The Self According to Others: Explaining Social Preferences with Social Approbation

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Abstract

In past decades, significant behavioural work has been done in economics contesting the human agency model known as Homo Economicus. These findings are, however, far from integrated in mainstream economic theory, which builds heavily on the neoclassical tradition. Beyond tracing the axiomatic foundations of mainstream economic agency, I reconstruct the argument made by Bernard Mandeville and Adam Smith that human choice also depends on the desire for social approbation. The social approbation mechanism complements material self-interest and provides a more diverse toolset when explaining social preferences. I begin by proposing that mainstream economic agency confines the study of human action, in particular large-scale collaboration, to an artificially-limited spectrum because it reduces society to atomistic individuals who maximise one all-purpose measure of value: utility, which is often instrumented with consumption. Collective action is therefore only sustainable when material incentives are in place, as the economic agent rides for free unless financially penalized. To explain pro-social behaviour from the standpoint of self-interest, Mandeville and Smith propositioned that agents also maximise social approbation, which conveys incentives to act pro-socially because the desire for others’ approval encourages compliance with social norms.  The upshot for collective action is that, assuming social norms represent common goals, approval from others provides an extrinsic motive for pro-social behaviour. I formalise the mechanism by proposing a simple utility function in which agents maximise social approbation as well as material self-interest.

Posted for comments on 20 Nov 2017, 11:28 am.

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