Volume 16, Issue 4 (2016)                   QJER 2016, 16(4): 149-167 | Back to browse issues page

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Heidari M R, Farahanifard S, Shaian Nejad N, Karimi Aminabadi E. Optimizing the Economic Behavior of Muslims Based On the Ethics of Belief in the Hereafter. QJER. 2016; 16 (4) :149-167
URL: http://ecor.modares.ac.ir/article-18-4037-en.html
1- Assistant Professor, Department of Economics, University of Isfahan
2- Associate Professor of Economics, University of Qom
3- M.A. in Islamic Economics
4- M.A. in Economics
Abstract:   (5056 Views)
Postulating perfect rationality and full information paves the way for neoclassic economics to explain the process of decision making through equalizing marginal units of variables based on optimizing the behavior of economic agents. This axiomatic approach results in eliminating any uncertainty from the analyses. This problem causes the marginal economics to neglect the issue of institutions. Moralities as a part of social institutions consist of specific rules and regulations, which have large effects on transactions and choices of economic agents, and determine the level of efficiency. This paper tries to develop a theoretical model for explaining the behavior of the economic agents of an Islamic society, which consists of specific and unique institutions. This research hypothesizes that morals in light of belief in the Hereafter eliminate the uncertainty of lack of experiencing the Hereafter and make optimization of economic agents possible. Two issues occur in a society in which the belief in the life after death is mixed with moralities. This paper tackles these two issues. The first one is the inter-world discount rate and the second is the marginal discounted cost (benefit) to the accumulated cost (benefit) ratio which is used as an index by economic agents in decision making process. The result implies that equilibrium condition is not efficient in orthodox economics regarding eternal reward and punishment system and its norms, and requires revision.
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Received: 2014/06/18 | Accepted: 2015/12/23 | Published: 2016/11/21

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