Striving for Balance in Economics: Towards a Theory of the Social Determination of Behavior
Policy Research Working Papers
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 in standard economics is the rational actor with fixed preferences, and in early work in behavioral economics it is the quasirational actor shaped by the context of the moment of decision-making, in some of the recent work in behavioral economics it could be called the
... alled the enculturated actor. The enculturated actor's preferences and cognition are subject to two deep social influences: (a) the social contexts to which the actor 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 individuals' 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.