Socialized view of man vs. rational choice theory: what does Smith’s sympathy have to say?

Research output: Contribution to journalArticleResearchpeer-review

Abstract

To explain the anomaly of cooperation in finitely repeated games, some economists advance a socialized view of man as an antidote to rational choice theory. This paper confronts these economists insofar as they trace the socialized view to Smith's theory of sympathy in The Theory of Moral Sentiments (TMS). TMS rather advances a view that anticipates rational choice theory. These economists misinterpret TMS because they fail to realize that Smith's sympathy actually involves two functions of sympathy: one that determines the optimal decision and another that determines the command of that decision. The dual function of sympathy parallels the two senses of rational choice: rationality as making the optimal decision and rationality as commanding that decision. Thus Smith's sympathy does not support the socialized view of man.

LanguageEnglish
Pages223-240
Number of pages18
JournalJournal of Economic Behavior and Organization
Volume143
DOIs
Publication statusPublished - 1 Nov 2017

Keywords

  • Command axis of choice
  • Decision axis of choice
  • Dynamic inconsistency
  • Emotions
  • Weak axiom of revealed preference

Cite this

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title = "Socialized view of man vs. rational choice theory: what does Smith’s sympathy have to say?",
abstract = "To explain the anomaly of cooperation in finitely repeated games, some economists advance a socialized view of man as an antidote to rational choice theory. This paper confronts these economists insofar as they trace the socialized view to Smith's theory of sympathy in The Theory of Moral Sentiments (TMS). TMS rather advances a view that anticipates rational choice theory. These economists misinterpret TMS because they fail to realize that Smith's sympathy actually involves two functions of sympathy: one that determines the optimal decision and another that determines the command of that decision. The dual function of sympathy parallels the two senses of rational choice: rationality as making the optimal decision and rationality as commanding that decision. Thus Smith's sympathy does not support the socialized view of man.",
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Socialized view of man vs. rational choice theory : what does Smith’s sympathy have to say? / Khalil, Elias L.

In: Journal of Economic Behavior and Organization, Vol. 143, 01.11.2017, p. 223-240.

Research output: Contribution to journalArticleResearchpeer-review

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