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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.
First published in 1993. Routledge is an imprint of Taylor & Francis, an informa company.
International institutions vary widely in terms of key institutional features such as membership, scope, and flexibility. In this 2004 book, Barbara Koremenos, Charles Lipson, and Duncan Snidal argue that this is so because international actors are goal-seeking agents who make specific institutional design choices to solve the particular cooperation problems they face in different issue-areas. Using a Rational Design approach, they explore five features of institutions - membership, scope, centralization, control, and flexibility - and explain their variation in terms of four independent variables that characterize different cooperation problems: distribution, number of actors, enforcement, and uncertainty. The contributors to the volume then evaluate a set of conjectures in specific issue areas ranging from security organizations to trade structures to rules of war to international aviation. Alexander Wendt appraises the entire Rational Design model of evaluating international organizations and the authors respond in a conclusion that sets forth both the advantages and disadvantages of such an approach.
Prevailing economic theory presumes that agents act rationally when they make decisions, striving to maximize the efficient use of their resources. Psychology has repeatedly challenged the rational choice paradigm with persuasive evidence that people do not always make the optimal choice. Yet the paradigm has proven so successful a predictor that its use continues to flourish, fueled by debate across the social sciences over why it works so well. Intended to introduce novices to rational choice theory, this accessible, interdisciplinary book collects writings by leading researchers. The Limits of Rationality illuminates the rational choice paradigm of social and political behavior itself, identifies its limitations, clarifies the nature of current controversies, and offers suggestions for improving current models. In the first section of the book, contributors consider the theoretical foundations of rational choice. Models of rational choice play an important role in providing a standard of human action and the bases for constitutional design, but do they also succeed as explanatory models of behavior? Do empirical failures of these explanatory models constitute a telling condemnation of rational choice theory or do they open new avenues of investigation and theorizing? Emphasizing analyses of norms and institutions, the second and third sections of the book investigate areas in which rational choice theory might be extended in order to provide better models. The contributors evaluate the adequacy of analyses based on neoclassical economics, the potential contributions of game theory and cognitive science, and the consequences for the basic framework when unequal bargaining power and hierarchy are introduced.
Over the last few decades, the notion of rationality has come to dominate the social sciences. This book stresses that the all too narrow economic conception of rationality should be complemented by a number of alternatives. All this has both theoretical and normative implications. Whereas economists typically defend a central role for markets, alternative conceptions of rationality create more room for legitimate government interventions and informal communities. This book argues that any search for a desirable institutional structure should be based on empirically adequate models of people. Based on the optimistic belief that people are both able and willing to improve the rules and institutions that govern their lives, it should be of interest to anyone working within the field of political philosophy.
Political economy has been an essential realm of inquiry and has attracted myriad intellectual adherents for much of the period of modern scholarship. The discipline's formal split into the distinct studies of political science and economics in the nineteenth-century, while advantageous for certain scientific developments, has biased the way economists and political scientists think about many issues, and has placed artificial constraints on the study of many important social issues. This volume calls for a reaffirmation of the importance of the unified study of political economy, and explores the frontiers of the interaction between politics and markets. This volume brings together intellectual leaders of various areas, drawing upon state-of-the-art theoretical and empirical analysis from each of the underlying disciplines. Each chapter, while beginning with a survey of existing work, focuses on profitable lines of inquiry for future developments. Particular attention is devoted to fields of active current development.
Consists of original and rev. versions of papers presented at a conference at Airlie House in Virginia, Mar. 1983. Includes bibliographies and index.
Theories of explanation in the social sciences vacillate between holism and individualism. Wettersten contends that this has been a consequence of theories of rationality which assume that rationality requires coherent theories to be shown to be true. Rejecting these traditional assumptions about rationality Wettersten claims that the traditional explanations of rationality have placed unrealistic demands on both individuals and institutions. Analysing the theories of Weber and Popper, Wettersten shows that Popper made considerable progress in the theory of rationality, but ultimately stayed too close to the ideas of Hayek, he explains how this dilemma leads to difficulties in economics, anthropology, sociology, ethics and political theory, and constructs an alternative theory that rationality is critical problem-solving in institutional contexts. Wettersten contends that 'the critical consideration of theories followed by their improvement' dispenses with the need for justification and sees rationality as a social phenomena with an institutional basis. The main social advantages this view offers is that the degree of rationality individuals achieve may be increased by institutional reform without moralizing and that we can explain how institutions steer events insofar as we understand how they determine the problems which individuals seek to solve. It is argued that the central moral advantage of this view is that rationality is shown to be Spinozistic in the sense that it is natural and furthers morality and peace of mind.
An analytical framework for explaining the ways in which institutions and institutional change affect the performance of economies is developed in this analysis of economic structures.