Abstract

Human beings under some conditions tend to systematically overestimate their possibilities, under others to underestimate what is possible for them. This behaviour can be explained by differentiating between an ipsative possibility set (which includes what individuals consider relevant for themselves) and on objective one. These two possibility sets do not necessarily coincide. The difference may firstly be due to psychologicol processes as well as factors such as tradition and ideology. The difference may secondly be strategically designed by the individuals themselves knowing that they otherwise reach less utility. The approach stresses that it is essential to determine the possibility sets within which individuals rationally decide between alternatives.