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This was posted without response on RESECON, which is devoted mainly to 
environmental economics and the like.  It seems as though HES people 
can contribute. 
 
Mike Robison 
Michigan State University 
 
 
[Editor's Note: 
Mike, I trust you will forward responses to Graham Marshall -- HB] 
 
 
Graham Marshall wrote: 
> 
> Dear RESECON-ers 
> 
> In neo-classical economics we assume that all agents are motivated solely 
> by 'self-interest'. But what precisely do we mean? Do we mean that 
> individuals will only do something if it directly benefits themselves (a 
> narrow definition)? Or do we mean that individuals might also sometimes 
do 
> things for other people to the extent that they indirectly reap 
> satisfaction from such 'generosity' (a broad definition)? 
> 
> I've been reading around trying to figure this out. There are 
'hard-liners' 
> like Stigler and Becker who seem to be arguing the case for the narrow 
> definition. (At least, that is how Amartya Sen in 'On Ethics and 
Economics' 
> (1987) interprets them). There are other like Lipsey et al. (1986) 
> (Positive Economics for Australian Students) who have adopted the broad 
> definition. For instance, Lipsey et al. say that the assumption of 
> self-interest "is sometimes taken to mean that households are assumed to 
be 
> narrowly selfish and devoid of any altruistic motives. On the contrary, 
if 
> a household derives satisfaction from giving its money away to others, 
this 
> can be incorporated into the analysis . . . ". 
> 
> I have two questions: 
> 
> 1. Does 'mainstream' neo-classical economics have a strict position on 
> which assumption is the valid one? 
> 2. Is the attainment of Pareto-optimality conditional, inter alia, on 
> utilisation of the narrow assumption? (as Sen (1987) suggests)? 
> 
> I would appreciate your help on this. I would particularly like to be 
> steered to 'authoritative' literature that answers these questions. 
> 
> Best wishes, 
> 
> """"""""""""""""""""""""" 
> Graham Marshall 
> Department of Economics 
> University of New England 
> Armidale NSW 2351 
> Australia 
> Phone:  +61 (0) 67 73 3250 
> Fax:      +61 (0) 67 73 3280 
> E-mail:  [log in to unmask] 
> ____________________________ 
> 
> 42nd ANNUAL CONFERENCE OF THE AUSTRALIAN AGRICULTURAL 
> AND RESOURCE ECONOMICS SOCIETY 
> 19-21 January, University of New England, Armidale, Australia. 
> Paper titles due 1st August 1997. Abstracts due 1st November 1997. 
> For further details see the conference website: 
> http://www.une.edu.au/febl/DARE/aares.htm 
 
 
 
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