Transcript A Theory of Utopian Behavioral Economics

A Theory of Utopian Behavioral
Economics
Fred Foldvary
Dept. of Economics, SCU
Bay Area Behavioral and
Experimental Economics Workshop
May 5, 2012
“Pro-social” defined
• Three levels, pro-social human action:
1) avoidance of coercive harm
2) cordial relationships
3) benevolence (acts the recipient deems
to be good).
• Human action is minimally pro-social
at the first level. No cheating, etc.
Pro-Social Behavior
• How is societal behavior shaped by the
economic environment.
• Lao Tzu (Lǎozǐ)
• Tao te Ching; Dao De Jing
• If I keep from imposing on
people, they become
themselves.
Adam Smith
• Theory of Moral Sentiments
• Human motivation from sympathy.
• The two human motivations:
• Self interest and sympathy
Pro-social behavioral economics
• A Survey of Economic Theories and
Field Evidence on Pro-Social Behavior
Stephan Meier, 2006
• Institutional environments significantly
interact with pro-social preferences
Henry George
• Progress and Poverty, 1879
• Would the cessation of economic
deprivation induce a significant growth
of pro-social behavior?
• From whence springs this lust for gain?
• Does it not spring from the existence
of want?
Why do we admire the rich?
• “The sting of want and the fear of want
make men admire above all things the
possession of riches, and to become
wealthy is to become respected...”
• “Shortsighted is the philosophy which
counts on selfishness as the master
motive of human action...”
well-bred men and women dining
• Each one is anxious to help his
neighbor before he partakes himself.
• The swift and heavy penalty of social
contempt and ostracism would show
how [selfish] conduct is reprobated.
Institutional environment
• The dinner party constitutes an
institutional environment,
• a community.
• pro-social behavior is enhanced also by
the existence of a community of
organized social interaction.
Neighborhood councils
• In electing a neighborhood council,
residents interact in a face-to-face
context.
social heterogeneity
• How can individual and minority
interests be harmonized with the values
of the majority?
• Action that may be offensive but not
invasive of persons and property would
be tolerated.
For pro-social behavior:
1) The recognition of a universal ethic
that respects equal self-ownership.
2) Small-community bottom-up voting
and governance.
3) The elimination of economic
deprivation.