21 Epilogue: One Thing More…
Lindon Robison
Learning goals. After completing this chapter, you should be able to: (1) understand that, as humans, our needs include socio-emotional goods as well as those goods that can be purchased with money; and (2) that our needs motivate us to allocate resources to achieve both economic as well as socio-emotional goals.
Learning objectives. To achieve your learning goals, you should complete the following objectives:
- Learn the difference between “econs” and “humans”.
- Be reminded of the five distinct motives for pursuing a goal.
- Learn the difference between commodities and relational goods.
- Learn why humans exchange goods on terms and levels that econs view as irrational.
- Learn how including relational goods in our models explains exchanges that many econs would call irrational.
Introduction
The famous Beatles singing group titled one of their hit songs, “Can’t Buy Me Love.” While coming from an unlikely source of philosophical insight, their song title did proclaim an important truth: money can’t buy love nor most any other goods whose value depends on relationships. So, the purpose of this chapter is to remind us that relationships and the intangible goods produced in relationships may be our most important resources that need careful managing.
Econs versus humans. The behavioral economist Richard Thaler (2008) described two types of decision makers: “econs” and “humans.” Econs, according to Thaler, make decisions like persons described in graduate school economic textbooks. They are perfectly selfish, possess perfect information about the outcome of their choices, and their will power is absolute. Humans, on the other hand, fail to satisfy any of those assumptions. Their choices are influenced by relationships with other humans that lead them to unselfish choices. They lack complete information about the outcomes of their choices and about alternative choices. Finally, they sometimes overeat, drink too much, and also often don’t follow through on their choices.
Motives. A homework question at the end of Chapter 1 asked you what are your motives for wanting a college degree? The list of possible motives are reported below.
- I want a college degree so I can increase my lifetime earnings and get a better job.
- I want a college degree so important people in my life will be pleased with my achievements.
- I want a college degree to live up to the expectations I have for myself.
- I want a college degree so I will feel part of groups to which I want to belong.
- I want a college degree so that, in the future, I will be better able to help others.
An econ would have said that 100% of his or her motive was to increase lifetime earnings. Assuming your responses were not those of an econ, then you undoubtedly make decisions like a human. Your selection of motives can be used to infer that you care about and are motivated by other considerations than your desire to obtain a college degree to increase your p