akerlof's presidential address

The desire to be a person in his own right, to be noticed in the world he lives in, is shared by each of the men on the streetcorner. Whether they articulate this desire … or not, one can see them position themselves to catch the attention of their fellows in much the same way as plants bend to catch the sunlight. (Liebow, 1967, pp. 60–1) - cited in Oxoby 2004.

Akerlof's presidential address to the AEA is below
here

He talks about five "neutrality results" that emerged from the classical critique of Keynes: (i) consumption and current income are independent (ii) investment and finance decisions are independent (iii) Ricardian equivalence (iv) inflation stability only at the natural rate of unemployment (v) failure of macro-stabilisation policy under rational expectations. He argues that all five results break down in the presence of social norms with regard to the workings of the system. The paper invokes identity theory, sociology of the corporation and other anthropological and sociological accounts of different economic units to explain how standard neutrality results break down.

It is interesting to reflect how pride, initiation, evvy, social status, sense of belonging, group identity, obedience, prejudice, snobbery and all of these other things are generating the results we are finding in our studies on education and health. More generally, it would be interesting to talk about the rate of time preference and future orientated behaviour with regard to this. Akerlofs work on obedience and procrastination is interesting in this regard. He also has a paper with Rachel Kranton "Identity and Schooling: Some Lessons for the Economics of Education" in the Journal of Economic Literature that brings in some of these insights in Education. Im currently reading his paper "Men without Children" for some thoughts on the alcohol work. A full list of his papers is below:

http://ideas.repec.org/e/pak7.html

We already talked about Benabou and Tirole's work on identity. Also, the IZA group are doing interesting work on identity, cognitive dissonance and incentives.

Ernst Fehr is doing some work on the costs of incentives that is interesting. http://www.iew.unizh.ch/home/fehr/

Armin Falk looks, in one paper, at how "efficient" surveillance mechanisms reduce employee motivation.

ftp://ftp.iza.org/dps/dp1203.pdf

The original cognitive dissonance experiments of Festinger showed that people who were being paid to perform meaningless tasks did not internalise any positive aspects of them, whereas those who were not being paid or only being paid a small amount "tricked themselves" in to believing that the tasks were worthwhile. Oxoby applies a similar insight to look at how people drop out of society

http://www.blackwell-synergy.com/doi/pdf/10.1111/j.1468-0297.2004.00241.x

The first paragraph in the conclusion is key:


"Although economists have paid attention to the role of social comparisons and the interdependence of utility, little attention has been paid to the ways in which individuals make these comparisons. In particular, existing theory assumes individuals agree on the metric that determines relative standing in society. However, research in psychology has demonstrated that the indices individuals use tomcompare themselves change, and change in systematic ways."

Ken teaches a course on the social self in Trinity. It would be really worthwhile to give a shortened version of that here in Geary with a view to translating some of the key findings in to "econo-speak".