RichardFairchild12 karma2023-11-13 15:44:08 UTC
That is really interesting that 20 years ago, your Professor in an Environmental Economics class was of that view... for a long time, the prevailing view in economics was that of rational self-interest, maximising a very narrow payoff function.
More recently, behavioural economists are recognising these 'social preferences': the desire to think beyond the money, acting with fairness, empathy, ethicality, andf thinking of others... However, in my experience, I still come across the 'very rational' economics school, which says that people only act in self-interest. In fact, I recall a debate where a behavioural economist was saying: if people are so self-interested, why is there a lot of charitable giving? The "rational economist" answered, "well, they are getting satisfaction from giving to charity... include that in their utility function, and they are still maximising their own utility... it is still selfish!!" So, if you have utility for being ethical, and thinking of others, society etc... the rational economist's view was that is still selfish! And that is the fascination of an area like economics... the debates rage on!
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RichardFairchild7 karma2023-11-13 15:24:10 UTC
Thank you for such a good point.... yes: I have come across this in my research: Business leaders saying that they are doing great things for society, but not really (lip service), and living in great comfort with lots of personal wealth!
And a couple that I research with, who run a social investment consultancy... we have tested their motives... one of them is really interested intrinsically in doing great things for society, the environment etc... whereas the other one is running it to make money... a huge difference in attitude!
RichardFairchild6 karma2023-11-13 15:02:12 UTC
That is a fair enough question! In research, we never know all of the answers, and we are in a line of enquiry of trying to understand things. In my particular area, I am both researching the motives and incentives for investors, entrepreneurs and businesses to think beyond the money and invest (maybe at lower financial return) for societal good, and looking at ways that we can drive more societal behaviour. In addition to looking at the behavioural economics theories behind all of this, I am working with psychologists, and investment, entrepreneurial and business practitioners, to understand and motivate this. So, for example, one area that we are looking at: why people might be motivated to invest or act in business to think beyond the money, relates to an academic area that is grandly referred to as intrinsic or extrinsic motivation... this simply refers to social behaviour that is driven by the market/regulation etc (doing it because it looks good, captures customers and investors, the law says you have to)... this can lead to 'fake' behaviour/green- and impact-washing etc... Intrinsic motivation means that you do it because it is in your inherent conscience to be ethical, caring for society etc.. a huge difference in motives. We are testing for this... and interestingly found a mix of motives even among social investors... Then, understanding this mix, we can look at policies to change behaviour, nudge etc... Hope that answers your question?
RichardFairchild5 karma2023-11-13 15:47:34 UTC
Thank you all for your wonderful questions and comments today! I have really enjoyed talking to you all.. your questions have really got me thinking further about my research, and I hope that I answered all of your questions satisfactorily.
Bye for now... see you soon! :-)
RichardFairchild3 karma2023-11-13 15:31:27 UTC
Hi! Many thanks for your kind and encouraging comments! That is a very good question.
I think this is what my co-researchers and I are aiming towards... to quantify investor behaviour to be able to look at their motives to think beyond the financial returns. In the behavioural economics theories, we can develop payoff functions that include both their financial and their social impact motives. If we can then translate that to real world investors (where there would be a mix of investor types with different levels of social impact motivations), then we can both predict their investment behaviour, and aim to motivate more societal and impactful behaviour (maybe through nudge).. This would be a wonderful outcome of our research!
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