Social Economics: Market Behavior in a Social Environment

Gary S. Becker, Kevin M. Murphy

Harvard University Press, Feb 28, 2003 - Business & Economics - 190 pages

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.

About the author

Gary S. Becker was University Professor of Economics and Sociology at the University of Chicago. In 1992, he was awarded the Nobel Prize in Economics. Kevin Murphy is the George Pratt Shultz Professor of Economics and Industrial Relations, Graduate School of Business, the University of Chicago. He won the John Bates Clark Medal of the American Economics Association in 1997.

Bibliographic information

• Title: Social Economics: Market Behavior in a Social Environment
• Authors: Gary S. Becker, Kevin M. Murphy
• Edition: illustrated
• Publisher: Harvard University Press, 2003
• ISBN: 067401121X, 9780674011212
• Length: 190 pages
• Subjects: Business & Economics / Consumer Behavior; Business & Economics / Economics / General