Published online by Cambridge University Press: 27 March 2026
This chapter surveys behavioural models across decisions and games that rationalise deviations from money maximisation and shows that, despite variety, they share a single foundation: economic consequentialism. It reviews bounded-rationality accounts (satisficing/aspiration dynamics, quantal response equilibria) and departures from expected utility (prospect theory) and from exponential discounting in intertemporal decisions (hyperbolic discounting), then introduces social-preference formulations (altruism à la Ledyard/Levine, inequity aversion a la Fehr–Schmidt and Bolton–Ockenfels, and models by Andreoni–Miller and Charness–Rabin). Finally, the chapter formalises the ‘economic representation’ of action profiles and defines economic consequentialism – utility as a function only of payoffs, probabilities, and timing for all parties – while noting limits that motivate alternative approaches.
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