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Nosy Preferences, Benevolence, and Efficiency
Author(s) -
Dave Chetan,
Dodds Stefan
Publication year - 2012
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.4284/0038-4038-78.3.878
Subject(s) - impossibility , externality , consumption (sociology) , economics , microeconomics , preference , social preferences , intervention (counseling) , revealed preference , dynamic inconsistency , mathematical economics , positive economics , public economics , psychology , sociology , social science , psychiatry , political science , law
We explore the implications of “nosy” preferences—when individuals have rankings over the specific actions of others—using recent theoretical results in the behavioral economics literature. Our model jointly captures preference interdependence over utilities (benevolence) and actions (nosiness). We apply the model to two well‐known environments. The first is a classic social choice problem; the second is a model of relative consumption concerns. For the former we characterize the existence of the impossibility once the social choice problem has been modeled as a behavioral game. For the latter we characterize when the negative externality arising from relative consumption concerns can be overcome without a policy intervention.