An important part of what it means for agents to be situated in the everyday world of human affairs includes their engagement with economic practices. In this paper we employ the concept of cognitive institutions in order to provide an enactive and interactive interpretation of market and economic reasoning. We challenge traditional views that understand markets in terms of market structures or as processors of distributed information. The alternative conception builds upon the notion of the market as a ‘scaffolding institution’. (...) Introducing the concept of market as a ‘socially extended’ cognitive institution we go beyond the notion of scaffolding to provide an enactive view of economic reasoning that understands the market participant in terms of social interactive processes and relational autonomy. Markets are more than inert devices for information processing; they can be viewed as ‘highly scaffolded’, where strong constraints and incentives predictably direct agents’ behavior. Building on this idea we argue that markets emerge from (a) the economic interaction of both supply and demand sides, in continual and mutual interplay, and (b) more basic social interactions. Consumer behavior in the marketplace is complex, not only determining the market price, but also extending the consumer’s cognitive processes to reliably attain a correct evaluation of the good. Moreover, this economic reasoning is socially situated and not something done in isolation from other consumers From a socially situated, interactive point of view buying or not buying a good is something that enacts the market. This shifts the status of markets from external institutions that merely causally affect participants’ cognitive processes to social institutions that constitutively extend these cognitive processes. On this view the constraints imposed by social interactions, as well as the possibilities enabled by such interactions, are such that economic reasoning is never just an individual process carried out by an autonomous individual, classically understood. In this regard, understanding the concept of relational autonomy allows us to see how economic reasoning is always embodied, embedded in, and scaffolded by intersubjective interactions, and how such interactions make the market what it is. (shrink)

In this paper we consider the importance of trust, in the context of economic institutions, and specifically with respect to questions about market mechanisms and the role of social interactions. We review recent advances in institutional economics closely tied to developments in philosophy of mind and cognitive science, involving extended and enactive cognition. We argue that the analysis of different conceptions of institutional mind extension, in Denzau and North’s shared mental models, Clark’s extended mind, and a more enactive approach that (...) emphasizes the importance of social interaction and personal relationships, can benefit from Kathrine Hawley’s distinction between reliability and trust. Institutional arrangements based solely on the reliability of impersonal mechanisms can lead to a variety of social pathologies and, at the extreme, a form of cognitive atrophy, all of which can undermine the sustainability of institutions. Even if trust comes with risks and some degree of unpredictability, it turns out to be a necessary glue-like ingredient in the constitution of social institutions. (shrink)

The ‘bat and ball’ is one of the problems most frequently employed as a testbed for research on the dual-system hypothesis of reasoning. Frederick (J Econ Perspect 19:25–42, 2005) is the first to envisage the possibility that different numerical arrangements of the ‘bat and ball’ problem could lead to different dynamics of activation of the dual-system, and so to different performances of subjects in task accomplishment. This possibility has triggered a strand of research oriented to accomplish ‘sensitivity analyses’ of the (...) ‘bat and ball’ problem. The scope of this paper is to test experimentally the specific hypothesis that numerals are responsible for the selective activation of the two systems of reasoning in this task. In particular, we argue that their role goes beyond and cannot be reduced to that of numbers conceived as magnitudes. To test our hypothesis, we devise an experimental setting in which the role of numbers (as magnitudes) is rendered irrelevant. We find experimental results consistent with our hypothesis. We further provide a link between the literature on mathematical problem-solving and that on mathematical cognition research, in particular that branch labeled embodied mathematical cognition. (shrink)

Simon’s notion of bounded rationality is deeply intertwined with his activity as a cognitive psychologist and founder of so-called cognitivism, a mainstream approach in cognitive psychology until the 1980s. Cognitivism, understood as ‘symbolic information processing,’ provided the first cognitive psychology foundation to bounded rationality. Has bounded rationality since then fully followed the development of cognitive psychology beyond symbolic information processing in the post-Simonian era? To answer this question, this paper focuses on Simon’s opposition during the 1990s to a new view (...) of cognition called situated cognition, which has since put into question the entire view in cognitive psychology of humans as symbolic information processors. This paper then reads the cognitivism/situated cognition debate through the lens of current bounded rationality research in economics, in order to inquire into whether it has tackled the issues in that controversy; to envisage possible new foundations for a cognitive psychology-based bounded rationality. (shrink)

The current notions of bounded rationality in economics share distinctive features with Simon’s original notion of bounded rationality, which still influences the theoretical and experimental research in the fields of choice, judgment, decision making, problem solving, and social cognition. All these notions of bounded rationality are in fact equally rooted in the information-processing approach to human cognition, expressing the view that reasoning is disembodied and that it can be reduced to the processing of abstract symbolic representations of the environment. This (...) is in contrast with the last three-decade advancements in cognitive psychology, where a new view on human cognition has emerged under the general label of ‘embodied cognition’, demonstrating that cognition and reasoning are grounded in the morphological traits of the human body and the sensory-motor system. In this paper we argue that embodied cognition might reform the current notions of bounded rationality and we propose a number of arguments devoted to outline a novel program of research under the label of ‘embodied rationality’: reasoning is situated as it arises from the ongoing interaction between the subject and the environment; reasoning, not being exclusively a mental phenomenon, constitutively relies on the physical resources provided by the environment; the sensory-motor system provides the building blocks for abstract reasoning, automatic thinking is rooted in the evolutionary coupling between the morphological traits of the human body and the environment. (shrink)

The “scaling-up” problem concerns radical embodied cognition’s (REC) supposed inability to extend its explanatory reach beyond simple cognitive phenomena. This paper questions the problem’s main assumption, that is, the possibility of sorting phenomena according to their inherent cognitive complexity or representation-hunger. To do so, I focus on a class of phenomena whose degree of representation-hunger has been much debated: social phenomena (and their cognitive correlates). Some, like Clark and Toribio (1994), consider social phenomena the absolute top of representation-hunger, while others, (...) like radical enactivists, conceive of sociality as a non-representational resource; two opposite views which demonstrate how hard it is to place sociality somewhere in a representational hierarchy. An exploration into two social disciplines provides reasons to question the tenability of the scaling-up problem in the case of social phenomena and hence in general. The long debate in social psychology over dual-process models of cognition suggests distinguishing between the complexity of a task and its putative cognitive requirements, therefore rejecting that form of cognitive-task essentialism inherent in the idea of representation-hunger. The recent encounter of radical enactivism with social theory provides, on the other hand, a non-representational explanation of institutional phenomena. In the end, the paper suggests that one of the following must hold: either the scaling-up problem is untenable in its traditional (hierarchical) understanding or radical enactivism has already scaled up to social phenomena, understood as the pinnacle of representation-hunger. (shrink)

Starting in the 1950s, computer programs for simulating cognitive processes and intelligent behaviour were the hallmark of Good Old-Fashioned Artificial Intelligence and ‘cognitivist’ cognitive science. This article examines a somewhat neglected case of simulation pursued by one of the founding fathers of simulation methodology, Herbert A. Simon. In the 1970s and 1980s, Simon had repeated contacts with Marxist countries and scientists, in the context of which he advanced the idea that cognitivism could be used as a framework for simulating dialectical (...) materialism. Simon's idea was, in particular, to represent dialectical processes through a ‘symbolic’ version of dialectical logic. This article explores the context of Simon's interaction with Marxist countries—China and the USSR—and also assesses the outcome of the simulation. The difficulty with simulating distinctive features of dialectical materialism is read in light of the underlying assumptions of cognitivism and, ultimately, in light of the attempt to tame a rival world view. (shrink)

The paper discusses how research on embodied cognition in cognitive science can contribute to the naturalization of rationality. The investigation takes place in two steps. First, we provide a conceptual map of possible new ideas of rationality inspired by embodied cognition. Given the plurality of theories of embodied cognition, we distinguish different approaches according to their increasing degree of radicalism. We consider ecological rationality as currently the best candidate for naturalizing rationality, and, after identifying its descriptive and normative building blocks, (...) we provide an increasingly radical embodied interpretation of them. The outcome is four new concepts of rationality, in increasing order of embodied radicalism: _embodied bounded rationality_, _body rationality_, _extended rationality_, and _radical embodied rationality_. We emphasize that while less radical concepts currently align better with the idea of methodological naturalism, radical concepts are best conceived of as instances of ontological naturalism. The second step of our investigation concerns comparing the four embodied rationality concepts in light of three meta-criteria: internal epistemic values, empirical success, and intertheoretic compatibility. While empirical success currently favors less radical concepts, intertheoretic compatibility demonstrates the promises of rationality’s embodied radicalism. (shrink)

The stated aim of cryptocurrencies is to free the monetary system from the need to trust financial intermediaries, by relying on incentive design and technology. Many descriptive studies, however, have questioned cryptocurrencies’ delivery on the promise of trustlessness. This paper promotes a normative analysis of trust in cryptocurrencies by discussing (i) whether trust is in principle eliminable, and (ii) whether trustlessness is in itself a desirable goal. These issues are closely related, we argue, to the further issue of what kind (...) of institutions cryptocurrencies represent. We discuss the cognitive functions played by cryptocurrencies through the lens of the “extended mind” hypothesis in the philosophy of mind and hence conceive of cryptocurrencies as mind-extending institutions. As the models of institutional mind extension differ in the fiduciary bond they assume exists between individuals and institutional resources, we compare the reliance-based model of “scaffolding institutions” with the trust-based model of “cognitive institutions,” showing that the ineliminability and desirability of trust lead to seeing cryptocurrencies as instances of the latter. In the end, our discussion suggests that trust is a necessary component of cryptocurrencies’ cognitive functions and its promotion helps to perform such cognitive functions more effectively and sustainably. (shrink)

The paper provides a neurophilosophical assessment of a controversy between two neuroeconomic models that compete to identify the putative object of neural utility: goods or actions. We raise two objections to the common view that sees the ‘good-based’ model prevailing over the ‘action-based’ model. First, we suggest extending neuroeconomic model discrimination to all of the models’ neurophilosophical assumptions, showing that action-based assumptions are necessary to explain real-world value-based decisions. Second, we show that the good-based model’s presumption of introducing a normative (...) neural definition of economic choice would arbitrarily restrict the domain of economic choice and consequently of economics. (shrink)

Periodically, by a rough estimate twice per decade, a new popular book aspires to shake our common understanding of rationality. Since this concept is not only the backbone of normative analysis in...