When Does “Economic Man” Dominate Social Behavior?
The canonical model in economics considers people to be rational and self-regarding. However, much evidence challenges this view, raising the question of when “Economic Man” dominates the outcome of social interactions, and when bounded rationality or other-regarding preferences dominate. Here we show that strategic incentives are the key to answering this question. A minority of self-regarding individuals can trigger a “noncooperative” aggregate outcome if their behavior generates incentives for the majority of other-regarding individuals to mimic the minority’s behavior. Likewise, a minority of other-regarding individuals can generate a “cooperative” aggregate outcome if their behavior generates incentives for a majority of self-regarding people to behave cooperatively. Similarly, in strategic games, aggregate outcomes can be either far from or close to Nash equilibrium if players with high degrees of strategic thinking mimic or erase the effects of others who do very little strategi
Related Questions
- Why are several major areas lumped all in nicotine dependence, policy, social, behavior etc? What about exposure assessment issues?
- What do sociologists mean by social control and when do social controls influence behavior?
- Do Poverty Attitudes of Social Service Agency Directors Influence Organizational Behavior?
