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Exploring the Behavior of Economic Agents: the role of relative preferences

Author

Listed:
  • Joseph Cavanaugh

    (Wright State University - LC)

  • Michelle Alexopoulos

    (University of Toronto)

Abstract

Standard economic theory assumes individuals choose actions that optimize their expected utility. In this paper we investigate how the existence of players with non-standard preferences may influence economic agents' behavior in some of the most frequently studied non-cooperative games. We find that allowing for the existence of agents with relative preferences can help explain observed economic actions which, at times, appear counter-intuitive.

Suggested Citation

  • Joseph Cavanaugh & Michelle Alexopoulos, 2006. "Exploring the Behavior of Economic Agents: the role of relative preferences," Economics Bulletin, AccessEcon, vol. 12(2), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-06l20001
    as

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    File URL: http://www.accessecon.com/pubs/EB/2006/Volume12/EB-06L20001A.pdf
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    References listed on IDEAS

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    Cited by:

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    3. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    4. Ornella Tarola & Skerdilajda Zanaj, 2019. "Social division in the market: conspicuous consumption with nationalist feelings," DEM Discussion Paper Series 19-12, Department of Economics at the University of Luxembourg.
    5. Ceccantoni, Giulia & Tarola, Ornella & Zanaj, Skerdilajda, 2018. "Green Consumption and Relative Preferences in a Vertically Differentiated International Oligopoly," Ecological Economics, Elsevier, vol. 149(C), pages 129-139.
    6. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    7. A. Mantovani & O. Tarola & C. Vergari, 2014. "On the effect of social norms to reduce pollution," Working Papers wp950, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Luca Lambertini & Andrea Mantovani & Cecilia Vergari, 2021. "Green monopoly and downward leapfrogging," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(1), pages 93-103, March.

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    More about this item

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • D2 - Microeconomics - - Production and Organizations

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