======================= HES POSTING ================= 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 ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]