Opening-up the objective function: choice behavior and economic and non-economic variables—core and marginal altruism
Morris Altman ()
Economics Bulletin, 2006, vol. 4, issue 33, 1-7
A revised model of the preference function is presented incorporating utility maximizing acts of material self-sacrifice. This model incorporates neoclassical and behavioral arguments, allowing for the stylized fact that economic agents are motivated by both material and non-material incentives. Given such a preference function, choice behavior is modeled as a function of relative opportunity costs (price) and real income. Preferences are determined by a variety of variables inclusive of social capital and education. There is therefore a core preference based upon non-economic variables and a ‘marginal' component which is a function of conventional economic variables. The relative importance of these two components in determinating choice behavior is an empirical question. Building upon conventional tools, a demand curve for moral acts is derived and underlying income and substitution effects discussed. Empirical evidence from the tipping literature is used to illustrate the model.
JEL-codes: D0 B4 (search for similar items in EconPapers)
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