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La influencia de las instituciones en la racionalidad del individuo a partir de Adam Smith
[The influence of institutions on individuals rationality from Adam Smith]

Author

Listed:
  • Calero, Analía Verónica

Abstract

The Neoclassical Theory assumes that individuals are essentially selfish and maximize the utility of their income, measured on some utility scale. It defines the rationality of individuals based on preference relations, which should not change by the context. However, it is a fact that individuals do not generally use these “market rules” with their families, friends, colleagues or in their neighborhoods. This behavior has been seen as “Bounded rationality” or “failures” in the individual’s behavior. The main objective of this paper is to explore this kind of behavior and pose some questions about how institutions influence the preferences and decisions of individuals in some contexts. The assumption we have is: In reality, the homo economicus considers context as additional information and reacts on that basis. He adapts to the community with which he interacts as a matter of “survival”. We conclude that there is a “Broader rationality” in that behavior, which goes beyond the one defined in the Neoclassical Theory, which is applicable in highly specific conditions.

Suggested Citation

  • Calero, Analía Verónica, 2006. "La influencia de las instituciones en la racionalidad del individuo a partir de Adam Smith [The influence of institutions on individuals rationality from Adam Smith]," MPRA Paper 32018, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32018
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    References listed on IDEAS

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    1. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    2. Sen, Amartya, 1994. "The Formulation of Rational Choice," American Economic Review, American Economic Association, vol. 84(2), pages 385-390, May.
    3. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    4. Joseph Henrich & Robert Boyd & Samuel Bowles & Colin Camerer & Ernst Fehr & Herbert Gintis & Richard McElreath, 2001. "Cooperation, Reciprocity and Punishment in Fifteen Small-scale Societies," Working Papers 01-01-007, Santa Fe Institute.
    5. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
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    Cited by:

    1. Calero, Analía Verónica, 2009. "La Teoría de los Sentimientos Morales y Una investigación sobre la naturaleza y causas de la Riqueza de las Naciones: tropezar dos veces con la misma piedra [Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nat," MPRA Paper 32022, University Library of Munich, Germany.

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    More about this item

    Keywords

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    JEL classification:

    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)

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