Economics without Preferences
Microeconomics and Policymaking Beyond the Maximizing Individual

A new microeconomics – behavior, markets, and welfare analysis – when agents lack the preferences that economics normally relies on.

Michael Mandler (Author)

9781009340700, Cambridge University Press

Hardback, published 16 January 2025

258 pages
23.5 x 16 x 2.2 cm, 0.525 kg

'Mandler's stimulating, thought-provoking, and enjoyable book uses the transition from good old-fashioned neoclassicism to modern economics as a springboard to his own theory of incomplete preferences. The result is an intriguing series of implications and questions for received theory. Mandler's theoretical developments culminate in proposals to evaluate government policies by their effect on the options available to individuals rather than by classical definitions of efficiency. If that framework had been in place when steel belts became rust belts, the economic and political fallout might have taken a very different and more benign course.' Duncan Foley, Emeritus Leo Model Professor of Economics, New School for Social Research

Economics without Preferences lays out a new microeconomics – a theory of choice behavior, markets, and welfare – for agents who lack the preferences and marginal judgments that economics normally relies on. Agents without preferences defy the rules of the traditional model of rational choice but they can still systematically pursue their interests. The theory that results resolves several puzzles in economics. Status quo bias and other anomalies of behavioral economics shield agents from harm; they are expressions rather than violations of rationality. Parts of economic orthodoxy go out the window. Agents will fail to make the fine-grained trade-offs ingrained in conventional economics, leading market prices to be volatile and cost-benefit analysis to break down. This book provides policy alternatives to fill this void. Governments can spur innovation, the main benefit markets can deliver, while sheltering agents from the upheavals that accompany economic change.

Preface
1. Marginal utility matters
Part I. Trade-Offs and Rationality: 2. Utility as an ordering principle
3. Incomplete preferences
4. The rationality of choice
5. Safety bias
6. The myth of indifference
part II. Economic Analysis and Policy Without Preferences: 7. The volatility of prices
8. Trouble with welfare economics
9. Pareto without preferences
10. Utilitarianism without utility
11. Production and rationality
12. Custom and flexibility
Appendix.

Subject Areas: Microeconomics [KCC]