The Market for Preferences

Earl, Peter E. & Potts, Jason D. (2004) The Market for Preferences. Cambridge Journal of Economics, 28(4), pp. 619-633.

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Learning processes are widely held to be the mechanism by which boundedly rational agents adapt to environmental changes. We argue that this same outcome might also be achieved by a different mechanism, namely specialisation and the division of knowledge, which we here extend to the consumer side of the economy. We distinguish between high-level preferences and low-level preferences as nested systems of rules used to solve particular choice problems. We argue that agents, while sovereign in high-level preferences, may often find it expedient to acquire, in a pseudo-market, the low-level preferences in order to make good choices when purchasing complex commodities about which they have little or no experience. A market for preferences arises when environmental complexity overwhelms learning possibilities and leads agents to make use of other people's specialised knowledge and decision rules.

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34 citations in Web of Science®

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ID Code: 10239
Item Type: Journal Article
Refereed: Yes
Additional Information: For more information, please refer to the journal's website (see hypertext link) or contact the author.
DOI: 10.1093/cje/28.4.619
ISSN: 0309-166X
Divisions: Current > QUT Faculties and Divisions > Creative Industries Faculty
Copyright Owner: Copyright 2004 Oxford University Press
Deposited On: 19 Oct 2007 00:00
Last Modified: 29 Feb 2012 13:30

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