Economists studying intrafamily altruism have modelled it using a variety of methods, ranging from “warm glow”, multiple utilities and interdependent preferences, all of which have expanded the explanatory power of models in the field. Nowhere in economics is this of more concern than the economics of family, typified by interactions that are anything but anonymous and self-interested. It falls short, however, when dealing with behaviour outside this narrow band, especially interactions between persons who do not behave in a self-interested fashion towards each other. The standard assumption of homo economicus, an agent who maximizes his utility based on self-interested preferences and exogenous resource constraints, serves well for much anonymous market activity of consumers, investors and business managers. Mainstream economics has long struggled to model ethical behaviour, including what is perhaps its simplest type, altruism.
