Rationality, Institutions and Economic Methodology (Economics As Social Theory)

BOOK COVER......Page 1
HALF-TITLE......Page 2
TITLE......Page 4
COPYRIGHT......Page 5
CONTENTS......Page 6
CONTRIBUTORS......Page 8
PREFACE......Page 9
Part I INTRODUCTION......Page 12
ECONOMIC METHODOLOGY AND THE INSTITUTIONALIST REVIVAL......Page 13
VARIETIES OF INSTITUTIONALIST ECONOMICS......Page 19
INSTITUTIONS, RATIONALITY AND EXPLANATION......Page 22
THEORETICITY AND AD HOCNESS......Page 29
STORYTELLING......Page 33
INDIVIDUALISM AND HOLISM......Page 35
ISSUES OF ISOLATION......Page 37
THE CONTRIBUTIONS......Page 40
NOTES......Page 46
REFERENCES......Page 49
Part II APPROACHES TO ECONOMIC METHODOLOGY......Page 54
DOES METHODOLOGY MATTER?......Page 55
C. Methodological debates between opposing research traditions in economics are sterile: they never reach any conclusive results......Page 56
Problem 1......Page 57
B’—Rebutting the second objection......Page 58
C’—Rebutting the third objection......Page 59
E’—Rebutting the fifth objection......Page 60
Philosophical foundations......Page 62
Anti-philosophical foundations......Page 64
The rationality assumption......Page 65
Prediction......Page 67
Ethics and economics......Page 68
REFERENCES......Page 69
INTRODUCTION......Page 72
FALSIFICATIONISM......Page 73
LAKATOS’S METHODOLOGY OF SCIENTIFIC RESEARCH PROGRAMMES......Page 77
CONCLUSION......Page 80
NOTES......Page 81
REFERENCES......Page 83
INTRODUCTION......Page 87
THE RATIONAL AND THE SOCIAL......Page 88
FROM UNDER-DETERMINATION BY DATA TO SOCIAL CONDITIONING......Page 90
‘SCIENCE IS SOCIALLY CONDITIONED’......Page 92
THE EXPLANANDUM......Page 94
PURSUIT OF SOCIAL GOALS IN A MARKET......Page 96
THE ROLE OF RHETORICAL CONVENTIONS IN JUSTIFICATION......Page 103
SOCIAL CAUSATION OF THE CONTENTS OF BELIEFS......Page 112
LESSONS AND FURTHER ISSUES......Page 116
NOTES......Page 118
REFERENCES......Page 119
Part III BROADENING THE NOTION OF RATIONALITY......Page 122
ABSTRACT......Page 123
BEHAVIOURAL ASSUMPTIONS IN ECONOMIC THEORY......Page 124
SITUATIONAL LOGIC AND BEHAVIOURALISM......Page 128
OPTIMIZATION, RULE-FOLLOWING, AND SITUATIONAL LOGIC......Page 131
1’ Optimization as behaviouralism......Page 132
2’ Rule-following as situational logic......Page 133
METHODOLOGICAL ARGUMENTS FOR AND AGAINST SITUATIONAL LOGIC......Page 134
THE EXPLANATORY IMPORT OF SITUATIONAL LOGIC......Page 136
NOTES......Page 138
REFERENCES......Page 141
INTRODUCTION......Page 144
THE ROLE OF CONCEPTUAL PROBLEMS IN THE DEVELOPMENT OF ECONOMICS......Page 147
INDIVIDUAL RATIONALITY, CALCULATION COSTS, AND THE PROBLEM OF SELF-REFERENCE......Page 152
PERFECT RATIONALITY, EQUILIBRIUM, AND SELF-REFERENCE......Page 155
The problem of self-reference and unconscious, indirect and parametric interaction......Page 159
The problem of self-reference and indirect functional interaction: from Cournot to the theory of rational expectations......Page 161
The problem of self-reference within non-cooperative game theory: can rationality be common knowledge?......Page 166
CONCLUDING REMARKS......Page 172
NOTES......Page 173
REFERENCES......Page 180
INTRODUCTION......Page 184
1 ECONOMIC ORTHODOXY AND THE ISSUE OF RULE-FOLLOWING BEHAVIOUR......Page 185
2 CASE-BY-CASE MAXIMIZATION, RULE-FOLLOWING AND RECURRENT PROBLEMS......Page 188
3 THE RATIONALITY OF RULE-FOLLOWING......Page 190
4 ADAPTIVE RATIONALITY AND PROGRAMMED BEHAVIOUR......Page 192
5 RULE-FOLLOWING AND THE LIMITS OF REASON......Page 194
6 THE MAXIMIZATION PARADIGM AND THE ‘REALISM’ ISSUE......Page 196
7 RATIONAL CHOICE THEORY AND TELEOLOGICAL EXPLANATION......Page 197
8 A THEORY OF ADAPTIVE RATIONALITY: EVOLUTIONARY EPISTEMOLOGY......Page 198
9 ADAPTIVE RATIONALITY AND BEHAVIOURAL LEARNING......Page 201
10 INDIVIDUAL ROUTINES AND SOCIAL INSTITUTIONS......Page 202
11 CONCLUSION: EQUILIBRIUM ANALYSIS OR PROCESS THEORY......Page 205
NOTES......Page 207
REFERENCES......Page 212
Part IV INSTITUTIONS AND THEIR EVOLUTION......Page 216
THEORIES AND POLICIES......Page 217
THE GROWTH OF KNOWLEDGE......Page 218
SHARED FRAMEWORKS FOR KNOWLEDGE......Page 220
KNOWLEDGE AND DECISIONS......Page 222
ORGANIZATIONAL ROUTINES......Page 224
MARKET PROCESSES......Page 227
MARKET RELATIONSHIPS......Page 228
INNOVATION......Page 231
CONCLUSIONS......Page 233
REFERENCES......Page 234
INTRODUCTION......Page 236
Critiques of evolutionary optimality in biology......Page 237
PANGLOSSIAN CONCEPTIONS OF EVOLUTION IN ECONOMICS......Page 239
Group versus gene......Page 243
HIGHER-LEVEL SELECTION IN SOCIO-ECONOMIC EVOLUTION......Page 245
Habits and routines as genes......Page 247
Notes on the evolution of habits and institutions......Page 249
CONCLUDING REMARKS......Page 251
NOTES......Page 252
REFERENCES......Page 253
INTRODUCTION......Page 257
INSTITUTIONS AND THE COSTS OF EXCHANGE......Page 258
WHAT ARE INSTITUTIONS?......Page 260
INSTITUTIONS AND TRANSACTION COSTS......Page 263
INSTITUTIONS AND TRANSACTION AND PRODUCTION COSTS......Page 265
THE SOURCES OF INSTITUTIONAL INEFFICIENCY......Page 267
HOW DO INSTITUTIONS CHANGE?......Page 268
INSTITUTIONAL CHANGE ILLUSTRATED......Page 270
INSTITUTIONS AND ECONOMICS......Page 272
Behavioural models......Page 273
Understanding institutions and change......Page 274
REFERENCES......Page 275
Part V CONCLUSION......Page 277
1 THE REDISCOVERY OF INSTITUTIONS IN ECONOMIC THEORY......Page 278
Theme 1......Page 280
Theme 2......Page 281
Theme 3......Page 282
3 ARE THERE ONE OR MORE NEO-INSTITUTIONALIST PROGRAMMES?......Page 283
4 RESEARCH PROGRAMMES BASED ON EQUILIBRIUM MODELS AND THE MAXIMIZATION PRINCIPLE......Page 285
Orthodox, neoclassical economics......Page 286
The principal-agency theory......Page 288
5 FROM EQUILIBRIUM MODES OF EXPLANATION TO THE FUNCTIONALIST EXPLANATIONS OF NEO-INSTITUTIONALISM......Page 289
From the property rights programme to Akerlof-Stiglitz’s theory of imperfect information and institutions......Page 293
Game theory and institutions......Page 295
Oliver Williamson’s transaction cost theory as a scientific research programme......Page 296
NEO-INSTITUTIONALIST THEORIES BASED ON EXPLANATORY MODELS WHICH FOCUS ON SOCIAL CHANGE......Page 298
‘Austrian’ institutionalism......Page 301
Path-dependency theory......Page 303
Nelson and Winter’s evolutionary research programme......Page 305
North’s transaction cost theory......Page 307
NOTES......Page 309
REFERENCES......Page 310
INDEX......Page 313