Goals or Preferences?

4 June 2007 at 6:18 am Nicolai Foss 3 comments

| Nicolai Foss |

My two favorite sociologists are Peter Abell and Sigwart Lindenberg. Both stress rationality (and rationalism), micro-foundations for social science research, and are (not surprisingly) sympathetic to, even admiring of, economics. However, neither is an uncritical admirer of economics.

In “Why the Microfoundations of the Social Sciences Should be Based on Goals Rather than Preferences” (you can find it on this page), Lindenberg argues that economists tend to conflate preferences and goals, or at least leaves open or trivializes the relationship between the two.

Preferences, he argues, belong to a logic of trade-offs, whereas goals belong to a logic of means-ends relationships. The problem with an economistic logic of preferences is that “… sociologically relevant processes that lead to preference orderings are left unexamined or implicit, whereas in the logic of goals they would naturally come to the fore as something that needs to be examined.”

One consequence is that economics, to the extent that it remains wedded to a logic of preferences, cannot fully address macro-micro links. Another consequence of sticking to this logic is that economics has difficulties understanding how processes of cognition and motivation interact: Cognitive processes in particular are strongly influenced by goals, and cognitions define the selection and representation of preferences and constraints.

Challenging and highly recommended reading.

Entry filed under: - Foss -, Methods/Methodology/Theory of Science, Papers.

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3 Comments Add your own

1. jonfernquest | 5 June 2007 at 1:21 am

“Lindenberg argues that economists tend to conflate preferences and goals…Preferences, he argues, belong to a logic of trade-offs, whereas goals belong to a logic of means-ends relationships. The problem with an economistic logic of preferences is that “… sociologically relevant processes that lead to preference orderings are left unexamined or implicit, whereas in the logic of goals they would naturally come to the fore as something that needs to be examined.”

This is great stuff but the link only leads to an abstract.

IMHO it’s a good way of stating why traditional economist talk about preferences and utility rankings is of little use to practicing historians trying to reconstruct what actually happened in dynamic environments saturated with uncertainty. Taleb’s recent Black Swan book, written by a practitioner, deals with thid sort of contingent situation, historian Braudel has a more reasonable approach though, namely in history human action/agency (Braudel’s histoire evenementuelle) is strategic and contingent upon underlying social environmental and technological constraints (Braudel’s histoire moyen and longue duree). Things change so quickly at important historical turning points (e.g. heavily analysed Battle of Waterloo) that what you want is continually changing in response to what you can get. Better hope for game theory endogenously determining preferences during these complex Black Swan transition periods. I’m looking at this sort of thing across geographical frontiers in Southeast Asia (c. 1350-1600).
2. Nicolai Foss | 5 June 2007 at 2:30 am

Jonfernquest, Sorry, you are right — link only leads to an abstract. You will need to write Sigwart for the full paper (which likely has been published). He has touched on these issues in most of his recent papers. They are definitely worth checking out. A very sophisticated thinker.
3. Gabriel M. | 18 June 2007 at 8:28 am

OK… not to trivialize, but “I wish economics was based on X!” is not a new phenomenon.

Coming up with alternative models, rich enought to accomodate at least what we do now… that’s another matter.