Robert Sugden: "Reconciling normative and behavioural economics without assuming an inner rational agent"

Abstract
Neoclassical economics assumes that individuals have stable and context-independent preferences, and uses preference-satisfaction as a normative criterion.  By calling this assumption into question, behavioural findings cause fundamental problems for normative economics.  A common response to these problems is to treat deviations from conventional rational-choice theory as mistakes, and to try to reconstruct the preferences that individuals would have acted on, had they reasoned correctly.  I argue that his approach implicitly uses a dualistic model of the human being, in which an inner rational agent is trapped in an outer psychological shell.  This model is psychologically and philosophically problematic.  I propose an alternative approach in which the normative criterion is the existence of opportunities for voluntary transactions between individuals.