I prepared this lecture for a first-year PhD class in Microeconomics. I've included it because it contains some material that provides useful background for my lectures on Behavioral Welfare Economics. (There is also some overlap with the first of the those lectures.)
Theories from Behavioral Economics are playing increasingly important roles in economic policy analysis and policy making, where evaluation (welfare analysis) is essential. Conceptual concerns arise because standard welfare economics defers to choice. Does this deference still make sense if choices exhibit inconsistencies or reflect cognitive biases? Behavioral Welfare Economics is critical because it provides foundations for drawing normative conclusions in these settings. This is the first of two (roughly) one-hour lectures on Behavioral Welfare Economics.
Theories from Behavioral Economics are playing increasingly important roles in economic policy analysis and policy making, where evaluation (welfare analysis) is essential. Conceptual concerns arise because standard welfare economics defers to choice. Does this deference still make sense if choices exhibit inconsistencies or reflect cognitive biases? Behavioral Welfare Economics is critical because it provides foundations for drawing normative conclusions in these settings. This is the second of two (roughly) one-hour lectures on Behavioral Welfare Economics.