This paper examines the implications of habit forming hypothesis for welfare theory. both myopic and rational habit forming models are discussed. First, I analyse the main criteria proposed by myopic habit forming models for measuring individual and social welfare. I show that they are...

A volume of recent experimental evidence suggests that individual preferences may not be independent of the consumer's vantage point. In particular agents may suffer from loss aversion (also known as the endowment effect and status quo bias). Allocations which appear desirable ex ante may...

This paper examines the implications of habit forming hypothesis for welfare theory. both myopic and rational habit forming models are discussed. First, I analyse the main criteria proposed by myopic habit forming models for measuring individual and social welfare. I show that they are...

A volume of recent experimental evidence suggests that individual preferences may not be independent of the consumer's vantage point. In particular agents may suffer from loss aversion (also known as the endowment effect and status quo bias). Allocations which appear desirable ex ante may...