Mental modeling ranges from pure categorization, for example, of linguistic concepts, to cognitive representation of complex decision tasks involving stochastic uncertainty and strategic interaction. In the tradition of consequentialistic bounded rationality, we assume to choose among choice alternatives by anticipating their likely implications. Such deliberation basically requires causal relationships linking own choices (means) and determinants beyond own control, such as chance events and choices by others (scenarios), to the relevant outcome variables (ends). We suggest a general framework of mental representation whose aspects are illustrated for stochastic choice and strategic interaction tasks. We also discuss how this framework can be experimentally implemented, showing how experimental research can shed light on mental modeling and—more generally—cognitive processes, in addition to eliciting the usual choice data.
In this paper we extend the Granovetter threshold model with partial participation towards a collective action. That is, agents may partake by conducting an action that is less costly than the ultimate collective action, but costly enough to signal a commitment to the cause. We show that it is not just the exact distribution of thresholds, but also the distribution of available actions that determines whether a collective action will be achieved. We suggest and prove propositions for how both an inventive "activist" and a "dictator" may strategically change the signaling value of existing actions, or introduce new ones, in order to either instigate or stifle collective action. Applying the theory to revolutions, we argue that new technology can play a role beyond that of communication and synchronization, viz. that of adding modes of partial, less arduous, participation.
This paper examines the rationality of other regarding preferences on end-of-life decisions such as euthanasia and suicide, by extending the discounted future utility model. The discussion shows that individuals with other regarding preferences may act upon choices contrary to their ex-ante preferences, such that they are choosing to remain alive rather than opting for euthanasia or suicide. The policy extension is that individuals with close friends and/or family are less likely to take their own life, but can also prolong their own suffering because of the same attachments.
Since its first appearance in the late 1950s, the neoclassical economic theory of fertility, particularly as exemplified by Gary Becker’s model of household production function that assumes a unitary utility function of the household, has become one of the most popular paradigms with which to examine fertility changes. Recently, the bargaining model that assumes separate utility functions has emerged as a strong opponent to the original paradigm. This article provides network foundation to reconcile two competing economic paradigms. Our formal model predicts that the way in which separate utilities of couples are treated in their joint childbearing decisions depends on the network embeddedness of spouses (i.e. the intra-household network). If spouses are not embedded into each other’s networks, the assumption of the unitary utility function is no longer warranted, and their decision process follows the bargaining model. However, strongly embedded couples behave as if they share the common utility function, predicted by the Becker model. Our model prediction is supported by analysis of three waves of panel data, Korean Longitudinal Survey of Women and Families, collected in South Korea where a dramatic drop in the fertility rate is reported. We find that wife’s bargaining power, measured by the income difference between couples, can exert its influence on having a new-born child only when couples’ intra-household networks are weakly embedded, whereas strongly embedded couples consistently maintain high fertility rates regardless of how much wife earns. We conclude that social networks play a significant role in shaping how neoclassical economic models of fertility work and discuss its implication to the efforts enhancing the fertility rate.
Research on cultural consumption has focused either on socio-structural determinants or individual motives of cultural consumption. To better explain cultural consumption, we wish to more closely illuminate the role the supply side plays. We derive the role of the supply structure from a rather simple decision theoretical model of cultural demand. In our empirical investigation, we examine the impact of regional supply on the level of cultural consumption of both high and popular culture in Switzerland. We deploy two analytic strategies. First, applying multilevel analysis, we examine what influence the availability of cultural attractions in individual cantons has on cultural participation. Additionally, a quasi-experiment was used to determine whether the construction of a new cultural institution led to a systematic change in cultural behavior. Our main finding is that the availability of cultural attractions does contribute to explain cultural consumption. Nevertheless, individual socio-structural determinants remain, overall, of greater importance.
The rational choice literature on religion has been noticeably silent on the nature and purpose of religious authority. I first summarize the rational choice theory of authority and offer a rational choice definition of religious authority. A primary insight is that (religious) authority exists to coordinate social action. I then argue that social coordination is a fundamental aspect of religious life, perhaps equally important as the social dilemma problems that have received attention in the literature. Finally, I apply this new rational theory to demonstrate its value. I demonstrate how rituals create religious authority; the relationship between religious authority, organizational hierarchy, and religious strictness; and how the theory creates complementarities between the two, sometimes contentious, sides of the secularization debate.
This article addresses the question of how students and their families make educational decisions. We describe three types of behavioral model that might underlie decision-making, and we show that they have consequences for what decisions are made. Our study, thus, has policy implications if we wish to encourage students and their families to make better educational choices. We also establish the conditions under which empirical analysis can distinguish between the three sorts of decision-making, and we illustrate our arguments using data from the National Educational Longitudinal Study.
One of the most interesting rational religious choice models is that presented by Durkin and Greeley in a 1991 article. The authors base the problem of uncertainty of religious choice on Pascal’s Wager as a maximization problem of expected benefit and in faith as an insurance. The objective of the present article is to test the Durkin and Greeley hypothesis model for Brazil. Two dependent variables were used in the tests: religious attendance and faith, as in Durkin and Greeley’s original model, and resulted in a highly significant relation. The belief in an after-life had a positive and significant impact on the dependent variable degree of faith. In the case of the tests of the third and last hypothesis of the model, that is, religious attendance and faith are positively related to the religious capital accumulated by the individual, ambiguous results were observed in relation to the confirmation of that hypothesis. An unexpected result turned up: the more conservative the individual showed himself or herself in relation to abortion, the lower was his or her degree of faith and lower was his or her religious frequency.
The economic theory of the state is often illustrated using examples in which the emergence of a stationary bandit—a ruler who is able to centralize military and fiscal capacity—improves property security. This article argues that the economic theory of the state also provides insight into the conditions when the emergence of a stationary bandit leads to property insecurity. In our reading of the economic theory of the state, the rise of a stationary bandit is only expected to improve property security writ large when coercive power is unquestioned, political institutions constrain rulers, powerful groups do not dominate the political process, and de facto property institutions are inefficient. The framework clarifies why Afghanistan’s first stationary bandit, Abdur Rahman, maintained state ownership over all land, waged violent repopulation campaigns, and drastically increased taxation before, during, and after centralizing state power from 1880 to 1901, while basic land use rights emerged from 1747 to 1880, a period when the state fell short of a monopoly on coercion.
A parsimonious set of mechanisms explains how and under which conditions behavioral deviations build into cascades that reshape institutional frameworks from the bottom up, even if institutional innovations initially conflict with the legally codified rules of the game. Specifically, we argue that this type of endogenous institutional change emerges from an interplay between three factors: the utility gain agents associate with decoupling from institutional equilibria, positive externalities derived from similar decoupling among one’s neighbors, and accommodation by state actors. Where endogenous institutional change driven by societal action is sufficiently robust, it can induce political actors to accommodate and eventually to legitimize institutional innovations from below. We provide empirical illustrations of our theory in two disparate institutional contexts—the rise of private manufacturing in the Yangzi delta region of China since 1978, focusing on two municipalities in that region, and the diffusion of gay bars in San Francisco in the 1960s and 1970s. We validate our theory with an agent-based simulation.
Principals bestow awards in different forms, such as orders, medals, decorations, badges, prizes, or titles. Our contribution focuses on the givers’ side of award bestowals and analyzes the distinct purposes that such bestowals serve. Awards have the potential to raise their recipients’ intrinsic motivation, while money is more likely to crowd it out. Awards establish special ties of loyalty between the givers and recipients. The threat of withdrawal by the givers, and rejection by recipients, serves as a mutual control mechanism on future behavior. Givers may bask in the reflected glory of well-known personalities whom they honor. They may exploit the expressive function of awards and signal to agents and the public what kind of attitude and behavior they value.
In laboratory experiments, people are willing to sanction norms at a cost—a behavioral tendency called altruistic punishment. However, the degree to which these findings can be generalized to real-world interactions is still debated. Only a small number of field experiments have been conducted, and initial results suggest that punishment is less frequent outside of the lab. This study replicates one of the first field experiments on altruistic punishment and builds ties to research on norm compliance and the broken windows theory. The original study addressed the enforcement of the anti-littering norm in Athens. We replicate this study in Bern, Zurich, and New York City. As an extension, we investigate how the experimental context (clean vs littered) impacts social norm enforcement. As a second extension, we investigate how opportunity structure impacts the maintenance of the anti-littering norm. Findings indicate that norms are universally enforced, although significantly less than in the standard laboratory experiment, and that enforcement is significantly more common in Switzerland than in New York. Moreover, individuals prefer more subtle forms of enforcement to direct punishment. We also find that enforcement is less frequent in littered than in clean contexts, suggesting that broken windows might not only foster deviant behavior but also weaken informal social control. Finally, we find that opportunity structure can encourage people to maintain norms, as indicated by the fact that people are more likely to voluntarily pick up litter when it is closer to a trash bin.
Bryan Caplan’s The Myth of the Rational Voter popularizes the "near-neoclassical" demand curve for irrationality. This article attempts to show that there is a demand for irrationality at prices higher than zero. This may change policy implications. Many instances of consumer behavior, such as paying a premium for locally produced and "fair trade" goods, the use of local currencies, and the failure to vaccinate children, are other instances of the means-ends irrationality that Caplan observes in political markets.
Indirect reciprocity is increasingly recognized as a desirable approach to support social organizations which address intractable social problems within societies. Using social organizations operating in the third sector in Tanzania, we investigate how causal mechanisms help social organizations to initiate indirect reciprocal relations with benefactors. Moreover, we address the potential consequences of such relations to both benefactors and social organizations. Our findings reveal that establishing reciprocal relations is contingent to the credibility of social organizations and compassion capability of benefactors. Also, the findings identify positive and negative consequences of indirect reciprocity to both benefactors and social organizations. Based on these findings, we clarify the contradiction regarding the consequences of indirect reciprocity and propose a framework of inter-organizational reciprocal relations that fosters social entrepreneuring in the third sector. Furthermore, we highlight the implications of our findings for theory and practice and suggest areas for future research.