Subject: | |
From: | |
Date: | Thu Feb 15 13:56:56 2007 |
Content-Type: | text/plain |
Parts/Attachments: |
|
|
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
|
|
|