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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

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A Theory of Utopian Behavioral Economics

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  1. A Theory of Utopian Behavioral Economics Fred Foldvary Dept. of Economics, SCUBay Area Behavioral and Experimental Economics WorkshopMay 5, 2012

  2. “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.

  3. 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.

  4. Adam Smith • Theory of Moral Sentiments • Human motivation from sympathy. • The two human motivations: • Self interest and sympathy

  5. 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

  6. 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?

  7. 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...”

  8. 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.

  9. 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.

  10. Neighborhood councils • In electing a neighborhood council, residents interact in a face-to-face context.

  11. 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.

  12. 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.

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