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Institutions are rules that are supported by various enforcement mechanisms. Cognition refers to the process of how men perceive and process information, whereas rationality refers to how these processes are modelled. Within institutional economics there is a growing scepticism towards extending the conventional economic frame of analysis to institutions. In particular, the notion of perfect rationality is increasingly questioned. At the same time human cognition has become a major field of research in psychology. This book explores what institutional economics can learn from cognitive psychology regarding the proper modelling of rationality in order to explain institutional change.
List of contents
Cognition, Rationality and Institutions - Introduction and Overview.- I: Institutions and Cognition.- Suboptimality and Social Institutions: The Relationship Between Cognition and Context.- Comment.- Patterned Variation. The Role of Psychological Dispositions in Social and Institutional Evolution.- Comment.- Legal Design and the Evolution of Remorse.- Comment.- II: Cognition and Rationality.- Rent Leaving.- Comment.- Reasoning in Economics and Psychology: Why Social Context Matters.- Comment.- Decision Making and Institutionalized Cognition.- Comment.- III: Rationality and Institutions.- Rationally Transparent Social Interactions.- Comment.- Verstehen, Ideal Types and Situational Analysis for Institutional Economics.- Comment.- Learning and its Rationality in a Context of Fundamental Uncertainty.- Comment.- List of Authors.
