Choices3 - 3. Choices, preferences and societys economic...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
3. Choices, preferences and society’s economic welfare 1. Three steps from individuals’ choices to welfare of society:- from individuals’ choices to their preferences; from individuals’ preferences to their ‘welfare’; from individuals’ welfare to society’s welfare. 2. How far do peoples’ choices really ‘reveal’ their preferences? Concept of ‘utility’ in economics; from Benthamite interpretation in terms of pleasures and pains, to modern concept of a ‘utility function’ with its denies any particular psychological interpretation of what it is that individuals’ are maximising, such as satisfaction. 3. Choice may not always be ‘rational’ utility-maximising choice. Axioms of rational choice; evidence of ‘irrational behaviour’; wider concepts of ‘rational choice’; 4 Choices may be rational but still fail to promote welfare. In particular, may be based on imperfect information (often rational). Choice may be counter-preferential insofar as influenced by altruism and ‘commitment.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/25/2011 for the course ECON 1001 taught by Professor Donaldberry during the Spring '09 term at UCL.

Ask a homework question - tutors are online