The Economic Way of Looking at Behaviour
Gary S. Becker
This paper aims to defend Rational Choice Theory (RCT) as a lens through which to understand human behaviour. This is the idea that people maximise welfare “as they conceive it” through the decisions that they make. He does through looking at a variety of instances where RCT seems to explain human behaviour.
The first is crime, where he argues that people weigh up the chances of chances of getting caught, punishments if caught, benefits and others. This can be applied on small scales such as considering whether to park illegally by the benefit you reap, the chance of getting caught et.c., but can also apply to other instances to explain why on a macro-level crime occurs more often. RCV looks at the micro-level decisions that individuals must make to try to better understand what happens on a macro-level.
The second is human capital. This is used to explain why marriage and divorces occur, caused by (according to RCT) different rational and economic evaluations of the increase or decrease of welfare in or outside of a marriage.
It does the same thing to explain gender wage gaps, where the comparative advantage that men used to have in social status or cultural expectation to work led them to use this advantage, whereas married women, who had the inverse did not. Now of course this is changing as women are encouraged to work and go into varied and developed fields.
The final analysis is of the rational of having fewer children and better investing in them in more developed countries. The paper mentions how Malthus was discredited for using the RCT to prove that overpopulation was inevitable. However, Becker defends the theory by saying that it was not the theory, but the false assumptions that Malthus had about modern life (such as the need for heavy investment in children). The theory also explains why investing in a heavily in a child’s education (as the trend is seen to be at the moment) is explained by the expected increase in earnings that will hopefully also look after the parents who make that decision.
In short, the paper defends the RCT as an effective way of understanding and predicting human behaviour if the parameters used by it are correct.
Reasons for Altruism
In this paper, Schmitz analyses the reasons that altruism is not only a more moral and caring way for one’s character to be, but also should be adopted by all for purely self-interested rational reasons.
The core argument of this paper is that being purely self interested does not in fact improve your welfare. Instead engaging with others and seeing one’s character develop through the faults and flaws but also the successes and good traits of others a lot of the better understand ourselves.
Additionally a rather neat point made is that through displaying characteristics such as altruism when it actually has more to live for and improves their own well being as well.
The way to do this paper argues is through bridging the gap between concern and commitment on a regular basis. It is one thing to care and sympathy with us but is another to be committed and actively try and improve their welfare if possible. Through habit this makes us better side of the country improve the welfare of all involved and also give one more to live for as one develops relationships friendships and feels more self-worth then they would otherwise would.
Behaving and naturalistic way it enriches one’s life and also as I mentioned the developing of character is mainly done through interaction with other people where the valleys and characteristics and traits are we see ourselves but we feel ourselves and then shown under pressure or under strain to her behaviour towards other people, making them real characteristics.
In Short, it is clear that on a macro-scale, the link between integrity and rationality is clear and also essential in a prosperous and caring society and altruism can help bring that about.
Rationality; Maximisation Constrained
This paper tries to explain how in a society with other constrained maximisers (CMs), following their rationale is better than those of straightforward maximisers (SMs). CMs are people who think and act on the idea that a joint strategy with someone they perceive to also be a CM will yield greater benefit. Contrastingly, a SM is someone who simply seeks to maximise their “utility” (benefit) based on the strategies of other people.
A key point made is that a CM position allows for more options and more upside than an SM position. The latter is limited as they cannot gain as much upside through collaboration then they otherwise could. As the CM adopts his strategy dependent on who he is facing, he will usually be able to tell a SM from a CM and ensure the he is not ripped off. Through the use of probability, under the assumption that a CM can tell a CM from an SM, it is clear that not only is the optimal situation reached, but the CM is also more moral then the SM.
The SM only cares for himself and will never compromise a gain for another. However, the CM wants to improve the situation for both parties involved. The reason that the SM position is immoral is that it readily leaves morality for utility-maximisation, whereas the CM mainly bridges these gaps and ensures a moral and utility-maximisation outcome.
The only problem with being a CM is that it relies on their being many other like them. A CM strategy does not work is you are surrounded by SMs. There are also very extreme instances the CM strategy would allow for very immoral behaviour, though again, this is often contingent on a SM majority.
In Short, this paper neatly explains how we can all in fact rationally pursue the most moral and utility-maximising strategy instead of incurring unnecessary loses and caring only for ourselves.
The Toxin Puzzle
The toxin puzzle explores the difference between one’s intention to do something and once actual carrying out of such an action.
It’s set up a hypothetical situation where a billionaire offers you £1 million if you can show that you intend to drink a vile that will make you fall asleep for one day. The issue with that you’ll have to intend to drink the Violet once the million pounds is already deposited so regardless of whether you actually drink it you will have 1 million. But the issue is you have a special intention testing device that will tell him where you actually intend to drink it before you act before the money is deposited.
Consequently, you have to try it across to try and force yourself to intend to do this. Paper tackles all of the potential loopholes and solutions to the situation.
However, the real point of paper is to show the issue between what one intends to do and what one actually does. So, you can intend to do something carried out is very different.
It also attempts to show that the rational choice theory fails to prove that the intuitively we should drink vile or should intend to drink it there is no rational reason for intending to drink in the toxin and so one could not sin the million.
This hypothetical allows us to explore the difference between intention and carrying out an action and also shows that the rational choice theory model of how people behave fails in this case to explain why we should win £1 million (as even intending to do is irrational)