CULTURE, UNIVERSAL (OR NOT) PREFERENCES AND SOCIAL WELFARE
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Authors:
• John M. POLIMEN, Afiliation: Albany College of Pharmacy and Health Sciences USA
• Raluca-Ioana IORGULESCU, email: raluca_i@lycos.com, Afiliation: „Athenaeum” University, BucharestPages:
• 12|20 -
Keywords: endogenous preferences, culture, institutions, social welfare
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Abstract:
Real economic systems—at least during the past two hundred years or so—undergo rapid, qualitative and irreversible change. Economic change may be driven by exogenous factors such as changing resource endowments or climate change and also by different patterns and speeds of cultural adaptation, institutional change, and historical accidents.
To explain economic behavior, we need to move beyond the simplifying idea of Homo economicus. Without independent and rational agents economic theory loses its mathematical certainty. Studies in the field of game theory and behavioral economics promoted experiments that further the traditional economic conception of human behavior and emphasize the importance of cultural differences in determining economic behavior.
Modern welfare economics is increasingly interdisciplinary and influenced by psychology, sociology and anthropology and incorporates concepts such as interpersonal comparisons of utility and endogenous preferences.
This paper discusses how the existence of endogenous preferences and cultural institutions is the essential explanation to why the neoclassical model of competitive economies can not be adopted in every country.