Neoclassical economics assumes that individuals have stable and context-independent preferences, and uses preference satisfaction as a normative criterion. By calling this assumption into question, behavioural findings cause fundamental problems for normative economics. A common response to these problems is to treat deviations from conventional rational choice theory as mistakes, and to try to reconstruct the preferences that individuals would have acted on, had they reasoned correctly. We argue that this preference purification approach implicitly uses a dualistic model of the human (...) being, in which an inner rational agent is trapped in an outer psychological shell. This model is psychologically and philosophically problematic. (shrink)

This is an interview by the Erasmus Journal for Philosophy and Economics with Robert Sugden. The interview covers the intellectual trajectory of Sugden, from his early critique of Amartya Sen’s liberalism, to his interactions with James Buchanan and his contributions to behavioural economics. A major theme in the interview is Sugden’s development of a rival program of normative economics based on modern behavioural economics. The interview also discusses Sugden’s recent book The Community of Advantage which synthesizes many of the themes (...) he worked on. (shrink)

There is a long tradition in economics of evaluating social arrangements by the extent to which individuals' preferences are satisfied. This is the tradition of welfarism, which has developed from nineteenth-century utilitarianism. Increasingly, however, the presumption that preference-satisfaction is the appropriate standard for evaluating social arrangements is being challenged by an alternative view: that we should focus on the set of opportunities open to each individual.

Abstract:Robert Sugden has suggested a normative standard of freedom as ‘opportunity’ that is supposed to help realign normative economics – with its traditional rational choice orientation – with behavioural economics. While allowing preferences to be incoherent, he wants to maintain the anti-paternalist stance of orthodox welfare economics. His standard, though, presupposes that people respond to uncertainty about their own future preferences by dismissing any kind of self-constraint. We argue that the approach lacks psychological substance: Sugden's normative benchmark – the ‘responsible (...) person’ – can hardly serve as a convincing role model in a contractarian setting. An alternative concept is introduced, and some implications are briefly discussed. (shrink)