Revealed preferences may not reflect true welfare, impacting policy decisions.
The article explores how our feelings and beliefs influence our decisions, and how our actions can in turn change our feelings and beliefs. It shows that in simple situations, our decisions are affected by our preferences, but in more complex situations, our decisions may not always reflect our true preferences. The researchers found that in smooth situations, standard and behavioral decisions can be told apart, but in general, our actions may not accurately show what we truly want. This means that just looking at what we do may not always give an accurate picture of what makes us happy. The study also suggests new ways to think about policies and how to analyze what makes people better off.