Aggregating: Humans Are Social Animals

Maurizio Bovi ()

Chapter 4 in Why and How Humans Trade, Predict, Aggregate, and Innovate, 2022, pp 81-119 from Springer

Abstract: Abstract Bovi scrutinizes human aggregations (family, firms, cities, etc.), underlining that if aggregating generates various kinds of gains, multifaceted behavior generates tensions within and between social clusters. For instance, if family offers insurance and risk pooling, divorce is not infrequent; if firms are more effective producers than families, principal-agent disputes arise. The chapter also examines several intersections of human aggregations and economic system. If the system provides insurance markets, social safety nets, etc., it becomes a strong competitor of families; but families are key in socializing children. If system complexity raises transaction costs, humans organize firms to accomplish these costs. But firms need formal institutions which, in turn, makes the system even more complex. Communities can then avoid the tragedy of the commons via self-governance.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-93885-7_4

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DOI: 10.1007/978-3-030-93885-7_4

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