Human agency and free will: choice and determinism in economics
Purpose – The assumption of free will in contemporary economics is an important starting point for socio-economic analysis in contrast to methodologies which assume that human action is pre-determined by forces beyond individual control. However, contemporary economic theory is devoid of choice in critical domains with important implication for economic analyses and public policy, given the ancillary assumption of the importance of market forces in determining choice behavior. The purpose of this paper is to argue that freedom of choice exists given traditional constraints such as relative prices and income. Design/methodology/approach – This is a theoretical paper examining the assumption of free will in choice behaviour in economic theory. It makes reference to literature in economics and philosophy that shed light on this critical working assumption in economics. Findings – Conventional analysis pays little heed to non economic constraints on human action that affect and delimit but do not preclude free choice or free will. Of vital importance to free will in choice behavior are institutions which delimit the extent of coercion in the decision-making process. Practical implications – An important implication for research is the determination of the necessary and sufficient conditions for the existence of free will in choice behaviour. Given the existence of free will and free choice, individuals are morally responsible for their choices. It is therefore important to determine the extent which free will exists and that which constrains free will in choice behaviour. Originality/value – This paper challenges the extremes of the free will debate in economics and suggests the boundaries within which free will exists in economic behaviour. It also suggests the welfare implications of limitations on free will where no negative externalities exist.
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Volume (Year): 33 (2006)
Issue (Month): 10 (October)
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