Decisions with Endogenous Frames

Abstract

This paper contrasts the normative implications of a model of decisionmaking with endogenous frames to those of choice theoretic models of Bernheim and Rangel (2007, 2009) and Rubinstein and Salant (2008) in which observed choices are determined by exogenous frames or ancillary conditions. We argue that frames, though exogenous to the individual at the point when choices are made, matter for welfare purposes.Decisions, choice, frames, standard, behavioral, welfare