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Copyright

Michael Richter; Ariel Rubinstein;

Published On

2024-11-13

Page Range

pp. 93–112

Language

  • English

Print Length

20 pages

4. Biased Preferences Equilibrium

Chapter of: No Prices No Games!: Four Economic Models(pp. 93–112)
This chapter follows Rubinstein and Wolinsky (2022) who propose a biased preferences equilibrium solution concept in which agents' preference relations are systematically biased. The bias does not affect the agents' opportunity sets, but rather their preferences, which are systematically biased in such a way that the profile of agents' biased optimal choices is feasible.
We envision biases as a mechanism for bringing harmony to a multi-agent economy. These biases, like prices, apply uniformly to all agents. Every agent's final preferences are determined by his initial preferences and the commonly shared bias.
We apply the concept to three types of economies: the give-and-take, market economies with fixed prices and housing-type economies.

Contributors

Michael Richter

(author)
https://orcid.org/0000-0002-5220-9995

Michael Richter is a professor of Economics at Baruch College, City University of New York and Royal Holloway, University of London. He is a graduate of the University of Chicago (BS, Math) and New York University (PhD, Economics). His research interests are in microeconomic theory, particularly decision theory, general equilibrium, and search. He lives in New York, with his wife and two kids. For other works, the author’s website is: http://www.mrichter.co/

Ariel Rubinstein

(author)
Emeritus in School of Economics at Tel Aviv University
Professor of Economics at New York University
https://orcid.org/0000-0003-1574-2659
https://arielrubinstein.org/

Ariel Rubinstein was born in Jerusalem and received his PhD from the Hebrew University in Jerusalem in 1979. Has been a Professor at the Hebrew University and at Princeton and currently is a Professor (Emeritus) at Tel Aviv University and a Professor of Economics at New York University. He has served as the President of the Econometric Society (2004). He is a foreign honorary member of the American Academy of Arts and Sciences and the American Economic Association, an Elected Fellow of the Israeli Academy of Sciences and Elected Corresponding Fellow of the British Academy. His 7 books reflect his research interests: Bargaining and Markets (with M. Osborne) (1990), A Course in Game Theory (with M. Osborne) (1994), Modeling Bounded Rationality (1998), Economics and Language (2000), Lecture Notes in Microeconomics (2005) and Models of Microeconomic Theory (with M.Osborne) (2020). His book Economic Fables (2012) presents his general views about Economic Theory. He created and manages the Atlas of Cafes (where one can think). All his books and articles are accessed through his homepage https://arielrubinstein.tau.ac.il.