We develop a theoretical framework to study the psychology of poverty and 'aspirations
failure', defined as the failure to aspire to one's own potential. In our framework, rich and the …

Behavioural economics has not only posed serious challenges for the empirical adequacy of
rational choice, but also for its normative status. Since the 1990s, a large body of work has …

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 …

Fundamental non-recurrent choices, like location or education, affect the attitudes and
beliefs with which the individual consequently analyzes day-to-day decision problems …

We study the public policy implications of a model in which agents do not fully internalize all
the conscequences of their actions. Such a model unifies seemingly disconected models …

Recently several authors have proposed proxies of welfare that equate some (as opposed to
all) choices with welfare. In this paper, I first distinguish between two prominent proxies: one …

If decision-makers (DMs) do not always do what is in their best interest, what do choices
reveal about welfare? This paper shows how observed choices can reveal whether the DM …

We study an OLG model in which the average income of the society acts as a reference
point for the agents' utility on consumption. To model this we use the functional form …

This article incorporates self‐fulfilling mistakes into an otherwise classical decision‐making
framework. A behavioural agent makes a mistake when he fails to internalise all the …

Welfare economics lacks a consensus on how to infer welfare from inconsistent choices. We
argue that the different approaches proposed in the literature rely on a set of values …