Explaining economic change: The Interplay Between Cognition and Institutions

Legal Theory

Volumn 3, Issue 3, 1997, Pages 211-226

  Knight, Jack ^a   North, Douglass ^a  

^a WASHINGTON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 85013234253     PISSN: 13523252     EISSN: 14698048     Source Type: Journal    
DOI: 10.1017/S1352325200000768     Document Type: Article

References (35)

1. Norman Schofield, Democratic Stability, in EXPLAINING SOCIAL INSTITUTIONS 192 (Tack Knight & Itai Sened eds., 1995).
2. See Debra Satz & John Ferejohn, Rational Choice and Social Theory, 9102 J. PHIL. 71-87 (1994), for an argument to the effect that as this complexity increases, traditional rationalchoice theory becomes increasingly inadequate for the task of social explanation. While we share tlieir concerns about the inadequacy of traditional theory, our primary task in this essay is to identify die social factors in non-market environments that facilitate choice and that should, therefore, be incorporated in Uieories of economic change.
3. See James Johnson, Is Talk Really Cheap? Prompting Conversation Between Critical Theory and Rational Choice, 87 AM. POL. SCI. REV. 74-36 (1993), for an analysis of how game theoretic models in the social sciences have addressed the issue of beliefs and common knowledge.
4. Christina Bicchieri, RATIONALITY AND COORDINATION 127 (1993).
5. RISK. UNCERTAINTYAND PROFIT (1921).
6. Kenneth Arrow, Alternative Approaches to the Theory of Choice in Risk-Taking Situations, 19 ECONOMETRICA 404-37,417 (1951).
7. Ronald Heiner, The Origitis of Predictable Behavior, 73 AM. ECON. REV. 560-95.
8. Douglass North, INSTITUTIONS, INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE (1990); Five Propositions about Institutional Change, in EXPLAINING SOCIAL INSTITUTIONS (lack Knight & Itai Sened eds., 1995).
9. For critical analyses of the prevalent theories of institutional emergence and change, see Thrainn Eggertsson, ECONOMIC INSTITUTIONS AND BEHAVIOR (1990) and Jack Knight, Models, Interpretations and Theories: Constructing Explanations of Institutional Emergence and Change, in EXPLAINING SOCIAL INSTITUTIONS (Jack Knight & Itai Sened eds., 1995).
10. We ignore for present purposes other factors that can significantly alter the institutional effects on economic efficiency. Two of the most significant are the transaction costs of institutional change and the effects of distributional conflict over the nature of social institutions. See generally Jack Knight, INSTITUTIONS AND SOCIAL CONFLICT (1992).
11. North, INSTITUTIONS, INSTITUTIONAL QIANGE AND ECONOMIC PERFORMANCE, INSTITUTIONS AND SOCIAL CONFLICT note 9, at 8.
12. For a more general discussion of the relationship between mental models and economic institutions, see Arthur Denzau & Douglass North, Shared Mental Models: Ideologies and Institutions.
13. North, Five Propositions, Shared Mental Models: Ideologies and Institutions. note 9, at 17
14. North, Five Propositions note 12, at 20.
15. North, Five Propositions note 12 note 16, at 17.
16. JUDGMENT UNDER UNCERTAINTY: HEURISTICS AND BIASES (Daniel Kahneman, Paul Slovic & Amos Tversky, eds., 1982).
17. Edwin Hutchins, COGNITION IN THE WILD (1995).
18. Id at 354.
19. Id at xiii.
20. Id. at xiv.
21. Id at 49.
22. Id, at 280.
23. Hutchins, Id note 24, at 128-29.
24. Id.
25. Id. at 289.
26. Id. at 316.
27. Id. at 185.
28. Id. at 228.
29. Id. at 240.
30. Id. at 354.
31. Id. at 374.
32. Id. at 178.
33. Id, at 177-78.
34. Avner Grief, Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualistic Societies, 102 J. POL. ECON. 912-50 (1994).
35. On the application of theories of institutional change to informal conventions and social norms, see Jean Ensminger and Jack Knight, Changing Social Norms, CURR. ANTHROPOL. (February 1997).