jpe/current
Additional Information:	© 2019 The University of Chicago
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification:	C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General > C10 - General D - Microeconomics > D6 - Welfare Economics > D60 - General I - Health, Education, and Welfare > I3 - Welfare and Poverty > I30 - General
Date Deposited:	22 Aug 2019 13:36
Last Modified:	14 Oct 2019 23:10
URI:	http://eprints.lse.ac.uk/id/eprint/101443

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