M1 Isolated decision vs socially embedded decision

Topic

The starting point remains the individual, represented as a generalized actor who makes choices—regarding consumption, labor supply, savings, migration, childbearing, trust, or participation in collective action—based on a cost-benefit decision function applied to the set of options presented by the context. This cost-benefit decision function relies on a vector of personal characteristics, while resource constraints limit the individual to choosing from a bounded subset of those options.

At least two terms compete within this decision function: one based on private cost-benefit considerations—anchored to the individual's own characteristics and resource constraints—and another based on social coupling. Because these two terms compete within the same function, their relative weight determines how the individual decides in any given instance.

When the weight of the social coupling term is low, the decision is anchored almost entirely to the individual's own characteristics and resource constraints, with the actions of others playing no significant role; this constitutes an isolated decision.

Conversely, when the weight of the social coupling term is high, control over the decision shifts toward what the individual perceives others have already done or expects them to do, overriding their own characteristics and resource constraints; this constitutes a socially embedded decision.

This socially embedded decision does not always take the same form. If the individual's choice set is reduced to a single binary alternative—such as whether or not to join a collective action—the socially embedded decision manifests as the specific case described by Granovetter’s classic threshold model; Conversely, maintaining the individual's choice set across a broader range of options allows that same socially embedded decision to be expressed continuously, rather than being reduced to a single alternative.

Thus, distinguishing between these two modes—for any decision an individual makes (consuming, working, saving, migrating, having children, trusting, joining a collective action)—helps determine whether that decision is primarily explained by the individual's own vector of characteristics and resource constraints (i.e., an isolated decision) or by the growing weight of their perceptions regarding others (i.e., a socially embedded decision); and, in the latter case, whether that social influence operates on a single binary alternative or continuously across the entire choice set.

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