Tyler DesRoches (Arizona State University) - There is no consensus on the normative foundations of behavioral welfare economics. Behavioral economists typically reject the traditional criterion of welfare – the satisfaction of every “raw” preference – because the empirical findings of their sub-discipline has demonstrated that, the framing effect, false beliefs, the endowment effect, etc., cause agents to make systematic mistakes when confronted with choices. Instead, most behavioral economists champion the satisfaction of “purified preferences” as their criterion of choice. Purified preferences are the preferences that the agent would have had if her reasoning had not been subject to various psychological distortions. However, purified preferences have been recently criticized on various (methodological, epistemological, and normative) grounds and while alternative have been proposed, there is still no widespread agreement on the criterion of welfare for behavioral welfare economics (Sugden 2018; Sugden et al. 2016; Hausman 2016; Sugden 2004). This paper develops an alternative foundation for behavioral welfare economics: values-based preferences. Similar to Dan Hausman’s (2012) view of preferences, the satisfaction of values-based preferences has an evidential relation (not a constitutive relation) to agent welfare or well-being. However, values-based preferences are distinctive because they are explicitly grounded in the agent’s own value commitments, which are normative, affective, and stable for the agent who possesses them (Tiberius 2008). Critically, the objects of values-based preferences are not individual choices, but patterns of consumption over a specified period of time. To have a value-based preference is to have a preference for a pattern of consumption that accords with one’s own pre-determined plan, which is ultimately grounded in one’s value commitments (Bratman 1987). In short, the agent’s value commitments pick out patterns of consumption that are compatible with those commitments. To have a plan and to act on it is to adopt a particular kind of strategy for consuming goods and services: agents who choose according to their plans are resolute choosers (McClennan 1990; Gauthier 1997). As for judgements over the correctness of any single instance of consumption, this determination cannot be made without first referring to the pattern of consumption. If, over time, the agent’s choices form a pattern that is incompatible with their own value commitments, then we can conclude that the agent has either abandoned their value commitment or made an error by their own subjective standards. It will be argued that there is a strong case to be made for values-based preferences to serve as the normative foundation of behavioral welfare economics.
