A Review of Economic Dual-Self Modelling

Abstract

Dual-self decision theory generalises the canonical economic model by admitting multiple, possibly conflicting, decision criteria. A typical dual-self model will formalise psychological or neuroscientific descriptions of the human decision-making process into an economic model of that process, and apply that model to provide an unified explanation for several behavioural anomalies. In this paper, we compare the foundations of Neoclassical and dual-self decision theories, we develop a generalised decision framework that nests both decision theories, and we use that framework to provide a comprehensive taxonomy of the economic dual-self literature. We also discuss the relative merits of each existing dual-self approach, and suggest avenues for future research.