Institutions as Determinants of Preference Change– A One Way Relation?

In recent economic literature, there has been an increasing interest in modellingpreferences as endogenous. Some arguments go along the lines that institutions shapepreferences. This paper suggests that adopting a more substantive concept ofpreferences furthers our understanding of how they systematically shape institutions.We integrate social-psychological concepts and combine them with an account oflearning. Thus, a model of the dynamic interrelation between preferences andinstitutions can be developed. While institutional change can certainly be partlyexplained in terms of changing incentives, we offer an approach that goes beyond thestandard explanation...