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Striving for balance in economics : towards a theory of the social determination of behavior

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  • Hoff,Karla
  • Stiglitz,Joseph E.

Abstract

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 models?including categories,identities, narratives, and worldviews?that 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 world?their 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.

Suggested Citation

  • Hoff,Karla & Stiglitz,Joseph E., 2016. "Striving for balance in economics : towards a theory of the social determination of behavior," Policy Research Working Paper Series 7537, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7537
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    Cited by:

    1. Karen Macours & Renos Vakis, 2017. "Sustaining Impacts When Transfers End: Women Leaders, Aspirations, and Investments in Children," NBER Chapters,in: The Economics of Poverty Traps National Bureau of Economic Research, Inc.
    2. repec:eee:deveco:v:129:y:2017:i:c:p:47-57 is not listed on IDEAS
    3. Carin van der Cruijsen & Frank van der Horst, 2016. "Payment behaviour: the role of socio-psychological factors," DNB Working Papers 532, Netherlands Central Bank, Research Department.
    4. Mayra Buvinic & Megan O’Donnell, 2017. "Gender Matters in Economic Empowerment Interventions: A Research Review," Working Papers id:11926, eSocialSciences.
    5. Naseer, Shaheen & Heine, Klaus, 2017. "Bureaucratic Identity and the Shape of Public Policy: A Game Theoretic Analysis," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168144, Verein für Socialpolitik / German Economic Association.
    6. Roberto Tamborini, 2016. "The ''obscure puzzle'' of management control. Any remedy?," DEM Working Papers 2016/02, Department of Economics and Management.
    7. Mayra Buvinic & Megan O’Donnell, 2017. "Gender Matters in Economic Empowerment Interventions: A Research Review - Working Paper 456," Working Papers 456, Center for Global Development.
    8. Borrell-Porta, Mireia & Costa-Font, Joan & Philipp, Julia, 2018. "The 'Mighty Girl' Effect: Does Parenting Daughters Alter Attitudes towards Gender Roles?," IZA Discussion Papers 11259, Institute for the Study of Labor (IZA).
    9. Robert Gibbons & Marco LiCalzi & Massimo Warglien, 2017. "What situation is this? Coarse cognition and behavior over a space of games," Working Papers 09, Department of Management, Università Ca' Foscari Venezia.
    10. Joseph E Stiglitz, 2018. "Where modern macroeconomics went wrong," Oxford Review of Economic Policy, Oxford University Press, vol. 34(1-2), pages 70-106.
    11. repec:eee:joepsy:v:64:y:2018:i:c:p:89-104 is not listed on IDEAS
    12. Joseph E. Stiglitz, 2017. "The Revolution of Information Economics: The Past and the Future," NBER Working Papers 23780, National Bureau of Economic Research, Inc.
    13. Carlos Sáenz-Royo, 2017. "A plausible Decision Heuristics Model: Fallibility of human judgment as an endogenous problem," Working Papers 2017/04, Economics Department, Universitat Jaume I, Castellón (Spain).

    More about this item

    Keywords

    Social Analysis; Social Development&Poverty; Quality of Life&Leisure;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D00 - Microeconomics - - General - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D20 - Microeconomics - - Production and Organizations - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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