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(Wp 2021-02) Attribute Substitution, Counterfactual Thinking, And Heterodox Economics, John B. Davis, Theodore Koutsobinas
(Wp 2021-02) Attribute Substitution, Counterfactual Thinking, And Heterodox Economics, John B. Davis, Theodore Koutsobinas
Economics Working Papers
This paper examines how attribute substitution (AS), central to the psychology of choice and behavioral economic reasoning, can be understood when combined with counterfactual thinking (CFT), often called ‘what if’ or ‘if only’ thinking, and how their combination creates important opportunities for the seeing heterodox economics as a single research program alternative to mainstream economics. The first section of the paper discusses AS, CFT, and what a AS-CFT behavioral framework involves, and then emphasizes how this framework departs from fundamental assumptions mainstream rational choice theory employs. The second section reviews the foundations of behavioral thinking regarding AS, describes what it …