The goal of this paper is to draw some lessons for economic theory from research in psychology, social psychology and, more briefly, in biology, which purports to explain the formation of social preferences. We elicit the basic mechanisms whereby a variety of social preferences are determined in...

In Nudge, Cass Sunstein and Richard Thaler describe how public and private institutions can improve on individual choices by nudging individuals into making selections that are right for them. Rejecting the Econ-101 caricature of the rational utility maximizer as inaccurate, Sunstein and Thaler...

Human decision making is a process guided by different and partly competing mo-tivations that can each dominate behavior and lead to different effects depending on strength and circumstances. "Over-stylizingʺ neglects such competing concerns and context-dependence, although it facilitates the...

This note reviews consumers’ preference orderings in economics and shows that irrationality is a poor explanation for apparent violations of some axioms of order. Apparent violations seem to be better explained by the fact that consum-ers’ utility functions, if they exist at all, might not...

In this paper we propose a theory of cognitive dissonance through imperfect memory. Cognitive dissonance is the tendency of a person to engage in self justification after a decision. We offer an interpretation of the single decision cognitive dissonance experiments: an agent has an unknown cost...

Most decisions in life are gambles. Should I speed up or slow down as I approach the yellow traffic light ahead? Should I invest in the stock market or in treasury bills? Should I undergo surgery or radiation therapy to treat my tumor? From mundane choices rendered with scarcely a moment's...

Rational choice theory analyzes how an agent can rationally act, given his or her preferences, but says little about where those preferences come from. Instead, preferences are usually assumed to be fixed and exogenously given. We introduce a framework for conceptualizing preference formation...

The time tradeoff (TTO) method is popular in medical decision making for valuing health states. We use it to elicit economists' preferences for publishing in top economic journals and living without limbs. The economists value the journals highly, and have a clear preference between them, with...

A private commodity is divided among agents with single peaked preferences over their share. A rationing method elicits individual peaks (demands); if the commodity is overdemanded (resp. underdemanded), no agent receives more (resp. less) than his peak. A fixed path rationing method allocates...

The opportunity to tell a white lie (i.e., a lie that benefits another person) generates a moral conflict between two opposite moral dictates, one pushing towards telling always the truth and the other pushing towards helping others. Here we study how people resolve this moral conflict. What...