On the identification of changing tastes

Max Mihm, Kemal Ozbek

    Research output: Contribution to journalArticle

    Abstract

    In a dynamic choice environment, an agent's tastes may change over time (e.g., due to present bias, habit formation, or reference dependence). These changes are often systematic with important welfare and policy implications. In this paper, we propose a framework to identify an agent's anticipation about how her preferences change over time and provide a heuristic measure that can inform the design of economic policies. In particular, our method resolves identification issues arising in the previous literature by using the intuitive idea that, while tastes can change, rankings are often monotone with respect to a suitable dominance relation.

    Original languageEnglish (US)
    Pages (from-to)203-216
    Number of pages14
    JournalGames and Economic Behavior
    Volume116
    DOIs
    StatePublished - Jul 1 2019

    Fingerprint

    Anticipation
    Welfare implications
    Habit formation
    Policy implications
    Economic policy
    Preference change
    Ranking
    Dynamic choice
    Reference dependence
    Present bias
    Heuristics

    Keywords

    • Changing tastes
    • Consistent planning
    • Dominance relation
    • Dynamic choice

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

    Cite this

    On the identification of changing tastes. / Mihm, Max; Ozbek, Kemal.

    In: Games and Economic Behavior, Vol. 116, 01.07.2019, p. 203-216.

    Research output: Contribution to journalArticle

    Mihm, Max ; Ozbek, Kemal. / On the identification of changing tastes. In: Games and Economic Behavior. 2019 ; Vol. 116. pp. 203-216.
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