A new definition of and role for preferences in positive economics. Issue 3 (3rd July 2017)

• Record Type: Journal Article
• Authors: Engelen, Bart
• Is Part Of: Journal of economic methodology. Volume 24:Issue 3(2017)
• Page Start: 254
• Page End: 273
• Publication Date: 2017-07-03
• Subjects: homo economicus -- preference -- total comparative evaluation -- counterpreferential choice -- Hausman -- Sen; Economics -- Methodology -- Periodicals; 330.072
• DOI: 10.1080/1350178X.2017.1286026
• Languages: English
• ISSNs: 1350-178X

Abstract

Abstract : Positive economic models aim to provide truthful explanations of significant (aspects of) economic phenomena. While the notion of 'preferences' figures prominently in micro-economic models, it suffers from a remarkable lack of conceptual clarity and rigor. After distinguishing narrow homo economicus models (self-interest maximization) from broader ones (preference satisfaction) and rehearsing the criticisms both have met, I go into the most promising attempt to date at addressing them, developed by Hausman. However, his definition of preferences as 'total comparative evaluations', I argue, plays into the general disregard that economists have for human psychology. My alternative definition of preferences as 'overall comparative evaluations' – and hence as one of the many factors that influence people's behavior – allows for more adequate causal explanations of people's dutiful, committed, and norm-guided actions. Against Hausman but in agreement with Sen, it also allows for (motivated) counterpreferential choice.