4 - The exercise of power as economic behavior
Published online by Cambridge University Press: 18 September 2009
Summary
Human behavior is not compartmentalized, sometimes based on maximizing, sometimes not, sometimes motivated by stable preferences, sometimes by volatile ones, sometimes resulting in an optimal accumulation of information, sometimes not. Rather all human behavior can be viewed as involving participants who maximize their utility from a stable set of preferences and accumulate an optimal amount of information and other inputs in a variety of markets.
Gary Becker, The Economic Approach to Human BehaviorBecker's maximizers could be assumed to live quietly offstage in isolated, soundproof booths. They could emerge solely to consumate a market exchange, retreating quickly and avoiding all other forms of human interaction. They could. But if the model is to be consistent, they would do so only when maximizing behavior itself so dictates. If and when the payoffs justify it, such persons must place the moment of exchange into a larger context of social interaction. In short, maximizing behavior may require the exercise of many forms of power.
Simple economic power is undoubtedly common. It will, however, be the exclusive form of human interaction relevant to markets if and only if, at all times and in all situations, all other forms of power are always clearly inferior as measured by net gains to potential exercisers.
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- Information
- Economics and PowerAn Inquiry into Human Relations and Markets, pp. 48 - 70Publisher: Cambridge University PressPrint publication year: 1989