May 27, 2018 in Economics

Incorporating Theory Of Relational Goods Into The Economics

Economics sphere is always a controversial topic to discuss that even a sociology, which is closely  related to science can not deny such a fact that so called rational actions participate in concerning not only particular ideology, but more deeper in psychological motives, which are reflected in daily life, politics, culture, science and even economics which is  a vital aspect of the society's existence. The following theory describes rational action by giving more realistic assumptions about human's motives and objectives which are called “relational goods”(Unhaler, 1989, p.253).

It also describes possible conditions and circumstances under which people act in a particular way. It is obvious that there exist a lot of rational choice's models which all make sense, but in contrast they do not consider extraindividual characteristics which can not be acquired by isolated individual.

As a result, these motives or “relational goods ” obtain a functioning position in relationships between individuals. Relational goods can be  achieved only by agreement with the other individuals and with to proof of a particular “joint actions”. In other words,  relational goods can be enjoyed only by sharing them with someone else. They are not similar to personal (which can be enjoyed alone) and public (can be enjoyed by any number of people). According to public goods, the enjoyment ofother’s individual is not increasing and “relational goods” theory works vice versa: by a person's consumption the  consumption of it by another particular person or group is increased.

One object  may obtain as well relational and non-relational goods

To be more precise by consuming some physical object one person leaves less of this object to another person, but social pleasure means that this object is used by both people without taking into consideration equality of consumption (Unhaler, 1989, p.253).

Taking into account everything described above this theory can be used in economics. It is obviously seen that interpersonal relations outside the economic sphere can greatly affect economic performance. In fact, the separation of production from consumption and making consumption less collective diminishes profits by making the product less enjoyable ( Benedetto & Robert, 2005, p.7). A particular product could give more satisfaction by group consumption as a result it leads to more  public attention to it. Moreover, the level of content by a group of people is supposed to be higher than the personal one  (Bruni & Porta,  2007, p.242).

To sum up, it is important to emphasize that relational goods theory  works in daily routine life and as it was previously mentioned the informal life can affect the economics sphere because of subjective consuming is natural to  people.  

References

  1. Bruni L. & Porta P.L. (2007) Handbook on the Economics of Happiness. Northampton, MA:  Edward Elgar Publishing, Inc.
  2. Gui Benedetto & Sugden Robert (2005). Economics and Social Interaction: Accounting for Interpersonal Relations. New York, NY: Cambridge University Press. Print
  3. Unhaler C. J. (1989) Public Choice. Netherlands: Kluwer Academic Publishers
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