Economics, Values, and Organization

This collection of papers derives from a conference on Economics, Values, and Organization that took place at Yale University in April 1996. The collection's premise is that in order to understand how societies work we need a theory of how values and preferences are formed. These determine how we interact with each other. Furthermore, values and preferences mutate over time under evolutionary pressure and this has implications for social institutions. This book brings together economic theorists, historians, political philosophers, sociologists and psychologists in order to explore these questions. After a foreword from Amartya Sen, Putterman and Ben‐Ner give an overview of the volume and offer some views on how human preferences and values can be modelled. They also consider the relationship between values and institutions. Part I, which follows, consists of four chapters on the formation and evolution of social norms and values. Robert Sugden considers the question of how norms evolve, a subject to which he has made distinguished contributions. Sugden outlines a theory of `normative expectations' in which people are motivated to behave in order to conform to the expectations of others. Sugden suggests that a desire to conform is part of natural human psychology. It arises from a fear of disapproval and resentment. Although this can lead people to act in ways that are against their own self‐interest, there is no reason to suspect that the conventions that arise from conforming behaviour are necessarily socially beneficial. Ken Binmore attempts to provide a `naturalistic' defence of utilitarianism. He argues that evolution created Rawls and Harsanyi's `veil of ignorance' as an equilibrium selection device in what he calls the “game of life”. This device is feasible since human beings have been endowed with the capacity to imagine themselves in other people's shoes and with other people's preferences. Binmore studies the conditions under which such empathy leads to the implementation of weighted utilitarianism. The chapter makes for rather dense reading and I would recommend that readers consult his important, recent books on political philosophy for a fuller exposition. Chaim Fershtman and Yoram Weiss ask ‘why do we care what others think about us?’ in a world where only the fit survive. They show that players who care about the social status that is conferred by behaving cooperatively relative to the average in society may obtain higher payoffs than those who routinely choose unco‐operative strategies. In this way social status serves as a reward mechanism. The final paper in this section by Jane Mansbridge argues that human values cannot be derived from self‐interest alone

Economics · Epistemology · Law and economics · Naturalism · Normative · Order (exchange · Political science · Politics · Positive economics · Premise · Resentment · Sociology · Subject (documents · Utilitarianism · Economic Theory and Institutions · Law · Philosophy