@techreport{NBERw14622,
 title = "Behavioral Welfare Economics",
 author = "B. Douglas Bernheim",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "14622",
 year = "2008",
 month = "December",
 URL = "http://www.nber.org/papers/w14622",
 abstract = {This paper discusses several competing proposals for general normative frameworks that would encompass non-standard models of choice.  Most existing proposals equate welfare with well-being.  Some assume that well-being flows from the achievement of well-defined objectives, and that those objectives also guide choices; the trick is to formulate a framework in which less-than-completely coherent choice patterns reveal the unobserved objectives.  Others are predicated on the contention that well-being, and hence welfare, is directly measurable.  Both of those approaches encounter serious conceptual difficulties.  An alternative approach, developed by Bernheim and Rangel [2009], defines welfare directly in terms of choice.  It entails a generalized welfare criterion that respects choice directly, without requiring any rationalization involving potentially unverifiable assumptions concerning underlying objectives and their relationships to choice.  Because useful behavioral theories generally envision a substantial degree of underlying coherence in behavior, that criterion leads to a rich and tractable normative framework.},
}