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In the midst of global recession, angry citizens and media pundits often offer simplistic theories about how bad decisions lead to crises. Many economists, however, base their analyses on rational choice theory, which assumes that decisions are made by well-informed, intelligent people who weigh risks, costs, and benefits. Taking a more realistic approach, the field of anthropology carefully looks at the underlying causes of choices at different times and places.

Using case studies of choices by farmers, artisans, and bureaucrats drawn from Michael Chibnik's research in Mexico, Peru,...

Since the mid-1980s, whimsical, brightly colored wood carvings from the Mexican state of Oaxaca have found their way into gift shops and private homes across the United States and Europe, as Western consumers seek to connect with the authenticity and tradition represented by indigenous folk arts. Ironically, however, the Oaxacan wood carvings are not a traditional folk art. Invented in the mid-twentieth century by non-Indian Mexican artisans for the tourist market, their appeal flows as much from intercultural miscommunication as from their intrinsic artistic merit.

In this...