Role Models that Make You Unhappy:Light Paternalism, Social Learning and Welfare

Behavioral (e.g. consumption) patterns of boundedly rational agents can lead these agents intolearning dynamics that appear to be “wasteful” in terms of well-being or welfare. Within settingsdisplaying preference endogeneity, it is however still unclear how to conceptualize well-being.This paper contributes to the discussion by suggesting a formal model of preference learning thatcan inform the construction of alternative notions of dynamic well-being. Based on theassumption that interacting agents are subject to two biases that make them systematically prefersome cultural variants over others, a procedural notion of well-being can be developed, based onthe idea that policy should identify and confine conditions that generate dynamic instability inpreference trajectories.