Welfare economics and bounded rationality : The case for model-based approaches
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In this paper we examine the problems facing a policy maker who observes inconsistent choices made by agents who are boundedly rational. We contrast a model-less and a model-based approach to welfare economics. We make the case for the model-based approach and examine its advantages as well as some problematic issues associated with it.
Manzini , P & Mariotti , M 2014 , ' Welfare economics and bounded rationality : The case for model-based approaches ' Journal of Economic Methodology , vol 21 , no. 4 , pp. 343-360 . DOI: 10.1080/1350178X.2014.965909
Journal of Economic Methodology
© 2014 Taylor & Francis This is an Accepted Manuscript of an article published in Journal of Economic Methodology on 8 October 2014, available online: http://www.tandfonline.com/10.1080/1350178X.2014.965909
Mariotti gratefully acknowledges financial support through a Leverhulme Fellowship. Both authors acknowledge financial support from the ESRC through grant RES-000-22-3474.
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