Arguing about Tastes - (Kenneth J. Arrow Lecture) by David Kreps (Paperback)

About the Book

Arguing About Tastes makes the case that economists should abandon the principle that preferences are fixed and instead incorporate into their work how context and experience shape individual tastes.

Book Synopsis

Mainstream economics considers individual preferences to be fixed and unchanging. Although psychologists and other social scientists explore how tastes are formed, influenced, and evolve, it is not considered "proper" in orthodox economics to do so. Arguing About Tastes makes the case that economists should abandon the principle that preferences are fixed and instead incorporate into their work how context and experience shape individual tastes.

David M. Kreps argues that the discipline must account for dynamic personal tastes when it comes to understanding social exchange, emphasizing human resource management and on-the-job behavior. He develops formal models that illustrate the power of intrinsic motivation and show why applying extrinsic incentives can be counterproductive. Kreps weighs the advantages and disadvantages of the principle de gustibus non est disputandum: there is no arguing about tastes. He calls for a new era of economics in which preferences are taken into account--and not for granted.

Arguing About Tastes concludes with responses by the distinguished economists Alessandra Casella and Joseph E. Stiglitz and a final reply by Kreps.

Review Quotes

David Kreps' Arguing About Tastes masterfully delves into the concept of endogeneity of tastes. He takes his readers on an insightful journey that challenges conventional wisdom with refreshing perspective on the dynamic forces that shape our choices.--George Akerlof, Nobel Laureate in Economics, 2001

Had I been paid to compose this blurb, would I have spent more time and effort trying to perfect it, or less? In this provocative book, David Kreps, with a long-term agenda of creating realistic models of individual behavior for economic analysis, shows why this question matters for economics along with a rich analysis of possible answers.--Bengt Holmström, Nobel Laureate in Economics, 2016

Kreps, a brilliant economic theorist, shows how to bring intrinsic motivation, self-perception, and identity into thinking about contracts and organization. A persuasive argument for why intrinsic motives and identity should be part of economic modeling.--Colin Camerer, California Institute of Technology

David Kreps has made monumental contributions to economic theory, which takes stable preferences as a fundamental assumption. In this incredibly insightful book, he argues and formally shows how context--from people's identity and self-perception, to their decision environment--plays a critical role in shaping and changing preferences. I recommend this book to anyone who is interested in what is coming next in economics.--Alex Imas, University of Chicago Booth School of Business

Arrow and Debreu told us where to go to see how reality differs from perfect markets; Kreps's book tells us how to get there by mapping out a clear route to the place where preferences are formed.--Oriana Bandiera, The London School of Economics

Should economists deal with tastes? Or should de gustibus non est disputandum continue to reign? In Arguing About Tastes, David Kreps compellingly argues that it is time to pay attention to the formation and transformation of tastes to increase the realism and scope of economic theory. A nuanced, critical, and eye-opening book.--Gerd Gigerenzer, Max Planck Institute for Human Development

Arguing About Tastes is a bold venture into scantily charted territory in microeconomics - the land of endogenous preferences - but I can think of no better guide than David Kreps. Professor Kreps brings energy, humor and joy to the theory-building work that make this book a pleasure to read.--Matthew Nagler, The Graduate Center, CUNY

About the Author

David M. Kreps is the Adams Distinguished Professor of Management and Economics Emeritus at Stanford University's Graduate School of Business. He is a leading economic theorist whose contributions span areas including choice theory, financial markets, and game theory. Among his many books are Game Theory and Economic Modeling (1990), Microeconomics for Managers (second edition, 2019), and Microeconomic Foundations I and II (2012, 2023). Kreps has received honors including the John Bates Clark Medal, the John J. Carty Award for the Advancement of Science, the Erwin Plein Nemmers Prize in Economics, and the CME Group-MSRI Prize in Innovative Quantitative Applications.

Alessandra Casella is professor of economics and political science at Columbia University, where she codirects the Institute for Social and Economic Research and Policy.

Joseph E. Stiglitz is University Professor at Columbia University and a recipient of the Nobel Memorial Prize in Economic Sciences.