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GARP for Kids: On the Development of Rational Choice Behavior



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GARPfor Kids On the Development of RationalChoice Behavior By WILLIAM T HARBAUGH KATE KRAUSE AND TIMOTHY Do childrenchoose rationally This question matters for several reasons If children are incapable of choosing rationally then there is little point in attemptingto use standardeconomic models to describe their behavior For example models of family bargainingbehavior assume that family memberseach act rationally to maximize a utility function On a more applied level families and society engage in a wide variety of paternalistic policies towards children These policies use various mechanisms to encouragecertainchoices and discourage or prohibit others The issue of rational choice by children is importantboth for justifying this paternalismand for determiningthe effectiveness of incentive based mechanisms for enforcing it It is also difficult to justify using data on children s choices to draw inferences about their preferences or to accurately predict their future behavior if the choices are not rational In addition to these reasons which apply to children as children there is the fact that children grow into adults An understandingof the development of rational choice behavior over the lifespan may ultimately tell us something about rationalchoice by adults Is the ability to choose rationally something that is universally present at very young ages or does it only appear at adulthood or even later Is rational choice the rule or the exception among children If rationalchoice is not the rule then do Harbaugh Department of Economics University of Oregon Eugene Oregon 97403 and National Bureau of Economic Research e mail bill harbaugh org Krause Department of Economics 1915 Roma NE Economics Building University of New Mexico Albuquerque NM 87131 e mail kkrause unm edu Berry Departmentof Economics University of Oregon Eugene Oregon 97403 e mail trb gladstone uoregon edu We thank Anne van den Nouweland Jim Andreoni an anonymous referee and participants in the 1999 NBER



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