Karla Hoff of the World Bank and Joseph Stiglitz of Columbia have a new working paper out, Striving for Balance in Economics: Towards a Theory of the Social Determination of Behavior. The paper is an attempt to convince economists to go beyond the psychologically-informed actor of behavioral economics and embrace an “enculturated actor”, rooted in research from social psychology and even our own sociology. I found the table on page 10 especially useful as a summary one could share with students of the contrast between the “standard” economics of perfect rationality to the now-traditional behavioral economics actor of imperfect rationality and the enculturated actor informed by sociology.
Here’s the full abstract for the piece:
This paper is an attempt to broaden the standard 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 is the rational actor in standard economics 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 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. We trace how these factors shape individual behavior through the endogenous determination of both preferences and the lenses through which individuals see the world—their perception, categorization, and interpretation of situations. We offer a tentative taxonomy of the social determinants of behavior and describe results of controlled and natural experiments that only a broader view of the social determinants of behavior can plausibly explain. The perspective suggests new tools to promote well-being and economic development.
The whole thing is interesting as an attempt to make concepts like “social construction” useful for mainstream economists, and to grapple with results from cross-cultural studies in psychology and anthropology. All in all, it seems like a positive sign for the possibilities of a rapprochement between economics and sociology.