Culture's Influence on Behavior
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What is the primary mechanism through which culture influences individual behavior?

  • The transmission of knowledge, values, and other behavioral factors from one generation to the next. (correct)
  • Direct enforcement of rules by authority figures.
  • Genetic predispositions that dictate social norms.
  • Economic incentives that encourage conformity to societal expectations.

How does the cultural filter, as mentioned in the passage, contribute to the continuity of informal constraints in society?

  • By providing a framework for encoding and interpreting information which carries past solutions to present exchange problems. (correct)
  • By creating a system of legal precedents that formalize past behaviors.
  • By promoting innovation and encouraging deviation from traditional practices.
  • By ensuring that all members of society have equal access to information.

What was Evans-Pritchard's main observation regarding the Nuer society, as highlighted by Robert Bates?

  • The Nuer were primarily motivated by external threats from neighboring tribes.
  • The Nuer were constantly engaged in internal conflicts and theft.
  • The Nuer relied heavily on a formal legal system to maintain order.
  • Despite the potential for disorder, the Nuer tended to live in relative harmony due to unwritten rules. (correct)

How does the passage connect the idea of cultural transmission with the functioning of the human brain?

<p>The brain learns through language, which codes for various types of information including perceptual, attitudinal, and moral aspects conveyed by culture. (B)</p> Signup and view all the answers

What is the crucial element that necessitates institutions to structure human interactions, as indicated in the text?

<p>Incomplete Information (B)</p> Signup and view all the answers

From what source do informal constraints originate?

<p>Socially Transmitted Information (B)</p> Signup and view all the answers

Based on the context, how does culture act as a 'language-based conceptual framework'?

<p>By providing a means of encoding and interpreting sensory information, influencing perceptions and behaviors. (C)</p> Signup and view all the answers

Which area of study does the text suggest can benefit from anthropological literature on stateless societies?

<p>Historical Work (D)</p> Signup and view all the answers

According to Bates' study of Kenya, what key factor influences the evolving institutional constraints during a society's transition to a market economy?

<p>The changing patterns of kinship ties within the context of political and economic conditions. (B)</p> Signup and view all the answers

What was the primary finding of Robert Ellickson's field study in Shasta County, California, regarding dispute resolution?

<p>Residents almost never resorted to legal redress, instead relying on informal constraints. (A)</p> Signup and view all the answers

Which of the following is NOT identified as a characteristic of informal constraints?

<p>Codified laws enforced by governmental bodies. (D)</p> Signup and view all the answers

According to Shepsle and Weingast's study, what primarily explains the power of congressional committees beyond formal rules?

<p>Informal, unwritten constraints evolved through repeated interaction. (A)</p> Signup and view all the answers

What does Axelrod's reference to Alexander Hamilton's reflections before his duel with Aaron Burr illustrate?

<p>A socially sanctioned norm of behavior. (C)</p> Signup and view all the answers

How do informal constraints relate to formal rules in a society?

<p>Informal constraints may extend, elaborate, or modify formal rules. (B)</p> Signup and view all the answers

What role do repeated human interactions play in the development of informal constraints?

<p>Repeated interactions give rise to the coordination, establishment, and enforcement of informal constraints. (D)</p> Signup and view all the answers

Which scenario best illustrates how informal constraints can modify formal rules?

<p>Congressional committees develop unwritten practices that influence legislative outcomes beyond what formal rules dictate. (C)</p> Signup and view all the answers

According to Howard Margolis's dual utility model, what primarily governs an individual's 'S preferences'?

<p>Strictly self-interest motivations. (B)</p> Signup and view all the answers

In Robert Sugden's argument, under what condition does a convention acquire moral force?

<p>When almost everyone follows it, and it benefits individuals if others follow it as well. (D)</p> Signup and view all the answers

What is a key role of the mind's information processing, according to the text?

<p>Establishing the foundations for institutions and shaping informal constraints. (A)</p> Signup and view all the answers

According to the chapter, how does culture influence informal constraints?

<p>By defining how individuals process and utilize information. (B)</p> Signup and view all the answers

What is stated about the impact of norms?

<p>Norms present unexplained problems in their evolution and disappearance. (A)</p> Signup and view all the answers

What is suggested about modeling wealth-maximizing norms?

<p>They can be modeled in a game-theoretic context. (C)</p> Signup and view all the answers

What is the 'morality of cooperation' as described by Sugden primarily based on?

<p>The expectation of reciprocal behavior within a community. (D)</p> Signup and view all the answers

In the context of decision-making, which of the following does the text suggest informal constraints primarily affect?

<p>The makeup of the choice set available to individuals. (C)</p> Signup and view all the answers

Which factor most significantly influences the incremental evolution of institutions, leading to path dependence?

<p>The cultural processing of information underlying informal constraints. (C)</p> Signup and view all the answers

What outcome typically arises from the tension between newly altered formal rules and the persistence of existing informal constraints?

<p>Outcomes with significant consequences for how economies evolve. (C)</p> Signup and view all the answers

How does the complexity of a society typically affect the formalization of constraints?

<p>It increases the rate of return to formalization, particularly with advancements in writing. (A)</p> Signup and view all the answers

What role has technological change played in the development of formal constraints?

<p>It has lowered measurement costs, encouraging standardized practices. (D)</p> Signup and view all the answers

How do formal rules generally interact with informal constraints in a society?

<p>Formal rules can enhance and reinforce the effectiveness of informal constraints. (A)</p> Signup and view all the answers

What is a key characteristic of cultural changes, as they relate to institutional frameworks?

<p>Cultural changes tend to be incremental, influencing institutions gradually. (A)</p> Signup and view all the answers

Which of the following best describes the price individuals pay for acting on their beliefs within institutional settings?

<p>Frequently very low, making convictions significant motivators. (A)</p> Signup and view all the answers

Along the continuum from informal to formal constraints, where would written constitutions typically be placed?

<p>At the formal end, symbolizing codified legal structures. (D)</p> Signup and view all the answers

According to the content, what is a crucial factor that significantly impacts transaction costs and the structuring of contracts?

<p>The structure of enforcement mechanisms and the degree of imperfection. (B)</p> Signup and view all the answers

What are the two primary reasons the content suggests that enforcement is typically imperfect?

<p>The costs of measuring multiple margins of contract performance, and the influence of agents' utility functions on outcomes. (D)</p> Signup and view all the answers

How does the content suggest parties to an exchange ensure that the exchange is worthwhile?

<p>By enforcing compliance at a transaction cost such that the exchange remains beneficial. (C)</p> Signup and view all the answers

According to the content, what is identified as a significant impediment to economic advancement, especially in underdeveloped countries?

<p>The inability of societies to develop effective, low-cost enforcement of contracts. (B)</p> Signup and view all the answers

What concept from previous chapters is extended to explore problems in the transfer of rights?

<p>Asymmetries of information held by principals and agents about the valuable attributes of what was being exchanged. (C)</p> Signup and view all the answers

What assumption does the content make about enforcement in discussions of transaction costs?

<p>Enforcement is either entirely perfect or constantly imperfect. (C)</p> Signup and view all the answers

What is the primary focus of the New Industrial Organization literature mentioned in the content?

<p>The evolution of organizational structures and governance to solve complex exchange problems. (C)</p> Signup and view all the answers

How does the content contrast its approach to transaction costs with Oliver Williamson's approach?

<p>By emphasizing enforcement as a critical element, a point of difference with Williamson's approach. (A)</p> Signup and view all the answers

According to William Riker, what is the central question regarding constitutional forms and liberty?

<p>Whether constitutional structure causes a political condition, or vice versa. (C)</p> Signup and view all the answers

What is the significance of 'the law that is written in the hearts of the people,' as contended by Rousseau and referenced by Riker?

<p>It suggests that societal values and public opinion are more fundamental than formal laws. (B)</p> Signup and view all the answers

What does the author suggest about the successful outcome of constitutional forms evolving in England in the seventeenth century?

<p>It resulted from a combination of formal and informal constraints. (D)</p> Signup and view all the answers

What are 'self-enforcing standards of conduct,' and why are they considered important?

<p>They are ethical norms and integrity that individuals adhere to, contributing to a successful society. (C)</p> Signup and view all the answers

What is the main concern of the author regarding the creation of self-enforcing constraints?

<p>The process by which such standards of conduct can be fostered and maintained. (A)</p> Signup and view all the answers

How does Vincent Ostrom's theory of the compound republic relate to Madison's solution in The Federalist Papers?

<p>Both suggest that appropriate constitutional forms can restrain the abuse of political power. (D)</p> Signup and view all the answers

What is the relationship between constitutional forms and public opinion?

<p>Public opinion often shapes constitutional structure, with the reverse being rare. (D)</p> Signup and view all the answers

What underlying assumption does Riker challenge in his critique of constitutional theory?

<p>That constitutional forms directly and consistently cause greater liberty. (C)</p> Signup and view all the answers

Flashcards

Informal Constraints

Socially transmitted information that is part of our heritage.

Culture

Transfer of knowledge, values, and behaviors from one generation to the next through teaching and imitation.

Cultural Filter

A language-based conceptual framework for encoding and interpreting information.

Brain's Ability to Learn

The ability of the brain to learn through structured natural languages.

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Expected Utility Model

A framework that explains human behavior based on rational choices, self-interest and maximizing benefits with imperfect information.

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Institutions

Structures or mechanisms that reduce uncertainty and help to coordinate human interactions.

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Cultural Filter Continuity

Continuity in informal solutions to exchange problems, carrying over from the past to the present.

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Order in Stateless Societies

Social cohesion in societies without formal governance, often maintained through shared norms and values.

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Dual Utility Model

Individuals have self-interest (S) and group-interest (G) preferences.

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Morality of Cooperation

A convention becomes a moral rule when almost everyone follows it, benefiting each individual.

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Culture and Information Processing

Culture shapes how individuals understand and use information.

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Conventions & Culture

Culture-specific, affecting how informal constraints are defined.

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Social Norms

Unwritten rules or expectations of behavior.

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Choice Set

The set of all possible choices an individual can make.

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Game Theory & Norms

Wealth-maximizing norms are analyzed using game theory.

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Informal Constraints Role

Informal constraints affect current choices and long-term societal evolution.

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Kinship Ties & Economic Transition

Patterns of kinship ties can shape institutional constraints during economic transitions.

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Ellickson's Shasta County Study

Study showing rural residents use informal constraints more than legal action.

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Relationship: Formal vs. Informal Rules

Informal constraints extend, elaborate, and modify formal rules.

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Socially Sanctioned Norms

Social norms that dictate or prohibit certain behaviors.

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Internally Enforced Standards

Standards of behavior individuals enforce on themselves.

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Informal Congressional Constraints

Unwritten rules that develop through repeated interactions and affect committee power.

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Hamilton's Duel Dilemma

Hamilton outlined reasons against dueling, despite social pressure.

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New Industrial Organization

Organizations evolve and governance structures emerge to solve complex exchange problems.

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Cultural Processing of Information

The cultural processing of information that underlies informal constraints plays a crucial role in how institutions evolve over time, leading to path dependence.

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Enforcement Imperfection

Enforcement isn't perfect or constantly imperfect; its structure impacts transaction costs and contract forms.

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Persistence of Informal Constraints

Informal constraints, being culturally derived, are slow to change even when formal rules are altered.

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Reasons for Imperfect Enforcement

The cost of measuring contract performance; Agents' self-interest influences enforcement outcomes.

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Tension Between Formal and Informal Rules

The tension between new formal rules and existing informal constraints affects how economies evolve.

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Information Asymmetry

Wealth-maximizing behavior affects exchange when information is asymmetric between parties.

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Formal Constraints Definition

Formal constraints are written rules, such as constitutions, at one end of the spectrum from unwritten traditions.

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Enforcement Cost

Parties must ensure compliance with costs that make the exchange worthwhile.

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Evolution Towards Formalization

Societies have generally moved from unwritten traditions towards written laws as they become more complex.

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Enforcement Importance

Effective, low-cost contract enforcement is crucial for economic advancement.

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Increasing Returns to Formalization

As societies become more complex, the benefits of formalizing constraints (through writing) increase.

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Considering Enforcement

Assuming enforcement is perfect or imperfect is not enough. You have to assess the mechanisms and the frequency and severity of imperfection.

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Complementary Nature of Rules

Formal rules can enhance the effectiveness of informal constraints.

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Imperfect enforcement consequences

Inability to develop effective, low-cost enforcement of contracts is the most important source of both historical stagnation and contemporary underdevelopment.

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Impact of Tech on Standardization

Technological change lowers measurement costs and encourages precise, standardized systems.

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Efficacy of Constitutional Forms

The idea that proper constitutional structures can limit the abuse of political power.

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Compound Republic

A structure of governance where power is distributed to prevent tyranny.

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Causality Dilemma (Constitutional)

The question of whether constitutional structure shapes public opinion, or vice versa.

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Honesty and Integrity (Judges)

Personal and professional honor influencing behavior.

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Self-Enforcing Standards

Voluntary adherence to standards of conduct.

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Mixture of Constraints

A mix of formal laws and informal social standards.

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Study Notes

  • People in all societies create constraints for structuring relations, helping reduce human interaction costs given limited information and computational abilities
  • Describing precise informal rules structuring interaction is harder than describing formal ones
  • Informal constraints defy neat specification and unambiguous significance tests, but remain important
  • The modern Western world views life through formal laws and property rights
  • Formal rules make up a small but important part of all constraints shaping choices
  • Daily interaction, whether within families, social relations, or business, are governed mostly by codes of conduct, norms, and conventions
  • Formal rules underlie these informal constraints, but aren't always obvious sources of choice in daily interactions
  • Informal constraints' importance is seen when constitutions imposed on different societies yield different outcomes
  • Discontinuous institutional change (revolution/military conquest) produces new outcomes
  • The persistence of society aspects despite total rule change is striking
  • Japanese culture survived the U.S. occupation after WWII
  • Post-revolutionary U.S. remained much as it had been in colonial times
  • Jews, Kurds, and other groups persisted through centuries of formal status changes
  • The Russian Revolution, despite its immense scale, cannot be understood without considering surviving informal constraints
  • Informal constraints derive from socially transmitted information, a heritage known as culture
  • The mind processes information based on its programming with structured natural languages that code for perceptual, attitudinal, moral, and factual knowledge
  • Culture is the transmission of knowledge, values, and behavior-influencing factors from one generation to the next, via teaching and imitation
  • Culture offers a language-based framework for encoding and interpreting sensory information

Human interaction without formal rules in stateless societies

  • Anthropological literature offers extensive controversial findings
  • It is important for historical work, order analysis in primitive societies, and implications for understanding informal restraints
  • Evans-Pritchard observed that the Nuer tended to live in relative harmony despite the potential for theft and disorder
  • The Nuer avoided harmful effects from self-interest pursuit, even without formal institutions like courts and police

Institutions in Primitive societies in tribes with no state or formal rules

  • Bates describes deterring effects from compensation, and feud threats for preserving order
  • This cooperative solution makes sense in game theoretic terms
  • Avoiding a one-shot prisoner's dilemma, an iterated game is played, where feud threats incentivize parties to preserve order, discouraging interfamily cattle raiding
  • Family members prevent raiding because a feud would harm all
  • Extensive anthropological literature clarifies that exchange in tribal societies is not simple
  • Dense social networks create stable informal structures when states and formal rules are absent
  • Communities like the Tonga operate with rules defining appropriate action, limiting conflict by defining expectations
  • Rules reduce ambiguity, allowing individuals to prioritize legitimately

Informal constraints

  • Order arises from dense social networks, mutual understanding, and the threat of violence
  • Deviant behavior is intolerable because it undermines tribal group stability and insurance
  • Richard Posner's primitive society model explains many institutional features in such communities
  • High information costs, ineffective government, limited resources, and little innovation lead to weak government, family-based rights and duties, gift-giving, strict liability for injuries, generosity/honor emphasis, and collective guilt
  • Posner emphasizes kinship as central to insurance, protection, and law enforcement
  • Bates' Kenya study focuses on shifting kinship patterns amid changing political/economic conditions as key to understanding evolving institutional constraints when societies change

Pervasiveness of Informal Constraints

  • Informal constraints are features of modern economies
  • Robert Ellickson studied how rural residents in Shasta County, California, resolve trespass damage from stray livestock
  • He found that residents rarely use legal redress; instead, they rely on informal constraints
  • Casual introspection suggests informal constraints are pervasive
  • Informal constraints coordinate repeated human interaction: extensions/modifications of formal rules, socially sanctioned norms, and internally enforced standards

Evidence of informal constraints

  • Shepsle and Weingast's study shows that congressional committee power, unexplained by formal rules, stems from unwritten constraints evolved through repeated interaction
  • These constraints arose from formal rules to address exchange problems, becoming recognized institutional constraints without being formalized
  • Committees thereby influence legislative choices beyond formal structures

Examples of Informal Constraints

  • Robert Axelrod illustrated a socially sanctioned behavior norm
  • Alexander Hamilton, before his duel with Aaron Burr, listed reasons to avoid it, including the risk of death
  • Despite rational reasons, Hamilton felt rejecting would diminish public effectiveness, as dueling was the accepted way for gentlemen to settle disputes
  • Social norms, not formal rules determined the choice

Limitations of existing models for describing internal codes of conduct

  • Both previous examples can be modeled as wealth-maximizing models within neoclassical frameworks
  • However, internally enforced codes of conduct derive meaning from informal constraints
  • Altering choices occur when people sacrifice wealth/income for other values
  • Essays show legislative voting cannot be explained by interest groups faithfully mirroring constituent interests but must consider subjective personal legislator preferences
  • Evidence shows that lower prices for ideas, ideologies, and convictions make them more influential

Emergence and Persistence of Informal Constraints: conventions that solve coordination problems

  • Conventions are rules never consciously designed but are in everyone's interest, like rules of the road
  • Characteristically, both parties minimize measurement costliness with self-enforcing exchange
  • Conventions solving coordination problems account for a large proportion of total economy-transacting costs
  • Informal constraints arising in exchange contexts but not self-enforcing entail features reducing measurement/enforcement costs
  • Without constraints, asymmetric information and related gains distribution prompt excessive measurement resources or render exchange impossible due to unenforceability
  • Informal constraints can take the form of agreed-upon low-cost measurement (standardized weights/measures)
  • Enforcement requires second/third-party effectiveness via sanctioning or information networks sharing third-party exchange performance information (credit ratings, Better Business Bureaus)
  • These organizations/instruments making cooperative norms effective are a major part of complex exchange history and parallel game theoretic models which produce cooperative outcomes by changing discount rates/increasing information
  • Complex exchange growth in later medieval/early modern Europe was facilitated by informal institutions like early law merchant publicized codes of merchant conduct
  • Current prices and auditing/accounting lowered critical (measurable) information/enforcement expense
  • The game-theoretic frame work raised cooperative options or raised cost of defection

Internally Enforced Codes of Conduct

  • Maximizing informal constraints includes codes modifying behavior
  • This is hard because one must model choices based on trade-offs between wealth and other values
  • Religious beliefs or dedication to communism offer data on individual sacrifices for beliefs
  • Experiments show individuals do not always free-ride, and the study provides both evidence and a behavior model

Motivation and Behavior

  • Human behavior is more complex than the simple predicted utility model
  • Chapter 3 noted honesty, integrity, and reputation have worth in wealth-maximizing terms
  • Unexplained is the large residual
  • No proven theory accounts for effective/ineffective ideologies, or choices made when payoffs to honesty, integrity, hard work, or voting are negative

Two partial explanations

  • Howard Margolis's dual utility model and Robert Sugden's convention argument gain moral force
  • Margolis claims individuals have two utility functions: S preferences (self-interest) and G preferences (social/group interest)
  • Sugden believes conventions gain moral force if almost everyone follows them and each individual benefits when others follow the rule
  • It evolves with the morality of cooperation

Conclusions

  • Mental information processing underlies institutions and the way informal constraints shape the choice set
  • Culture defines how individuals use information, affecting informal constraint specification
  • Like norms, conventions are culture-specific

Persistence and Evolution

  • Unexplained, for example, how norms become norms, and why they evolve or disappear
  • Wealth-maximizing norms can be modeled in a game theoretic context
  • Empirical study can reveal what informal constraints are most likely to produce cooperative behavior, or how incremental changes in such alter the game toward increasing/decreasing cooperative outcomes This leads to increases in our knowledge on developing complex exchanging forms
  • The way in which contracts are written or the costs of transacting show indirect changes relating to constraints
  • Transaction cost framework offers promise for exploring constraints
  • The decline in Dutch (seventeenth century) and English capital markets (early eighteenth century) shows increasing security of property rights due to both formal and informal institutional constraints
  • Enforcing contracts from merchant codes included ostracizing violators and eventually codifying practices in formal law
  • Self-imposed codes of conduct are important in constraining behavior
  • Despite lacking understanding of its source, its impact is measurable by examining marginal changes to express convictions

Additional Information

  • Such analysis explains the power of subjective views in decisions
  • If the demand function is negatively sloped, the lower the cost of expressing beliefs, the more important they are as determinants of choice
  • Formal institutions such as courts, hierarchies that include slack in the agent - principal relationship in legislatures make it easier for people to have little cost of the preferences

Limitations of current research

  • No one knows what determines the value of convictions
  • The function is negatively sloped, and the price for acting on one's convictions is low
  • Informal constraints, affected by culture, play a key role in how institutions evolve in the long run, causing path dependence
  • Neat models for culture evolution are still absent, but cultural traits are tenaciously consistent, and cultural changes are incremental
  • Informal constraints that stem from culture do not react at once to formal rule changes Tension between altered formal rules and persistent informal constraints affects how economies evolve

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Explore how culture shapes individual behavior through various mechanisms. Understand the role of the cultural filter in maintaining informal constraints. Discover Evans-Pritchard's observations on the Nuer society and the connection between cultural transmission and brain function.

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