Motivational needs and interdependent utilities

Throughout the history of economic thought, various images of human beings have existed although the motivational and behavioral assumptions underlying them and even the images themselves have not always been made explicit. The most prevalent image of man has been that of the economic man, but this prototype deals only with people or their goods. Welfare analysis based on the economic man prototype is of little help in explaining the observed phenomena of individuals engaging in philanthropic activities. This article incorporates empirically derived motivational variables into economic analysis in order to explain better human economic behavior and to provide economic models with greater explanatory power, especially with regard to altrusitic and selfish behavior. The individual's patterns are incorporated into his/her utility function, and an analysis is made of the optimal level of transfers when various personality types interact.