Title: Welfare analysis when choice is status-quo biased
Abstract: We provide a revealed preference analysis in models where choice may be status-quo biased. We study the relevant case in which data is limited and make reasonable assumptions on how status-quo may structure behavior. We show how to elicit true, welfare-relevant, preferences of a biased decision maker and argue that imposing more structure may significantly improve welfare analysis. We prove that a combination of two variants of the well-known strong-axiom of revealed preference characterizes status-quo biased behavior.
Publication Year: 2022
Publication Date: 2022-06-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 1
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