Social Economics: Market Behavior in a Social Environment

by Gary S. Becker, Kevin M. Murphy

Economists assume that people make choices based on their preferences and their budget constraints. The preferences and values of others play no role in the standard economic model. This feature has been sharply criticized by other social scientists, who believe that the choices people make are also conditioned by social and cultural forces. Economists, meanwhile, are not satisfied with standard sociological and anthropological concepts and explanations because they are not embedded in a testable, analytic framework.

In this book, Gary Becker and Kevin Murphy provide such a framework by including the social environment along with standard goods and services in their utility functions. These extended utility functions provide a way of analyzing how changes in the social environment affect people’s choices and behaviors. More important, they also provide a way of analyzing how the social environment itself is determined by the interactions of individuals.

Using this approach, the authors are able to explain many puzzling phenomena, including patterns of drug use, how love affects marriage patterns, neighborhood segregation, the prices of fine art and other collectibles, the social side of trademarks, the rise and fall of fads and fashions, and the distribution of income and status.

Genres: Economics, Nonfiction

182 pages, Paperback

First published January 1, 2000

About the author

American economist. He is a professor of economics and sociology at the University of Chicago and a professor at the Booth School of Business. He has important contributions to the family economics branch within the economics. Neoclassical analysis of family within the family economics is also called new home economics . He was awarded the Nobel Memorial Prize in Economic Sciences in 1992 and received the United States Presidential Medal of Freedom in 2007.He is currently a Rose-Marie and Jack R. Anderson senior fellow at Stanford University's Hoover Institution.

Reviews

[Lance Cahill]

Interesting thoughts all around. Discourses on fads, fashions, norms and behaviors, etc.

[J. Pineiro]

Fascinating insights on how economics is affected by social forces.

[Sam L]

Too many equations. May have to come back to it later.

[Kyla Alvey]

Interesting for sure! Has a LOT of math equations, and that can make it a bit tough for a lay person like myself to understand but overall very informative.