SOCIOL Final Flashcards Chapter 9.3-9.5
Behavioral economics
Theories about economic behavior based on psychological research on how our brains process information
Economic sociology
The subfield of sociology that applies sociological theories to study economic behavior.
What have studies shown about human responses to the idea of scarcity ?
Study after study shows that people are consistently willing to pay more to buy a consumer product or service if they think it is scarce and hard to obtain (whether it really is or not)
Loss aversion
the idea that individuals place greater value on keeping what they have as opposed to giving something up to get something new
Embeddedness
Embededness captures the idea that the individuals and firms doing things in those markets (such as buying, selling, and producing) are also embedded in their society and its social influences.
Altruism
Our concerns for others and what they think about us
Norms
Factors guiding our actions in many different settings
The ultimatum game
A social experiment in which one player in a two-player game is given a sum of money and can offer any amount of it to the second player. If the second player accepts the offer, they will receive whatever they agreed to and the first player will keep the rest. If the second player rejects the offer, neither party receives anything.
What were the results of the ultimatum game ?
Individuals are far more influenced by altruism and not just focused on their own self-interest; The typical offer among college students when they are player A is at or just below $5 (or 50percent of whatever amount is at stake in the game). Similarly, player B typically insists close to half of the amount (or $5 in our example).
The Matthew Effect
The idea that those who are already privileged are likely to become even more so over time, while those who are not are much less likely to achieve success.
What is an example of the matthew effect?
Large retailers like Amazon or Walmart can compel suppliers to charge them lower prices than a small neighborhood store can. This in turn allows those companies to charge lower prices to consumers than the neighborhood store, which can put it out of business.
Trust
The belief that another person with whom you might interact will not cause you harm even though he or she may be in a position to do so.
The McDonaldization of Society
Ritzer argued that in the modern world people are more likely to choose name brands they feel they can trust, so rather than trying something new they default to the product that they know; it is the idea of standardization.
How do we facilitate trust ?
Regulations and enforcement; For example, if person A rents an apartment to person B, and B fails to pay the rent or damages the apartment, A has recourse of using local courts and police to evict B.
What did Mark Granovetter find ?
Studying how people found jobs in the Boston area in the early 1970s, Granovetter interestingly discovered that it wasn’t someone’s primary connections (the people whom one knows personally) but rather second-degree connections—friends of friends—who were most helpful for securing new jobs.
