Cookies?
Library Header Image
LSE Research Online LSE Library Services

Rationalizations and mistakes: optimal policy with normative ambiguity

Goldin, Jacob and Reck, Daniel (2018) Rationalizations and mistakes: optimal policy with normative ambiguity. AEA Papers and Proceedings, 108. pp. 98-102. ISSN 2574-0768

[img]
Preview
Text - Accepted Version
Download (341kB) | Preview
Identification Number: 10.1257/pandp.20181042

Abstract

Behavior that appears to violate neoclassical assumptions can often be rationalized by incorporating an optimization cost into decision-makers' utility functions. Depending on the setting, these costs may reflect either an actual welfare loss for the decision-maker who incurs them or a convenient (but welfare irrelevant) modeling device. We consider how the resolution of this normative ambiguity shapes optimal policy in a number of contexts, including default options, inertia in health plan selection, take-up of social programs, programs that encourage moving to a new neighborhood, and tax salience.

Item Type: Article
Official URL: https://www.aeaweb.org/journals/pandp
Additional Information: © 2018 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
Sets: Departments > Economics
Date Deposited: 13 Jul 2018 09:27
Last Modified: 31 Aug 2019 23:02
URI: http://eprints.lse.ac.uk/id/eprint/89237

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics