IDEAS home Printed from https://ideas.repec.org/a/rfa/aefjnl/v7y2020i4p63-77.html
   My bibliography  Save this article

Rational Choice Hypothesis as X-point of Utility Function and Norm Function

Author

Listed:
  • Takeshi Kato
  • Yasuyuki Kudo
  • Junichi Miyakoshi
  • Jun Otsuka
  • Hayato Saigo
  • Kaori Karasawa
  • Hiroyuki Yamaguchi
  • Yasuo Deguchi

Abstract

Towards the realization of a sustainable, fair and inclusive society, we proposed a novel decision-making model that incorporates social norms in a rational choice model from the standpoints of deontology and utilitarianism. We proposed a hypothesis that interprets choice of action as the X-point for individual utility function that increases with actions and social norm function that decreases with actions. This hypothesis is based on humans psychologically balancing the value of utility and norms in selecting actions. Using the hypothesis and approximation, we were able to isolate and infer utility function and norm function from real-world measurement data of actions on environmental conditions and elucidate the interaction between the both functions that led from current status to target actions. As examples of collective data that aggregate decision-making of individuals, we looked at the changes in power usage before and after the Great East Japan Earthquake and the correlation between national GDP and CO2 emission in different countries. The first example showed that the perceived benefits of power (i.e., utility of power usage) was stronger than the power usage restrictions imposed by norms after the earthquake, contrary to our expectation. The second example showed that a reduction of CO2 emission in each country was not related to utility derived from GDP but to norms related to CO2 emission. Going forward, we will apply this new X-point model to actual social practices involving normative problems, and design the approaches for the diagnosis, prognosis and intervention of social systems by IT systems.

Suggested Citation

  • Takeshi Kato & Yasuyuki Kudo & Junichi Miyakoshi & Jun Otsuka & Hayato Saigo & Kaori Karasawa & Hiroyuki Yamaguchi & Yasuo Deguchi, 2020. "Rational Choice Hypothesis as X-point of Utility Function and Norm Function," Applied Economics and Finance, Redfame publishing, vol. 7(4), pages 63-77, July.
  • Handle: RePEc:rfa:aefjnl:v:7:y:2020:i:4:p:63-77
    as

    Download full text from publisher

    File URL: http://redfame.com/journal/index.php/aef/article/download/4890/5050
    Download Restriction: no

    File URL: http://redfame.com/journal/index.php/aef/article/view/4890
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kenneth Arrow, 1970. "Political and Economic Evaluation of Social Effects and Externalities," NBER Chapters, in: The Analysis of Public Output, pages 1-30, National Bureau of Economic Research, Inc.
    2. Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, December.
    3. Julius Margolis, 1970. "The Analysis of Public Output," NBER Books, National Bureau of Economic Research, Inc, number marg70-1, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Takeshi Kato & Yasuyuki Kudo & Junichi Miyakoshi & Jun Otsuka & Hayato Saigo & Kaori Karasawa & Hiroyuki Yamaguchi & Yoshinori Hiroi & Yasuo Deguchi, 2020. "Sustainability and Fairness Simulations Based on Decision-Making Model of Utility Function and Norm Function," Applied Economics and Finance, Redfame publishing, vol. 7(3), pages 96-114, May.
    2. Carlo Borzaga & Silvia Sacchetti, 2015. "Why Social Enterprises Are Asking to Be Multi-stakeholder and Deliberative: An Explanation around the Costs of Exclusion," Euricse Working Papers 1575, Euricse (European Research Institute on Cooperative and Social Enterprises).
    3. Giovanni Compiani & Philip Haile & Marcelo Sant’Anna, 2020. "Common Values, Unobserved Heterogeneity, and Endogenous Entry in US Offshore Oil Lease Auctions," Journal of Political Economy, University of Chicago Press, vol. 128(10), pages 3872-3912.
    4. Papageorgiou, Yorgos Y. & Pines, David, 2000. "Externalities, Indivisibility, Nonreplicability, and Agglomeration," Journal of Urban Economics, Elsevier, vol. 48(3), pages 509-535, November.
    5. Puelz, Robert & Snow, Arthur, 1994. "Evidence on Adverse Selection: Equilibrium Signaling and Cross-Subsidization in the Insurance Market," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 236-257, April.
    6. Pierre Heumann, 1984. "Markthindernisse, Transaktionskosten und property rights: Möglichkeiten für eine rationale Energiepolitik," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 120(III), pages 367-382, September.
    7. Frey Bruno S., 1990. "L’Effet De Transfert De Motivation," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 1(3), pages 1-28, October.
    8. Björn Bartling & Roberto A. Weber & Lan Yao, 2015. "Do Markets Erode Social Responsibility?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 219-266.
    9. repec:ilo:ilowps:271281 is not listed on IDEAS
    10. Rareș Petru MIHALACHE & Dumitru Alexandru BODISLAV, 2019. "Government failure vs. Market failure. The implications of incomplete information," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(619), S), pages 91-104, Summer.
    11. Harris, R. G., 1989. "New theories of trade and the pattern of global specialisation," ILO Working Papers 992712813402676, International Labour Organization.
    12. Makki, Shiva S. & Somwaru, Agapi, 2001. "Asymmetric Information in the Market for Yield and Revenue Insurance," Technical Bulletins 184331, United States Department of Agriculture, Economic Research Service.
    13. Forsythe, G.A., 1975. "An Assessment Of The Role Of Insurance And Structural Measures In Flood Mitigation Planning," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 43(02), pages 1-23, June.
    14. Julia Bauer & Nikolaus Franke & Philipp Tuertscher, 2016. "Intellectual Property Norms in Online Communities: How User-Organized Intellectual Property Regulation Supports Innovation," Information Systems Research, INFORMS, vol. 27(4), pages 724-750, December.
    15. Raymond Yu Wang & Cho Nam Ng, 2015. "Can Centralized Sanctioning Promote Trust in Social Dilemmas? A Two-Level Trust Game with Incomplete Information," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-14, April.
    16. Andolfatto, David & Gomme, Paul, 1996. "Unemployment insurance and labor-market activity in Canada," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 44(1), pages 47-82, June.
    17. Takeshi Kato & Yasuyuki Kudo & Junichi Miyakoshi & Jun Otsuka & Hayato Saigo & Kaori Karasawa & Hiroyuki Yamaguchi & Yoshinori Hiroi & Yasuo Deguchi, 2020. "Sustainability and Fairness Simulations Based on Decision-Making Model of Utility Function and Norm Function," Papers 2002.09037, arXiv.org, revised Apr 2020.
    18. Solis-Navarrete, José Alberto & Bucio-Mendoza, Saray & Paneque-Gálvez, Jaime, 2021. "What is not social innovation," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    19. Csaba, László, 2014. "Átmenettan és közgazdaságtan. Módszertani tanulságok egy részterület műveléséből [Transitology" and economics. Methodological lessons to be drawn from work in a partial territory]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 53-67.
    20. Ye, Silin & Zhou, Jing & Jiang, Yunwen & Liu, Xiaming, 2023. "Managers as the bridge: How cultural friction influences the integration of cross-border mergers and acquisitions," International Business Review, Elsevier, vol. 32(4).
    21. De Geest, Lawrence R. & Kingsley, David C., 2021. "Norm enforcement with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 403-430.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rfa:aefjnl:v:7:y:2020:i:4:p:63-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Redfame publishing (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.