The market for preferences

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.

Economics and psychology in the twenty-first century

This paper begins by exploring four different possible forms of relationship between economics and psychology, which have different connotations in terms of the relative status of the two disciplines. It then focuses on the future for one of these, psychological economics. After setting out the hardcore axioms and positive and negative heuristics of a research programme in psychological economics, it explores institutional and psychological barriers to the success of such a research programme in the context of both research and teaching.

Stability and cycles in a cobweb model with heterogeneous expectations

We investigate the dynamics of a cobweb model with heterogeneous beliefs, generalizing the example of Brock and Hommes (1997). We examine situations where the agents form expectations by using either rational expectations, or a type of adaptive expectations with limited memory defined from the last two prices. We specify conditions that generate cycles. These conditions depend on a set of factors that includes the intensity of switching between beliefs and the adaption parameter. We show that both Flip bifurcation and Neimark-Sacker bifurcation can occur as primary bifurcation when the steady state is unstable.

Existence of solutions for p(x)-Laplacian problems on a bounded domain

In this paper we study the following p(x)-Laplacian problem: -div(a(x)&VERBAR;&DEL; u&VERBAR;(p(x)-2)&DEL; u)+b(x)&VERBAR; u&VERBAR;(p(x)-2)u = f(x, u), x ε &UOmega;, u = 0, on &PARTIAL; &UOmega;, where 1< p(1) &LE; p(x) &LE; p(2) < n, &UOmega; &SUB; R-n is a bounded domain and applying the mountain pass theorem we obtain the existence of solutions in W-0(1,p(x)) for the p(x)-Laplacian problems in the superlinear and sublinear cases. © 2004 Elsevier Inc. All rights reserved.

Cost-benefit analyses for your group and yourself: The rationality of decision-making in conflict

Two studies in the context of English-French relations in Québec suggest that individuals who strongly identify with a group derive the individual-level costs and benefits that drive expectancy-value processes (rational decision-making) from group-level costs and benefits. In Study 1, high identifiers linked group- and individual-level outcomes of conflict choices whereas low identifiers did not. Group-level expectancy-value processes, in Study 2, mediated the relationship between social identity and perceptions that collective action benefits the individual actor and between social identity and intentions to act. These findings suggest the rational underpinnings of identity-driven political behavior, a relationship sometimes obscured in intergroup theory that focuses on cognitive processes of self-stereotyping. But the results also challenge the view that individuals' cost-benefit analyses are independent of identity processes. The findings suggest the importance of modeling the relationship of group and individual levels of expectancy-value processes as both hierarchical and contingent on social identity processes

Grumbling, voting, demonstrating, and rioting: ''Rationality'' and decision-making in intergroup conflict

An individual faced with intergroup conflict chooses A from a vast array of possible actions, ranging from grumbling among ingroup friends to voting and demonstrating to rioting and revolution. The present paper conceptualises these intergroup choices as rationally shaped by perceptions of the benefits and costs associated with the action (expectancy-value processes). However, in presenting a model of agentic normative influence, it is argued that in intergroup contexts group-level costs and benefits play a critical role in individuals' decision-making. In the context of English-French conflict in Quebec, in Canada, four studies provide evidence that group-level costs and benef influence individuals' decision-making in intergro conflict; that the individual level of analysis need mediate the group level of analysis; that group-level co and benefits mediate the relationship between soc identity and intentions to engage in collective action; a that perceptions of outgroup and ingroup norms for inte group behaviours are relatively invariant and predictal related to perceptions of the group- and individual-le, benefits and costs associated with individualistic vers collective actions. By modelling the relationship betwe group norms and group-level costs and benefits, soc psychologists may begin to address the processes th underlie identity-behaviour relationships in collecti action and intergroup conflict.