On utilitarianism vs virtue ethics as foundations of economic choice theory

On utilitarianism vs virtue ethics as foundations of economic choice theory Purpose – Economic choice theory is built on utilitarian foundations. The purpose of this paper is to explore whether a foundation of virtue ethics might be more consistent with human nature. Design/methodology/approach – The paper focuses on utilitarianism vs virtue ethics as foundations of economic choice theory. Findings – Economic choice theory describes consumer choice in terms that are inconsistent with findings from recent research in behavioral economics, neuroeconomics, and psychology. The consumers' dynamic optimization problem, as outlined by traditional theory, is unsolvable in the sense that it contains too many unknowns. This means that the consumer must approach the problem in a different manner than is usually suggested by the literature. Moreover, new psychological theories of well‐being suggest that we can, to some extent, choose what we want to want and that true happiness is based on our character as much as it is based on our consumption of goods. Practical implications – The idea that human choices may not be based on consistent preferences calls into question the policy suggestions of the literature on revealed preference and welfare economics. In particular, we cannot rely on past choices to draw inferences on people's preferences. Social implications – To maximize social welfare, society must value and promote the development of virtue and character. Originality/value – The paper highlights some of the differences between utilitarian and the virtue ethics perspectives on choice. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Humanomics Emerald Publishing

On utilitarianism vs virtue ethics as foundations of economic choice theory

Humanomics, Volume 27 (1): 17 – Feb 22, 2011

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0828-8666
D.O.I.
10.1108/08288661111110150
Publisher site
See Article on Publisher Site

Abstract

Purpose – Economic choice theory is built on utilitarian foundations. The purpose of this paper is to explore whether a foundation of virtue ethics might be more consistent with human nature. Design/methodology/approach – The paper focuses on utilitarianism vs virtue ethics as foundations of economic choice theory. Findings – Economic choice theory describes consumer choice in terms that are inconsistent with findings from recent research in behavioral economics, neuroeconomics, and psychology. The consumers' dynamic optimization problem, as outlined by traditional theory, is unsolvable in the sense that it contains too many unknowns. This means that the consumer must approach the problem in a different manner than is usually suggested by the literature. Moreover, new psychological theories of well‐being suggest that we can, to some extent, choose what we want to want and that true happiness is based on our character as much as it is based on our consumption of goods. Practical implications – The idea that human choices may not be based on consistent preferences calls into question the policy suggestions of the literature on revealed preference and welfare economics. In particular, we cannot rely on past choices to draw inferences on people's preferences. Social implications – To maximize social welfare, society must value and promote the development of virtue and character. Originality/value – The paper highlights some of the differences between utilitarian and the virtue ethics perspectives on choice.

Journal

HumanomicsEmerald Publishing

Published: Feb 22, 2011

Keywords: Ethics; Utilitarianism; Consumer behaviour; Economic theory

References

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