Welfare economics and bounded rationality: The case for model-based approaches

Paola Manzini, Marco Mariotti

    Research output: Contribution to journalArticlepeer-review

    26 Citations (Scopus)

    Abstract

    In this paper we examine the problems facing a policy maker who observes inconsistent choices made by agents who are boundedly rational. We contrast a model-less and a model-based approach to welfare economics. We make the case for the model-based approach and examine its advantages as well as some problematic issues associated with it.
    Original languageEnglish
    Pages (from-to)343-360
    JournalJournal of Economic Methodology
    Volume21
    Issue number4
    Early online date8 Oct 2014
    DOIs
    Publication statusPublished - Dec 2014

    Keywords

    • Bounded rationality
    • Welfare
    • Choice theory

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