Sumitra Shah wrote:
>----------------- HES POSTING -----------------
>Apropos of the lengthy discussion generated by the Krugman essay on Milton 
>Friedman, here is an interesting summary by David Warsh of the AEA 
>proceedings and George Akerlof's presidential address. I believe the 
>address was mentioned in one of the posts. Below are  couple of quotes and 
>the link to the article. Akerlof makes an argument  for broadening the 
>field of vision of economic actors.
>
>http://www.economicprincipals.com/issues/07.01.07.html
>
>"Personal preferences as characterized by economists heretofore have been 
>excessively narrow, he argued. Taking account of individuals' feelings 
>about how they should and should not behave in particular circumstances 
>might make the landscape begin to resemble the one roughly sketched 
>three-quarters of a century ago by Keynes."
>
>I would think that this can be traced all the way back to Adam Smith's 
>view of how socialized individuals act in general and how even their 
>self-interested 'economic' behavior assumes a degree of reciprocity which 
>is crucial to his model of the market economy.
>
>"Economists first had to take norms as given before they could begin to 
>spin models of how they might change in response to changing economic 
>conditions."
>
>This is profoundly important to those who believe not only that norms 
>influence individual choices, but they also severely constrain the choices 
>available to many individuals.
>



I yield to few in my admiration for Akerlof's work generally, but I found 
this paper under-whelming.  Akerlof models norms comsequentially 
-  observing a norm increases one's utility.  Sen put his finger on the 
problems with this approach long ago, in "Rational Choice"  - it cannot 
capture the the "counter-preferential" choices that many norms commit us 
to.  Observing a norm is often an example of Senian "commitment." We 
sacrifice some utility to act in line with a norm - we choose 
counter-preferentially.


Kevin Quinn