Critics of mainstream economics typically rest important weight on the differences between people and the 'agents' that populate economic theory and economic models. Hollis and Nell (1975) is both representative of and ancestral to many more recent variations on the theme. Lately, the upgraded status of behavioral economics (BE) within the discipline's mainstream has encouraged a number of writers to use revolutionary rhetoric in promotion of a 'paradigm shift' that includes the rejection of 'rational economic man' (Ormerod (...) 1994, Heilbroner and Milburg 1995, Fullbrook 2003). The current leading developers of BE are generally more circumspect, claiming that their approach complements standard theory rather than promising to supplant it (Camerer and Loewenstein 2004, Angner and Loewenstein this volume). However, they generally join the more florid critics in supposing that microeconomics is bound to improve its empirical relevance to the extent that it substitutes the study of people for that of abstract economic agents. Another body of thought that promotes this view stems from Sen's (1977) attack on standard economic agents as 'rational fools', amplified in Davis's (2003) argument that since economic agents lack some essential properties of human individuals, economic theory requires fundamental reform if it is to make progress in explaining human behavior. (shrink)

Traditional economics treats the defining subjective properties of economic agents as if they are determined independently of individual and collective relations with other agents. This collection of essays reflects the increasingly common view that economics cannot continue to disregard all economic phenomena inconsistent with this conception. The volume is especially concerned with the idea of intersubjective influences on market outcomes. A team of expert international contributors have been brought together to address the question of intersubjectivity from a variety (...) of perspectives. Using methods of description and analysis they explore the structures and effects of concrete interdependencies between individual subjectivities engaged in economic activity, and develop conceptual and analytical tools for this task. Many of the essays are interdisciplinary in scope and in addition to economics the book should provide valuable lessons in psychology, sociology, social theory, philosophy, political science and history. (shrink)

This paper offers an account of how individuals act as agents when we employ a narrative approach to explaining their personal identities. It applies Korsgaard's idea of a "reflective structure of consciousness" to provide foundations for a richer account of the individual economic agent, and uses this to explain and distinguish the concepts of personal identity, individual identity, and social identity. The paper argues that individuals' personal identities may be in conflict with their socially constructed individual identities. Individuals' (...) social identities are represented as a link between personal identity and individual identity. The overall framework is proposed as an alternative to the atomistic individual conception and a contribution to the socially embedded individual conception. (shrink)

In the 1860s and 1870s the logic of Boole and the calculating machines of Babbage were key resources in W. S. Jevons’s attempt to construct a mechanical model of the mind, and both therefore played an important role in Jevons’s attempted revolution in economic theory. In this same period both Boole and Babbage were studied within the Cambridge Moral Sciences Tripos, but the Cambridge reading of Boole and Babbage was much more circumspect. Implicitly following the division of the moral (...) sciences into material and ‘real’ as established by the Rev. Grote, John Venn treated Boole’s logic as a purely formal science, while Alfred Marshall based his psychological model of the mechanical part of the human mind upon Babbage’s two-level machine. From the different perspectives of logic and psychology, Venn and Marshall did not simply incorporate their readings of Boole and Babbage, but also attempted to establish the limits to any mechanical explanation of the mind. This comparison of the attitudes to mental science of Jevons and Marshall provides a foundation from which the differing conceptions of economic theory of the two men can be established.Keywords: Alfred Marshall; Charles Babbage; George Boole; John Venn; Logic; Psychology. (shrink)

We critically survey explicit discussions of the narrativity of economic agents by economists. Narrativity broadly refers to the way humans construct and use stories, notably to define their personal identity. We borrow from debates outside of economics to provide the critical dimension of our survey. Most contributions on the narrativity of economic agents do not discuss one another. To establish communication, we suggest a structure of oppositions that characterize these contributions taken as a whole. These oppositions are notably (...) characterized by three tensions: in terms of methodological attitudes, of underlying theories of personal identity postulating the existence of a unique sense of self or not and of the normative implications of narrativity. The main goal is to clarify the structure of opposite positions within a more or less explicit debate about the identity of individuals in economics. (shrink)

Critiques of Neoclassical Economics extend, unsurprisingly, to its mathematical structure. The discussion has largely focused on General Equilibrium Theory (GET), a formalism developed by Leon Walras over a century ago. Internally consistent, but highly unrealistic, GET lacks predictive power, and has been a historical failure. As an alternative, this article proposes a methodology largely developed by Grabner et al. (2019), in which Agent-Based Models (ABMs) are linked with existing Equation-Based Models (EBMs) as a means of developing a more powerful (...) formalism. The approach is illustrated by application to the Arrow- Debreu (AD) model of Neoclassical theory, and the Kuznets Curve of Developmental Economics. Broader implications for the social and natural sciences are briefly considered. (shrink)

Economies are complicated systems encompassing micro behaviors, interaction patterns, and global regularities. Whether partial or general in scope, studies of economic systems must consider how to handle difficult real-world aspects such as asymmetric information, imperfect competition, strategic interaction, collective learning, and the possibility of multiple equilibria. Recent advances in analytical and computational tools are permitting new approaches to the quantitative study of these aspects. One such approach is Agent-based Computational Economics (ACE), the computational study of economic processes (...) modeled as dynamic systems of interacting agents. This chapter explores the potential advantages and disadvantages of ACE for the study of economic systems. General points are concretely illustrated using an ACE model of a two-sector decentralized market economy. Six issues are highlighted: Constructive understanding of production, pricing, and trade processes; the essential primacy of survival; strategic rivalry and market power; behavioral uncertainty and learning; the role of conventions and organizations; and the complex interactions among structural attributes, institutional arrangements, and behavioral dispositions. (shrink)

This book presents Ariel Rubinstein's lecture notes for the first part of his well-known graduate course in microeconomics.

Hume has a special place in justifications of claims made for rational choice theory to offer a unified language and explanatory framework for the social sciences. He is invoked in support of the assumptions characterising the instrumental rationality of agents and the constancy of their motivations across different institutional settings. This paper explores the problems with the expansionary aims of rational choice theory through criticism of these appeals to Hume. First, Hume does not assume constancy. Moreover, Hume’s sensitivity to the (...) relationships between institutional setting and individual motivation owes something to the relative transparency of the plural language of vices and virtues that he employs. Second, rational choice theory’s minimal modification of Hume’s account of the relation of reason and the passions through the introduction of constraints of consistency on preferences is unstable. (shrink)

Now that complex Agent-Based Models and computer simulations spread over economics and social sciences - as in most sciences of complex systems -, epistemological puzzles (re)emerge. We introduce new epistemological concepts so as to show to what extent authors are right when they focus on some empirical, instrumental or conceptual significance of their model or simulation. By distinguishing between models and simulations, between types of models, between types of computer simulations and between types of empiricity obtained through a simulation, (...) section 2 gives the possibility to understand more precisely - and then to justify - the diversity of the epistemological positions presented in section 1. Our final claim is that careful attention to the multiplicity of the denotational powers of symbols at stake in complex models and computer simulations is necessary to determine, in each case, their proper epistemic status and credibility. (shrink)

Now that complex Agent-Based Models and computer simulations spread over economics and social sciences - as in most sciences of complex systems -, epistemological puzzles (re)emerge. We introduce new epistemological tools so as to show to what precise extent each author is right when he focuses on some empirical, instrumental or conceptual significance of his model or simulation. By distinguishing between models and simulations, between types of models, between types of computer simulations and between types of empiricity, section 2 (...) gives conceptual tools to explain the rationale of the diverse epistemological positions presented in section 1. Finally, we claim that a careful attention to the real multiplicity of denotational powers of symbols at stake and then to the implicit routes of references operated by models and computer simulations is necessary to determine, in each case, the proper epistemic status and credibility of a given model and/or simulation. (shrink)

Scientists and engineers seek to understand how real-world systems work and could work better. Any modeling method devised for such purposes must simplify reality. Ideally, however, the modeling method should be flexible as well as logically rigorous; it should permit model simplifications to be appropriately tailored for the specific purpose at hand. Flexibility and logical rigor have been the two key goals motivating the development of Agent-based Computational Economics (ACE), a completely agent-based modeling method characterized by seven specific (...) modeling principles. This perspective provides an overview of ACE, a brief history of its development, and its role within a broader spectrum of experiment-based modeling methods. (shrink)

In this article, the author focuses on Philip Kitcher's and Alvin Goldman's economic models of the social character of scientific knowledge production. After introducing some relevant methodological issues in the social sciences and characterizing Kitcher's and Goldman's models, the author goes on to show that special problems arise directly from the concept of an agent invoked in the models. The author argues that the two distinct concepts of agents, borrowed from economics and cognitive psychology, are inconsistent. Finally, the (...) author discusses some of the normative implications that arise from adopting economic concepts of agents in the study of science. (shrink)

While there are many important similarities between evolution in biology and learning in economics, we should be cautious when importing ideas from one evolutionary context to the other. I will argue that there is a lack of caution is behind the tendency to think of measures of correlation (e.g., ‘relatedness’) as akin to attitudes of economic agents (e.g., as capturing how much an organism or agent ‘values’ or ‘cares about’ a social partner), leading to use of unreliable heuristics (...) and misunderstandings in biology, as well as to misuse of biological results in economics. (shrink)

This article describes the potential impact that free (i.e., open source) software can have on an existing commercial software market. A model for the software market is constructed in terms of autonomous agents, which represent the users, the companies, and the free software providers. The model specifies a reservation price for each user agent and develops a gradient learning strategy for revenue-maximizing company agents. Simulations explore parameters such as the demand distribution, and the relative importance of market share, advertising (...) and random effects in product visibility. Results from the case without free software show a prevalence of monopolies, which is consistent with other studies of high-technology market economics. The effects of free software are not uniform, but are highly parameter dependent. A “capture region” is found in which free software eventually dominates the market. (shrink)

Neoclassical economic theory, which still dominates the science, has proven inadequate to predict financial crises. In an increasingly globalised world, the consequences of that inadequacy are likely to become more severe. This article attributes much of the difficulty to an emphasis on equilibrium as an idealised property of economic systems. Alternatively, this article proposes that actual economies are typically out of balance, and that any equilibrium which may exist is transitory. That single changed assumption is central to complexity (...) economics, a view which is presented in detail. It is suggested that economic crises will be most effectively avoided when economists utilise methods, grounded in complexity theory, which can identify threat in an early stage. As a programmatic example, the use of Agent-Based Models (ABMs) combined with Boolean networks (BNs), is defended as a promising method for recognising vulnerability. (shrink)

The explosive growth in computational power over the past several decades offers new tools and opportunities for economists. This handbook volume surveys recent research on Agent-based Computational Economics (ACE), the computational study of economic processes modeled as open-ended dynamic systems of interacting agents. Empirical referents for “agents” in ACE models can range from individuals or social groups with learning capabilities to physical world features with no cognitive function. Topics covered include: learning; empirical validation; network economics; social dynamics; financial (...) markets; innovation and technological change; organizations; market design; automated markets and trading agents; political economy; social-ecological systems; computational laboratory development; and general methodological issues. (shrink)

Since Economics survey by Windrum et al., research on empirical validation of agent-based Agent-based model in Economics has made substantial advances, thanks to a constant flow of high-quality contributions. This Chapter attempts to take stock of such recent literature to offer an updated critical review of the existing validation techniques. We sketch a simple theoretical framework that conceptualizes existing validation approaches, which we examine along three different dimensions: Comparison between artificial and real-world Data; Calibration and estimation of model (...) parameters; and parameter space Exploration. Finally, we discuss open issues in the field of ABM validation and Estimation. In particular, we argue that more research efforts should be devoted toward advancing HypothesisTesting in ABM, with specific emphasis on model stationarity and ergodicity. (shrink)

Neoclassical economics assumes that individuals have stable and context-independent preferences, and uses preference satisfaction as a normative criterion. By calling this assumption into question, behavioural findings cause fundamental problems for normative economics. A common response to these problems is to treat deviations from conventional rational choice theory as mistakes, and to try to reconstruct the preferences that individuals would have acted on, had they reasoned correctly. We argue that this preference purification approach implicitly uses a dualistic model of the human (...) being, in which an inner rational agent is trapped in an outer psychological shell. This model is psychologically and philosophically problematic. (shrink)

Various structural factors influenceorganic farmer decision-making. Analyses that combinestructure and agency provide an opportunity forunderstanding farmers' perceptions of the political,economic, and social ``world'' in which they operate.Rich conversational interviews, conducted with twentycertified organic farmers in Illinois and analyzedwith multiple qualitative methods, show how farmersmediate structural concerns. In addition to political,economic, and social structures, a fourth structure isneeded. Indeed these organic farmers emphasize theimportance of ecological factors in theirdecision-making. Within the perceived economic,political, social, and ecological structures, numeroustopics (i.e., (...) marketing, policy, family, ecosystems)and subtopics (i.e., diversification, farm programs,traditions, soils) exist. Farmers' quotations providedetailed information of how they view and mediatestructures in their daily on-farm decision-making. (shrink)

While this article sets out to advance our knowledge about the characteristics of Nigerian cybercriminals (Yahoo-Boys), it is also the first study to explore the narratives of the Economic and Financial Crimes Commission (EFCC) officers concerning them. It appraises symbolic interactionist insights to consider the ways in which contextual factors and worldview may help to illuminate officers’ narratives of cybercriminals and the interpretations and implications of such accounts. Semi-structured interviews of forty frontline EFCC officers formed the empirical basis of (...) this study and were subjected to a directed approach of qualitative content analysis. While prior studies, for example, indicated that only a group of cybercriminals deploy spiritual and magical powers to defraud victims (i.e. modus operandi), our data analysis extended this classification into more refined levels involving multiple features. In particular, analysis bifurcates cybercriminals and their operations based on three factors: [a] educational-attainment, [b] modus-operandi, and [c] networks-collaborators. Results also suggest that these cybercriminals and their operations are embedded in “masculinity-and-material-wealth”. These contributions thus have implications for a range of generally accepted viewpoints about these cybercriminals previously taken-for-granted. Since these criminals have victims all over the world, insights from our study may help various local and international agencies [a] to understand the actions/features of these two groups of cybercriminals better and develop more effective response strategies. [b] to appreciate the vulnerabilities of their victims better and develop more adequate support schemes. We also consider the limitations of social control agents’ narratives on criminals. (shrink)

We model differences among agents in their ability to recognize temporal patterns of prices. Using the concept of DeBruijn sequences in two dynamic models of markets, we demonstrate the existence of equilibria in which prices fluctuate in a pattern that is independent of the fundamentals and that can be recognized only by the more competent agents. (JEL: C7, D4.

The theme of this issue of the St. Gallen Business Review is "Harmony". For this reason, we would like to discuss whether two aspects of our life- world are in harmony, namely economic optimization and morality. What is the relation between them? According to a widely shared view, which is one aspect of the doctrine of "mainstream economics", the functioning of an economic system does not require moral behaviour on the part of the individual economic agent. (...) In what follows, we will try to convince you that this is false. If all economic agents – managers, employees, bankers, consumers and so on – were purely self-interested, as mainstream economics assumes, our economic practice would fail. There are various reasons for this. Here we will focus on one of them, namely the pivotal role of interpersonal communication. (shrink)

Real-world economies are open-ended dynamic systems consisting of heterogeneous interacting participants. Human participants are decision-makers who strategically take into account the past actions and potential future actions of other participants. All participants are forced to be locally constructive, meaning their actions at any given time must be based on their local states; and participant actions at any given time affect future local states. Taken together, these essential properties imply real-world economies are locally-constructive sequential games. This paper discusses a modeling approach, (...) Agent-based Computational Economics, that permits researchers to study economic systems from this point of view. ACE modeling principles and objectives are first concisely presented and explained. The remainder of the paper then highlights challenging issues and edgier explorations that ACE researchers are currently pursuing. (shrink)

Austrian economics starts out from the thesis that the objects of economic science differ from those of the natural sciences because of the centrality of the economic agent. This allows a certain a priori or essentialistic aspect to economic science of a sort which parallels the a priori dimension of psychology defended by Brentano and his student Edmund Husserl. We outline these parallels, and show how the theory of a priori dependence relations outlined in Husserl’s Logical (...) Investigations can throw light on the Austrian account of entrepreneurship. (shrink)

Arising out of the author's lifetime fascination with the links between the formal language of mathematical models and natural language, this short book comprises five essays investigating both the economics of language and the language of economics. Ariel Rubinstein touches the structure imposed on binary relations in daily language, the evolutionary development of the meaning of words, game-theoretical considerations of pragmatics, the language of economic agents and the rhetoric of game theory. These short essays are full of challenging ideas (...) for social scientists that should help to encourage a fundamental rethinking of many of the underlying assumptions in economic theory and game theory. As a postscript two economists, Tilman Borgers and Bart Lipman, and a logician, Johan van Benthem offer comments. (shrink)

This article argues that agent-based modeling is the methodological implication of Lawson’s championed ontological turn in economics. We single out three major properties of agent-based computational economics, namely, autonomous agents, social interactions, and the micro-macro links, which have been well accepted by the ACE community. We then argue that ACE does make a full commitment to the ontology of economics as proposed by Lawson, based on his prompted critical realism. Nevertheless, the article also points out the current limitations (...) or constraints of ACE. Efforts to overcome them are deemed to be crucial before ACE can make itself more promising to the current ontological turn in economics. (shrink)

This study provides a basic introduction to agent-based modeling (ABM) as a powerful blend of classical and constructive mathematics, with a primary focus on its applicability for social science research. The typical goals of ABM social science researchers are discussed along with the culture-dish nature of their computer experiments. The applicability of ABM for science more generally is also considered, with special attention to physics. Finally, two distinct types of ABM applications are summarized in order to illustrate concretely the (...) duality of ABM: Real-world systems can not only be simulated with verisimilitude using ABM; they can also be efficiently and robustly designed and constructed on the basis of ABM principles. (shrink)

This book brings together contributions from leading researchers in the field of agent-based modelling and simulation. This approach has grown out of some recent and innovative ideas in the social sciences, computer sciences, life sciences, physics and game theory. It is proving helpful in understanding complexity in many domains. The opportunities it offers to explore the experimental approach to social and human behaviour is proving of theoretical and empirical value across a wide range of fields. With contributions from researchers (...) whose work has served to define this new field such as Nigel Gilbert, Robert Axtell (in economics and social science) and Jacques Ferber (in multi-agent systems), as well as practitioners who are working at the cutting edge of the new domain, this collection of essays has been assembled by two of its leading exponents: Frédéric Amblard and Denis Phan. The research, case studies and theoretical approaches discussed in this book are designed to introduce beginners and experts alike to the current state of play in this new and exciting field of social science. (shrink)

In the present article, I will advocate caution against developing artificial moral agents based on the notion that the utilization of preliminary forms of AMAs will potentially negatively feed back on the human social system and on human moral thought itself and its value—e.g., by reinforcing social inequalities, diminishing the breadth of employed ethical arguments and the value of character. While scientific investigations into AMAs pose no direct significant threat, I will argue against their premature utilization for practical and economical (...) use. I will base my arguments on two thought experiments. The first thought experiment deals with the potential to generate a replica of an individual’s moral stances with the purpose to increase, what I term, ’moral efficiency’. Hence, as a first risk, an unregulated utilization of premature AMAs in a neoliberal capitalist system is likely to disadvantage those who cannot afford ’moral replicas’ and further reinforce social inequalities. The second thought experiment deals with the idea of a ’moral calculator’. As a second risk, I will argue that, even as a device equally accessible to all and aimed at augmenting human moral deliberation, ’moral calculators’ as preliminary forms of AMAs are likely to diminish the breadth and depth of concepts employed in moral arguments. Again, I base this claim on the idea that the current most dominant economic system rewards increases in productivity. However, increases in efficiency will mostly stem from relying on the outputs of ’moral calculators’ without further scrutiny. Premature AMAs will cover only a limited scope of moral argumentation and, hence, over-reliance on them will narrow human moral thought. In addition and as the third risk, I will argue that an increased disregard of the interior of a moral agent may ensue—a trend that can already be observed in the literature. (shrink)

Mill (1872, 1874) is an early proponent of the thesis that economics has a special domain in which it can operate relatively independently of findings from other sciences. Contra Mill, I argue that this so-called separateness-thesis is best defendedunder an externalist interpretation of Rational Choice Theory (RCT). Mill’s defence is consistent with an internalist interpretation of RCT. Internalism holds that RCT depicts psychological mechanisms operating in economic agents. I argue that such a defence fails to establish separateness, because it (...) makes economics highly depended on psychological findings. However, externalism understands RCT as an adequate description of how agents react to incentives if certain environmental structures are present. Under this interpretation, we can defend separateness by investigating which features of an environmental structure will lead agents to behave in accordance with RCT. Thereby, we can derive indicators that enable us to demarcate a separate domain for economics. (shrink)

Economics and biology have long been overlapping and mutually enriching fields. We contribute to this cross-fertilization by spelling out the implications for economic theory of some recent insights from evolutionary neurobiology. We note that dynamic homeostasis, a core feature of life processes, has shaped social interactions at varied stages of evolution – from the patterns of competition and cooperation among early life forms to the complex process of human cultures. The resulting homeostatic perspective is not compatible with several leading (...) economic theories but does provide a biological footing for promising concepts such as ecological rationality, heuristics, heterogeneity of economic agents, and complex, self-organizing dynamics. (shrink)

Behavioral economics focuses mainly on how limitations of the human cognitive apparatus, risk attitudes, and human sociality affect decision making. The former two lead to deviations from rationality standards, the latter to deviations from rational self-interest. Some of these research interests are also shared by evolutionary psychology which, however, explains the observed deviations by features of the human genetic endowment conjectured to have evolved under fierce selection pressure in early human phylogeny. Important as the decision-making theoretical perspective of the two (...) disciplines is, it will be claimed to be too narrow to fully account for what an evolutionary approach has to say about economic behavior. This is particularly true regarding the questions of what choices are made and what causes them, i.e., the motivational aspects of behavior. In the language of economics this points to the agents’ preferences. This article discusses how preferences relate to the human genetic endowment, how they can change over time, and what conclusions have to be drawn from extending the analysis to the motivational side. (shrink)

Economics has an impoverished view of virtuous human behaviour in general, and corporate social responsibility in particular. We claim that this is due to a particular, albeit currently dominant approach to economics. This approach focuses on the pursuit of wealth through efficient allocation of scarce resources by ‘rational’ utility‐maximizing economic agents and institutions, such as markets, firms and states, in the exclusive pursuit of ‘efficiency’. This results in an ethic‐free and often inimical approach to virtuous behaviour. However, a different (...) approach to economics, which focuses on sustainable global resource creation and allocation, asserts virtuous responsible behaviour to be part and parcel of economic analysis and performance. (shrink)

This book is concerned with the role of economic philosophy in the processes of belief-formation and social change. Its aim is to further our understanding of the behaviour of the individual economic agent by bringing to light and examining the function of non-rational dispositions and motivations in the determination of the agent's beliefs and goals. Drawing on the work of David Hume and Adam Smith the book spells out the particular ways in which the passions come (...) to affect our ordinary understanding and conduct in practical affairs and the intergenerational and interpersonal transmission of ideas through language. Concern with these problems, it is argued, lies at the heart of an important tradition in British moral philosophy. This emphasis on the non-rational nature of our belief-fixation mechanisms has important implications: it helps to clarify and qualify the misleading claims often made by utilitarian, Marxist, Keynesian and neo-liberal economic philosophers, all of whom stress the overriding power of ideas to shape conduct, policy and institutions. (shrink)

Our economic system, the market economy, is a part of a broader system or “society.” We frequently study the operation of the market economy as if it were autonomous, even though there are many complex and mutual relationships between society, the economic system and the other systems – political, cultural, religious, legal, etc. – that form part of society. In a market economy we may identify several components: a frame or background in which the economic activity takes (...) place, a set of ideas and theories, the values shared by this society, the set of institutions, norms and rules that control the economic behavior of people, and the incentives or motivations of the economic agents. The play of these elements defines the operation of a market economy. Is ethics an institution, or does it belong to the set of values and ideas? In this paper I will discuss the role of institutions, norms and rules in society, with special reference to the economic system, in order to gain insight into the relationship between institutions and ethics. I study first the concept and features of social institutions and norms; second, institutional change, and third, the relationship between ethics and institutions. (shrink)

Economics has an impoverished view of virtuous human behaviour in general, and corporate social responsibility in particular. We claim that this is due to a particular, albeit currently dominant approach to economics. This approach focuses on the pursuit of wealth through efficient allocation of scarce resources by ‘rational’ utility‐maximizing economic agents and institutions, such as markets, firms and states, in the exclusive pursuit of ‘efficiency’. This results in an ethic‐free and often inimical approach to virtuous behaviour. However, a different (...) approach to economics, which focuses on sustainable global resource creation and allocation, asserts virtuous responsible behaviour to be part and parcel of economic analysis and performance. (shrink)

This book is concerned with the role of economic philosophy ("ideas") in the processes of belief-formation and social change. Its aim is to further our understanding of the behavior of the individual economic agent by bringing to light and examining the function of non-rational dispositions and motivations ("passions") in the determination of the agent's beliefs and goals. Drawing on the work of David Hume and Adam Smith, the book spells out the particular ways in which the (...) passions come to affect our ordinary understanding and conduct in practical affairs and the intergenerational and interpersonal transmission of ideas through language. Concern with these problems, it is argued, lies at the heart of an important tradition in the British moral philosophy. This emphasis on the non-rational nature of our belief-fixation mechanisms has important implications: it helps to clarify and qualify the misleading claims often made by utilitarian, Marxist, Keynesian, and neo-liberal economic philosophers, all of whom stress the overriding power of ideas to shape conduct, policy, and institutions. (shrink)

Many economic theorists hold that social institutions can lead otherwise irrational agents to approximate the predictions of traditional rational choice theory. But there is little consensus on how institutions do so. I defend an economic internalist account of the institution-actor relationship by explaining economic rationality as a feature of individuals whose decision-making is aided by institutional structures. This approach, known as the subjective transaction costs theory, represents apparently irrational behavior as a rational response to high subjective transaction (...) costs of thinking and deciding. The theory has two attractive features. First, it reconciles rational choice theory with the increasing body of evidence cataloguing putative errors in economic decision-making. Second, it vindicates the explanatory power of individual choice against externalist challenges; the subjective transaction costs theory keeps economic rationality in the head. (shrink)

An agent-centered, goal-directed, resource-bound logic of human reasoning would do well to note that individual cognitive agency is typified by the comparative scantness of available cognitive resources—information, time, and computational capacity, to name just three. This motivates individual agents to set their cognitive agendas proportionately, that is, in ways that carry some prospect of success with the resources on which they are able to draw. It also puts a premium on cognitive strategies which make economical use of those resources. (...) These latter I callscant-resource adjustment strategies,and they supply the context for an analysis of abduction. The analysis is Peircian in tone, especially in the emphasis it places on abduction’signorance-preservingcharacter. My principal purpose here is to tie abduction’s scarce-resource adjustment capacity to its ignorance preservation. (shrink)

During the COVID-19 crisis there have been many difficult decisions governments and other decision makers had to make. E.g. do we go for a total lock down or keep schools open? How many people and which people should be tested? Although there are many good models from e.g. epidemiologists on the spread of the virus under certain conditions, these models do not directly translate into the interventions that can be taken by government. Neither can these models contribute to understand the (...) economic and/or social consequences of the interventions. However, effective and sustainable solutions need to take into account this combination of factors. In this paper, we propose an agent-based social simulation tool, ASSOCC, that supports decision makers understand possible consequences of policy interventions, but exploring the combined social, health and economic consequences of these interventions. (shrink)