Economics, Rationality and Values
Economists have traditionally viewed markets as places where people are motivated by rational self-interest. Even when their decisions seem irrational -- like thinking the value of tulips will keep going up -- their underlying interest is straightforwardly selfish.
In practice, however, market participants are also "altruistic and fair, envious and status-seeking," write Duke University researchers Scott Huettel and Rachel Kranton. People are complicated; they're often motivated by factors, especially social factors, other than money and self-interest. Huettel and Kranton propose a field of research they call "identity neuroeconomics": Applying neuroscientific tools to better understand how social values affect thought processes and ultimately economic decisions.
An early focus of the research could involve transactions between people who have strong or weak social ties, or between people allowed to know the other's identity or kept anonymous -- an especially relevant set of conditions in a global economy that allows both intimate long-distance cooperation and complete facelessness.
Image: Bran Sorem/Flickr
Citation: "Identity economics and the brain: uncovering the mechanisms of social conflict." By Scott A. Huettel and Rachel E. Kranton. Philosophical Transactions of the Royal Society B, Vol. 367 No. 1589, March 5, 2012.
