Psychology, Rational Evaluation, and Preference Formation

Part III of this book is concerned with empirical investigations of people’s preferences and of how people construct and modify those preferences, as well as with normative questions about how people ought to construct and modify their preferences. Chapter 9 discusses empirical investigations of choice and preference carried out by psychologists and behavioral economists, which make clear how unsatisfactory it is in general to suppose that preferences are just “given” and not subject to rational evaluation. It also draws a contrast between the standard model of choice economists employ and the way psychologists theorize about action. Examining the role of context in the construction of preference leads naturally to the issues Chapter 10 explores concerning theories of preference formation and modification. Chapter 11 concludes this book.