Jun Hyun Ji
February 2025
My wife is upset about the undone dishes.
I ask, “Why didn’t you just tell me to do it?”
She says, “Because you should want to do it.”
preference over preferences. In addition to having a preference over outcomes, the agent likes a preference relation if she prefers preference relation if she prefers behaving as if she holds that preference:
preferring \(x\) to \(y\)is preferred to
preferring \(y\) to \(x\)if she values the act of willingly giving up \(y\) for \(x\) more than giving up \(x\) for \(y\). I propose axioms that yield a unique representation identifying this second-order preference composed of (i) the individual’s ideal preference over outcomes, and (ii) a choice rule that selects a reference option against which the act of choosing from each menu is assessed. This choice rule captures the individual’s paternalistic attitude toward willful choices (manifested as guilt, pride, the value of freedom, or the fear of the act of making mistakes) which is inherently menu-dependent. Consequently, the best act of choosing may only be possible when the best outcome is removed from the menu. Without relying on menu choices or econometric models of welfare measures, I provide a revealed-preference approach to testing my model even when the agent cares about outcomes.