Partially Altruistic Consumer Choice in Presence of Consensus Bias

There are instances when a consumer’s overall utility depends on her own utility as well as on the utility of another individual (e.g., in case of shared consumption with another individual, or in case of buying a gift for someone). In such instances, in order to make a choice that maximizes her overall utility, the chooser needs to form a belief about the other’s preferences. In presence of consensus bias the chooser believes that her...