Endogenizing Sen's capabilities: An adaptive dynamic analysis

The literature on capabilities usually considers characteristic and the utilization functions as exogenously given. However, Sen's capacity approach calls for reconsideration within a dynamic context, as Sen himself seems to suggest [Sen, A., 1997a. On Economic Inequality, Clarendon Press, Oxford. Sen, A., 1997b. Editorial: human capital and human capability. World Development 25, 1959–1961].In this paper, we develop a general model with utilization functions determined endogenously through an adaptive learning process. We analyse the dynamics of the sequence of states generated by the Adaptive Process, the problem of existence of an equilibrium and by means of numerical examples we also show that an individual may be locked in a trajectory of utilization of characteristics which leads him/her to a sub-optimal configuration.