Does the Market Create Preferred Preferences

Bibliographic Data

ID9256924
AuthorsD Lloyd George (0000-0002-5726-0255, LASALLE College of the Arts, corresponding author), David George (0000-0002-4337-389X, LaSalle University)
Year1993
Volume51
Issue3
Pages323-346
Publication date1993-10-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueReview of Social Economy (JOURNAL)
Journal identifiersISSN: 0034-6764 • E-ISSN: 1470-1162
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/758537261
OpenAlexW2143447705
LanguageEN
Citations received8
References cited27

I. Introduction Since its introduction into the Economics literature over a decade ago, the notion of an agent's has held out considerable hope of providing an elegant reconstruction of rational choice. But largely neglected to this point has been the question of whether a strong case for unfettered markets is affected by the recognition of metapreferences. Simply stated, how adept is the market at instilling in agents the preferences that they would prefer to have?(1) In attempting to answer this question, I will not be rejecting the utilitarianism that lies at the heart of neoclassical welfare economics but instead will be making my case in the language of this tradition. My reason for this approach is partly strategic -- the neoclassical vision of what it is to be a free agent is a vision shared by most segments of the culture. To radically reformulate the model of the choosing agent carries with it the risk of marginalization. Arguing within the prevailing language lessens this risk. The claim that an agent does what he or she prefers to do is not an idiosyncratic assumption of the neoclassical model but is rather a cherished assumption of modern society generally. To grant the assumption and still show that the market unsatisfactorily influences consumer preferences can result in the critique being all the more powerful. It might be argued that since the central issue of concern is how a change in an agent's preference ranking affects his or her welfare, there is necessarily a dramatic departure from the neoclassical model, since a fundamental principle of this model is that there is no way to normatively assess a preference change.(2) If this neutrality about preference change were unconditional in nature, such a conclusion would be correct. The insistence on evaluating changing preferences would be a sufficient condition for ending dialogue with a neoclassicist. But if the neoclassical neutrality toward changing preferences is premised on the assumption that there is no basis for comparing and states of the agent undergoing the preference change, such a conclusion would be false. For a vital feature of the metapreference construct is precisely that it provides a means for comparing the agent's welfare before and after such a change. The next section will be devoted to laying some conceptual groundwork. On the way to accomplishing this end, two common errors in defining metapreferences will receive attention.(3) I will argue that these errors have had the likely effect of delaying appreciation of the significance that metapreferences hold for a normative assessment of the market. (The reader already thoroughly familiar with the logic of metapreferences might wish to skip over this section.) In section III is presented the argument that the market fails in the production of preferences. Also presented in this section are some thoughts on the conditions necessary for the emergence of solutions to the problems discussed. II. Some Common Misunderstandings Since the major argument of the paper will be that there is market failure in preference production, it will help in starting out to consider whether there are any overt manifestations of this. A mismatch between preference and metapreference would be one cause for expressions of discontent over one's choice situation, but only one of several causes. An initial appreciation of the metapreference notion sometimes leads to an incorrect attribution of internal discontent to preference-metapreference discord. It is worth very briefly considering two other situations that would be expected to raise expressions of discontent with one's choice. (1) Some regret is understandable as displeasure over the simple fact of scarcity. Looked at slightly differently, one may be dissatisfied with the constraint he or she faces. In choosing X, an agent may feel some regret that he or she is thereby passing up the opportunity to have Y

Economics · Epistemology · Invisible hand · Market economy · Microeconomics · Neoclassical economics · Point (geometry) · Positive economics · Preference · Ranking (information retrieval) · Utilitarianism · Welfare · Decision-Making and Behavioral Economics · Economic theories and models · Economic Theory and Institutions · Philosophy

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