Chapter

Expanding and Reorienting the Scope of Economic Thinking

James Halteman and Edd Noell

in Reckoning with Markets

Published in print February 2012 | ISBN: 9780199763702
Published online May 2012 | e-ISBN: 9780199932252 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199763702.003.0008
Expanding and Reorienting the Scope of Economic Thinking

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This chapter traces efforts to expand the approach of economic thinking to political, legal, social, and religious institutions. Using rational choice analysis, these efforts move the discussion closer to value-laden areas of life. One important concern is the nature of the utility function, how it is formed, and what is utility or happiness?[CE1]Social norms, cooperation models, game theory, behavioral economics, and neuroeconomics all have something to say about human behavior,and they also have important moral ramifications. While some claim that behavioral responses in these cases are merely self-interest disguised, outward behavior seems to work best in the long run if it is heartfelt. Character traits that signal trust are strongest when backed by moral commitments, and there is evidence that human brains are hardwired with some empathetic tendencies. The work of Dan Kahneman and AmartyaSen is highlighted in the closing vignettes.

Keywords: institutions; utility functions; social norms; game theory; behavioral economics; neuroeconomics; dan kahneman; amartyasen

Chapter.  9748 words.  Illustrated.

Subjects: Financial Markets

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