Economic Exchange and
Socially Formed Motivations
The purpose of this section is to specify the relative significance of extrinsic or utilitarian and intrinsic or non-utilitarian motivations in economic exchange. Particular attention is paid to the salience of egoism and altruism in economic exchange. A key thesis is that exchange transactions are permeated not only by egoistic and other utilitarian elements but also by altruistic and related considerations. Hence, the relationship between egoism and altruism in economic exchange is far more complex than rational choice (utilitarian) conceptions suspect. A major problem in this regard is that both orthodox economics and the current rational choice model view the individual as a “ruthlessly selfish monad” (Frank 1996:117), at best as some kind of “Robinson Crusoe contracting with Friday” (Edgeworth 1967:28). Reportedly, neither egoistic nor altruistic considerations are exclusive in exchange but intermingled in various proportions, with many actors moving back and forth between altruism or generosity and selfishness (Palfrey and Prisbrey 1997:829).
In general, actors in economic exchange, as well as in other social relations, are guided both by extrinsic incentives and intrinsic motivation (Kreps 1997:359). The first is exemplified in utility/profit seeking by following the law of supply and demand and other economic laws, and the second, in altruism, warm glow, the sense of duty, and the like. For instance, some studies of individual behavior in NIMBY (not-in-mybackyard) situations report that civic-minded individuals “do not only further their own goals, but are prepared to bear some cost for the benefit