Endogenous preferences: a primer

Neoclassical economics has traditionally assumed that individual preferences are given, that is, they are not influenced by market and other economic institutions, legal rules, policies etc. [Here preferences are taken to mean “reasons for behavior, that is, attributes of individuals that (along with their beliefs and capacities) account for the actions they take in a given situation” (Bowles 1998, 78‘)]. This assumption, referred to as the axiom of exogenous preferences, is being increasingly criticized. Numerous interesting articles have been published on so called endogenous preferences, that is, preferences that are affected by different policies and institutional arrangements. Here is an excellent one to start with: Bowles S. 1998 Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions, Journal of Economic Literature 36(1), 75-111. By the way, in the same issue are published some other excellent review articles on themes such as: economics and psychology, economics and emotions and institutional economics.

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