Publication: Striving for Balance in Economics: Towards a Theory of the Social Determination of Behavior
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Date
2016-01
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2016-01
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This paper is an attempt to broaden economic discourse by importing insights into human behavior not just from psychology, but also from sociology and anthropology. Whereas the concept of the decision-maker in standard economics is the rational actor and, in early work in behavioral economics, the quasi-rational actor influenced by the context of the moment of decision-making, in some recent work in behavioral economics the decision-maker could be called the enculturated actor. This actor's preferences, perception, and cognition are subject to two deep social influences: (a) the social contexts to which he has become exposed and, especially, accustomed; and (b) the cultural mental modelsāincluding categories, identities, narratives, and worldviewsāthat he uses to process information. The paper traces how these factors shape individual behavior through the endogenous determination of preferences and the lenses through which individuals see the worldātheir perception and interpretation of situations. The paper offers a tentative taxonomy of the social determinants of behavior and describes the results of controlled and natural experiments that only a broader view of these determinants can plausibly explain. The perspective suggests more realistic models of human behavior for explaining outcomes and designing policies.
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āHoff, Karla; Stiglitz, Joseph E.. 2016. Striving for Balance in Economics: Towards a Theory of the Social Determination of Behavior. Policy Research Working Paper;No. 7537. Ā© World Bank. http://hdl.handle.net/10986/23704 License: CC BY 3.0 IGO.ā
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