Different Aspects of Economic Decision Making for a Culturally Charged Economic Actor: A Review of Literature

Abstract

Economic principles are formulated with the assumption of a rational man, contrarily it is found that there are other factors such as emotions, values etc. which influence the economic judgments. The positive economics has failed to explain this behaviour. The economic theories are defined for a rational man who is influenced by economic factors like price, quantity etc. But in practice cultural factors do effect economic decisions. This area has long been neglected in making economic decisions. It is in this backdrop that we intend to explain the economic behaviour with respect to cultural factors. We have listed thirty-five variables which we can consider important in decision making. For each of these variables different action tendencies are defined based on literature review. An economic actor takes decisions considering one or several of the cultural variables mentioned. The action tendencies are the manifestation of the acts of an economic man to the outer world. We argue that the final action tendencies are combination of many and have genuine value orientation which can be rooted in cultural construct of the region. We endeavour to understand the decision made by a culturally charged Economic actor.

Keywords: Cultural Variables; Action Tendencies; Economic Actor; Subjective Well Being; Behavioural Economics

JEL Classification: A13, B52, I31