Comments on: The Logic of Appropriateness

By: srp

srp — Tue, 18 Dec 2007 00:54:07 +0000

And we should also mention Alan Fiske’s argument that humans perceive all social interaction as falling into one of four distinct categories: authority relations, equality matching, communal sharing, or market pricing. Different people and different cultures place the same type of interaction (e.g. visiting Mom or planning Mom’s taxes) into different categories, which can lead to conflict; but in many cases, people in the same culture will agree on what should be handled which way.

By: Nils Stieglitz

Nils Stieglitz — Mon, 17 Dec 2007 11:22:14 +0000

A good, thoughtful paper on the logic of appropriateness is David M. Messick (1999): Alternative logics for decision making in social settings. Journal of Economic Behavior & Organization. Vol. 39, pp. 11-28. It presents some empirical evidence and points to three possible components of the logic of appropriateness. His key claim is that the “approach suggests that a judgment or perception of appropriateness precedes and mediates choice and other judgments, perceptions, expectations, and attributions.”

One should also not forget about Akerlof’s attempt to integrate identity into a standard utility-maximizing framework. However, this approach abstracts away the rule-driven nature of (some) decisions.

By: bee

bee — Mon, 17 Dec 2007 00:07:56 +0000

I think our friends March and Olsen are borrowing heavily from psychology on this one. If I am reading you correclt it sounds like they are offering a variant of Ajzen and Fishbein’s (1967) theory of Reasoned Action (please see http://www.ciadvertising.org/student_account/spring_02/adv382j/jagurule/Image1.gif)

By: Joe Mahoney

Joe Mahoney — Sun, 16 Dec 2007 00:00:12 +0000

I believe we are in agreement, Nicolai.

By: Nicolai Foss

Nicolai Foss — Sat, 15 Dec 2007 21:27:36 +0000

Joe, I may be misunderstanding you, but who said that putting appropriateness in the utility function was “normative”? I didn’t. March doesn’t. To provide a specification of a utility function is not “normative.” It seems to me to be entirely descriptive/positive. To pass moral judgment on the contents of the utility funciton is, on the other hand, to engage in normative reasoning. Is that what you mean? If so, we are in agreement.

By: Joe Mahoney

Joe Mahoney — Sat, 15 Dec 2007 16:29:58 +0000

Nicolai, Your comment is reinforcing to my original point:

Putting appropriateness in the utility function is no more normative than putting money in the utility function.

Steve’s comments add a lot of insight beyond this point.

By: Nicolai Foss

Nicolai Foss — Sat, 15 Dec 2007 11:09:50 +0000

Joe, I am not sure what you are getting at (and why Steve agrees). The logic of appropriateness is as positive as the standard RC model. “Appropriateness” does NOT have a normative dimension. It is “appropriateness” as seen from the point of the actor, NOT the analyst. It is a theory of how decision-makers set up their decision-situation.
It is true that March and Olsen somehow fits the logic of appropriateness into a broader picture of democracy, but that is really a different story.

By: spostrel

spostrel — Sat, 15 Dec 2007 02:26:33 +0000

I agree with Joe about the Protean ability of standard econ to accommodate lots of different preference types. The trouble, of course, is that all those free parameters make it harder to operate the positivist machine–you can explain anything with enough potential preferences. Hence the Chicago penchant for assuming homogeneous and unchanging preferences over standard objects (money, leisure, etc.). I think this approach is too restrictive and throws out a lot of systematic behavior, such as engineers’ love for implementing new technology and for being given strict and clear objectives (”just tell us the rules”).

A rule of bounded rationality that said some potential objects of preference simply never get considered could reduce the number of free parameters. So if it’s inapporpriate to think about Mom’s estate in some contexts, such as when deciding whether to call or visit, but appropriate in others, such as when helping her with her taxes, we might get seemingly inconsistent behavior from a standard econ point of view.

Say that the number of calls and visits is not correlated to the size of Mom’s estate but one’s tax advice is. A logic of appropriateness theory might–I stress might–be simpler than trying to cook up a utility function that rationalizes those choices. And it might make more predictions in other areas.

I’ve now exhausted my ability to defend anti-econ theory.

By: Joe Mahoney

Joe Mahoney — Fri, 14 Dec 2007 18:04:14 +0000

In economics I was taught the following:

1. Rationality has to do with means (e.g., actions) being consistent with ends/goals.

2. As positiivists we do not pass judgment on the goals per se. For example if Captain Ahab wants to catch a big white whale, so be it.

3. If a person puts appropriateness and identity in their utility function as part of what that person wants to maximize, who am I as a mere positivist economist to pass judgment on the objective function?

4, My job as an economist is to set up the contrained maximization problem and serve my humble function.

In this light, I have trouble understanding on what basis any positivist social scientist would have anything to say about what is allowable or not allowable in a person’s utility function.

“De Gustibus est non desputadum.” (Of taste, one cannot quarrel).

As a footnote I add why would maximization of dollars be “scientific” and maximization of approriateness be “unscientifc” and “mushy”? Pehaps the primary issue is that concepts that are more easily measured (like money) drive theory and win the day.