Endogenous Preferences and the Study of Institutions

Abstract

The assumption that individual preferences, or attitudes, are fixed and exogenously determined is central to many studies of political and economic institutions, such as markets and elections. We present a Bayesian model of adaptive preferences and empirical evidence consistent with that model to argue that preferences are not always exogenous and fixed. The changing relationships between partisanship and preferences on civil rights issues between 1956 and 1964 and on the Vietnam War issue between 1968 and 1972 coincide with significant changes in the major parties' positions on these issues, suggesting that preferences are endogenous to the electoral process. We conclude with a discussion of the positive and normative implications of endogenous preferences.