Working Paper: NBER ID: w21823
Authors: Karla Hoff; Joseph E. Stiglitz
Abstract: This paper is an attempt to broaden the standard economic discourse by importing insights into human behavior not just from psychology, but also from sociology and anthropology. Whereas the concept of the decision-maker is the rational actor in standard economics and, in early work in behavioral economics, the quasi-rational actor influenced by the context of the moment of decision-making, in some recent work in behavioral economics the decision-maker could be called the enculturated actor. This actor's preferences and cognition are subject to two deep social influences: (a) the social contexts to which he has become exposed and, especially accustomed; and (b) the cultural mental models—including categories, identities, narratives, and worldviews—that he uses to process information. We trace how these factors shape individual behavior through the endogenous determination of both preferences and the lenses through which individuals see the world—their perception, categorization, and interpretation of situations. We offer a tentative taxonomy of the social determinants of behavior and describe results of controlled and natural experiments that only a broader view of the social determinants of behavior can plausibly explain. The perspective suggests new tools to promote well-being and economic development.
Keywords: social determinants; behavioral economics; preferences; cognition; cultural mental models
JEL Codes: A12; D00; D01; D03; D20; D50; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social contexts (Z13) | individual behavior (D01) |
| social norms (Z13) | selfish behaviors (D91) |
| cultural mental models (Z10) | individual preferences (D11) |
| social experiences (Z13) | cultural mental models (Z10) |
| social context (Z13) | cognitive frameworks (D91) |
| social influences (C92) | individual cognition (D91) |