Toward a Dual Motive Metaeconomic Theory

Gary D. LynneDepartment of Agricultural

Economics and School of Natural Resources

University of Nebraska-Lincoln

Metaeconomics as “Marketing”

“ Researchers await a new theorist who will assimilate the old theories and present an integrated theory incorporating previous concepts and propositions. A cynical colleague of mine once said that such a task requires the services of someone in marketing because the ideas will not be new ones but merely old ones presented in new packaging” (in commenting on the state of personality theories, Lester, 1995, p. 161).

Metaeconomic Premises Nothing new: “das Adam Smith problem” has

been recognized for a very long time Economic actions “not from benevolence … but to

their self-interest” (Smith, 1776); yet, “How selfish soever man may be supposed… often

derive sorrow from the sorrow of others… by conceiving what we ourselves should feel in the like situation… by the imagination we place ourselves in his situation… excites some degree of the same emotion…” (Smith, 1759)

Smith was really all about finding “peace of mind” due to these conflicting interests (see Wight, 2002), through the vehicle of empathy made conscious in the “3rd station” (See Sen, 2002)

Premises… cont Neuroscience: Two brain circuitries…

egoistic self-interest and empathetic other-interest… under homeostatic physiological regulation (Cory, 1999, 2004) by the 3rd part of the brain

Holistic psychology: Tendency toward 3-subselves (Angyal, 1941/1967; Berne, 1961; Lester, 1995; Rowan, 1990)

Premises… cont Other social sciences: Inherent conflict among

the subselves, especially between the two interests (Cory, 1999, 2004; Elster, 1979; Etzioni, 1986, 1988; Lester, 1993/94; Lutz, 1993; Margolis, 1982)

Interests (and subselves) are inherently integrated… a unity within the one self… due to jointness; metaeconomics is not a “multiple selves” theory

In contrast to multiple selves theory, metaeconomics facilitates “normative assessment of internal conflict” (as called for by D. George, 2001/2004)

Premises… Self-interest and Other-interest arise

largely in the instincts, the latter especially being in the subconscious (goes beyond Kahneman, 1993, esp. p. 1451, who sees instincts as emotional)

Egoistic-hedonistic pursuit of the self-interest is integrated and balanced with the Empathetic-altruistic pursuit of the other interest, with the possibility for real sacrifice in both domains

Premises… Rational choice expanded to include the

conscious, empathetic conditioning of self-interest (A. Smith’s, 1759, “third station” to condition the self-interest identified in Smith, 1776; Sen’s, 2002, “impartial spectator based justice”)

Resolution of the conflict comes from individuals achieving “peace of mind” through each interest conditioning the other (after Adam Smith; see Wight, 2002); this “peace” is the ultimate objective on a higher plane of understanding

Premises…

On control (self-control and otherwise): This pursuit of “peace” goes on in an environment with varying degrees of “outside governance” (Angyal, 1941/1967) and perceived individual control (Ajzen, 2002)

Premises… Metaeconomic model:

Pursue the self-interest Pursue the other-interest Both interests are symbiotically

interdependent and nonseparable, joint Freedom to choose is also a matter of

choice; consumer sovereignty may legitimately be regulated due to failure in self-discipline to find the integrated balance in the interests

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IG

G

/

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Figure 1.Self-interest (G) indifference curvesfor a social good (e) and all other goods (d)

Social good (e)

All OtherGoods (d)

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Figure 2. Joint self-interest (G) and other-interest (M) indifference curvesfor a social good (e) and all other goods (d)

Social good (e)

All OtherGoods (d)

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Intersections: every decision represents bothinterests

= 0

Fig. 3. Ego-empathy frontier representing symbiotic balancing in the pursuit of the egoistic-hedonistic self-interest (IG) and the empathetic-altruistic other-interest (IM).

< 0

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dIG

dIM

= -

Other (empathetic)-interest (IM)

Self (egoistic)-interest (IG)

0

Z

dIG

dIG

dIM

dIM

Mathematical Metaeconomics Follows after Frisch (1965, Chp. 14 and

15), and “multi-ware production” concepts Recognizes inherent jointness and

nonseparability, limited substitutability in real world consumption and production processes

Need a mathematical as well as a qualitative metaeconomics in order to add precision, and meet the competition that is mathematical microeconomics

)(),()1( yIIV MG

),((2) 21 qqII GG ),()3( 21 qqII MM

222111)4( qpqpy

Joint interests functions look quite different:

Mathematical…

The budget constraint carries subjective elements on price:

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),,,,()9( 1221122 MG IIqppqq

),,,,()10( 221111 yIIppqq MGDemand function becomes:

Condition along an 0Z path:

112221 /)()11( pqpyq

],/)[(],,/)[()12( 211222211222 qpqpyIqpqpyIVV MG

),,,,()13( 2211 yppIIVV MG Interests frontier appears as:

dyy

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“Tradeoff” in the integrated balance emerges as:

“Symbiotic interdependence” and tradeoff emerges as:

Mathematical… Final Observation

Mathematical metaeconomics holds the potential to ultimately be an even more powerful analytical tool than is mathematical microeconomics

Default case is the standard microeconomics model when empirical testing shows no support for an “other-interest” and dual motives

The Case of Recycling Actual empirical measurement and

testing of metaeconomics (see Kalinowski et al., in review)

Telephone based, representative survey of the entire population in Nebraska, USA

Metaeconomics goes further than microeconomics in explaining the many anomalies and paradoxes in recycling behavior

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p'e/1

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G

/

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Figure 1.Self-interest (G) indifference curvesfor a recycle good (e) and all other goods (d)

Recycle good (e)

All OtherGoods (d)

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Figure 2. Joint self-interest (G) and other-interest (M) indifference curvesfor a recycle good (e) and all other goods (d)

Recycle good (e)

All OtherGoods (d)

///

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M

y/pe

B

y/pd

2

1

21

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Intersections like this one occur at every point in this space: The interests are joint, non-separable

TABLE 1General Tendencies and Trends Toward Recycling, Nebraska, 2002

Recycle Recycling Pay more for products madeItem now in 5-years with recycled materials

CumulativeModel type Logit Logit Logit TobitBehavior (0=no; (1 to 5 (0=no; (0=no; X=

1=yes) scale)i 1=yes) percent)k

Constant 0.1252 ns 0.7865 a -1.7039 a -0.9903 a

Jointness 0.0255 a 0.0211 a 0.0310 a 0.0157 a

Balance Squared -0.0593 a -0.0534 a -0.0386 b -0.0180 c

Income 0.0442 b 0.0239 a 0.0342 b 0.0175 c

Groupj 1.2545 c 0.7059 c 0.8863 d 0.5077 d

X Group -0.0490 a -0.0238 b -0.0376 b -0.0200 b

Predict 80.1% e 13.0% g 64.0% e 45.1%/45.7% f

Observations

at 0 105 -- h 267 267at 1, or X 437 535 260 225

Total 542 535 527 492

ap < 0.01; bp < 0.02; cp < 0.05; dp < 0.10

Metaeconomics References Lynne, G.D. “Divided Self Models of the

Socioeconomic Person: The Metaeconomics Approach.” Journal of Socio-Economics 28 (1999), 267-288.

Lynne, G.D. “Agricultural Industrialization: A Metaeconomics Look at the Metaphors by Which We Live.” Review of Agricultural Economics 24 (2002): 410-427.

Hayes, W.H. and G.D. Lynne. "A Centerpiece for Ecological Economics." Ecological Economics (in press, 2004).

Working papers (and this PowerPoint) available at: http://agecon.unl.edu/lynne/metaeconomics.htm