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Joseph Cavanaugh and Michelle Alexopoulos
''Exploring the Behavior of Economic Agents: the role of relative preferences''
( 2006, Vol. 12 No.2 )
Standard economic theory assumes individuals choose actions that optimize their expected utility. In this paper we investigate how the existence of players with non-standard preferences may influence economic agents' behavior in some of the most frequently studied non-cooperative games. We find that allowing for the existence of agents with relative preferences can help explain observed economic actions which, at times, appear counter-intuitive.
JEL: L2 - Firm Objectives, Organization, and Behavior: General
D2 - Production and Organizations: General
Manuscript Received : Feb 12 2006 Manuscript Accepted : Feb 21 2006

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