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The Origin of Preferences, Economic Decision Theory, and Yaari

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  • Marek Jenöffy-Lochau

    (Büro am Carlsplatz)

Abstract

Preferences" is a key concept in economic theory. However, economics has yet not achieved to explain the origin of preferences. Preferences originating means endogenous preferences. The Signal-Preference Model (SPM) provides a new algorithm for modeling endogenous preferences using the empirical result of communications research. This paper examines how the SPM performs in the framework of economic decision theory. The results of the SPM are compared with Expected Utility Theory, Bayesian learning and Prospect Theory. Surprisingly, the performance of the SPM in this field indicates that this holistic preference model seamlessly fits into microeconomics and decision theory.

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  • Marek Jenöffy-Lochau, 2014. "The Origin of Preferences, Economic Decision Theory, and Yaari," Post-Print hal-04139624, HAL.
    • Handle: RePEc:hal:journl:hal-04139624
    Note: View the original document on HAL open archive server: https://hal.science/hal-04139624
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    References listed on IDEAS

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    1. W. Viscusi & Owen Phillips & Stephan Kroll, 2011. "Risky investment decisions: How are individuals influenced by their groups?," Journal of Risk and Uncertainty, Springer, vol. 43(2), pages 81-106, October.
    2. Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
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