On Virtue Economics

Abstract

This chapter makes a case for economists taking account of agent virtue in their models, on the grounds that doing so both broadens the normative base that economists standardly deploy and adds explanatory power in many settings of interest to economists. After distinguishing three different ways in which virtue might be included in economic analysis—virtue as intrinsically valuable, virtue as derivatively valuable, and virtue as fact—we examine the relevance of virtue to three topics: invisible hand mechanisms, the role of esteem in individual motivations, and the use of selection and allocation mechanisms in institutional design. We try to explain why each of these topics is relevant to the study of virtue.