BECKER, Gary S., MURPHY, Kevin M. Social Economics - Market Behavior in a Social Environment.pdf

Social Economics
SOCIAL ECONOMICS
Market Behavior in a Social Environment
GARY S. BECKER
KEVIN M. MURPHY
THE BELKNAP PRESS OF HARVARD UNIVERSITY PRESS
CAMBRIDGE, MASSACHUSETTS, AND LONDON, ENGLAND
Copyright © 2000 by the President and Fellows of Harvard College
All rights reserved
Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Becker, Gary Stanley, 1930–
Social economics : market behavior in a social environment / Gary S. Becker,
Kevin M. Murphy.
p. cm.
Includes bibliographical references and index.
ISBN 0-674-00337-3 (cloth)
ISBN 0-674-01121-X (paper)
1. Economics—Sociological aspects. 2. Social interaction—Economic aspects.
I. Murphy, Kevin M. II. Title.
HM548 .B43 2000
—dc21 00-057895
To our late friend Jim Coleman,
who pioneered the integration of
social forces and rational choice
Contents
Acknowledgments ix
Part I The Effect of Social Capital on Market Behavior
1 The Importance of Social Interactions 3
2 Social Forces, Preferences, plementarity 8
3 Are Choices “Rational” When Social Capital Is Important? 22
Part II The Formation of Social Capital
4 Sorting by Marriage 29
5 Segregation and Integration in Neighborhoods 47
6 The Social Market for the Great Masters
and Other Collectibles 74
with William Landes
7 Social Markets and the Escalation of Quality:
The World of Veblen Revisited 84
with Edward Glaeser
8 Status and Inequality 105
with Iván Werning
Part III Fads, Fashions, and Norms
9 Fads and Fashion 133
viii / Contents
10 The Formation of Norms and Values 144
References 159
Author Index 165
Subject Index 167
Acknowledgments
We have received generous financial support for our research during
the past several years on the interaction between market behavior and
social forces. We especially want to acknowledge the support of the
National Institute for Child Health and Development (grant number
HD22054-11), the Olin Foundation gra