Article
The limits of opportunity-only: context dependence and agency in behavioral welfare economics
Journal of Economic Methodology
(2021)
Abstract
What should be the ‘informational base’ of welfare economics if one takes the insights from behavioral economics seriously? Sugden proposes individuals’ sets of opportunities. This paper discusses his opportunity criterion and argues that it largely neglects intricate problems of context-dependence and personal agency. We contrast Sugden’s approach with Buchanan’s understanding of choice, which highlights the importance of agentic capabilities to navigate choice sets, particularly in situations where individuals face subtle interdependences between preference formation processes and their situational or social environment. This paper advocates that the informational base of welfare economics may need to go beyond opportunities if it is to command general assent among individuals who have an interest in being sovereign ‘authors of their own lives’. We argue that economists who take individuals interests seriously should not only consider the size of opportunity sets but also individuals’ sense of personal agency when comparing alternative social states.
Keywords
- agency,
- behavioral economics,
- context-dependence,
- opportunities,
- welfare
Disciplines
Publication Date
October 20, 2021
DOI
https://doi.org/10.1080/1350178X.2021.1988132
Citation Information
Malte F Dold and Mario J Rizzo. "The limits of opportunity-only: context dependence and agency in behavioral welfare economics" Journal of Economic Methodology Vol. 28 (2021) ISSN: 14699427 Available at: http://works.bepress.com/mario_rizzo/68/