Reflexivity in economics : an experimental examination on the self-referentiality in economic theories / by Serena Sandri.

Format:

Book

Author/Creator:

Sandri, Serena.

Series:

Contributions to economics

Language:

English

Subjects (All):

Economics.

Consumer behavior.

Game theory.

Economics--Psychological aspects.

Physical Description:

xii, 206 pages : illustrations ; 24 cm

Place of Publication:

Heidelberg : Physica ; London : Springer [distributor], 2008.

Summary:

This study discusses the implications of the recursive or self-reflexive effects of economic theories on bounded rational behaviour and interaction. It focuses on the mechanisms through which bounded rational actors perceive the self-referential nature of economic theories and might absorb their prescriptions. As individuals think and are conscious of their thought, reflexivity is potentially involved in all human acts of cognition and in all conceptualizations. Further, the individuals can make use of social theories which can therefore yield recursive effects and interfere with the phenomena they aim to depict. Taking into consideration the bounded rationality of the individuals, this study investigates the modalities by means of which the recursive character of economic theorizing is perceived and the conditions under which economic theories affect behaviour, according to the results of two economic experiments focussing the absorbability of guessing-games' and informational cascades' theories.

Contents:

1 Reflexivity and Self-Reference 5

1.2 Reference Relations 8

1.2.1 Reflection 10

1.2.2 Universality 10

1.2.3 Ungroundedness 11

1.3 Varieties of Self-Reference 11

1.4 Taxonomies of Self-References 15

1.5 Self-Reference in Natural Language 16

1.6 Self-Reference in Formal Language 20

1.7 Logical Consistency of Self-Reference 21

1.7.1 Self-Reference and Paradoxes 22

1.7.2 Harmless and Harmful Self-Reference 24

1.8 Reflexivity in Human Understanding 25

1.9 Self-Reference in Social and Individual Decision-Making 26

2 Reflexivity of Social Reality 31

2.1 What is Social Reality? 32

2.2 Recursivity of the Social Reality 33

2.2.1 Reflexivity in Anthropology 34

2.2.2 Reflexivity in Linguistics 36

2.2.3 Reflexivity in Law 39

2.2.4 Reflexivity in Politics 40

2.2.5 Reflexivity in Sociology 41

2.2.6 Reflexivity in Psychology 42

2.2.7 Reflexivity of Economic Reality 44

3 Reflexivity and Predictability of the Social Sciences 53

3.1 Constructs and Reality 54

3.1.1 Observer, Observation and the Construct of the Self 57

3.1.2 A Constructivist Approach to the Cognitive Processes 59

3.1.3 Scientific Research and Reflexivity 62

3.1.4 Science as Language Game 65

3.1.5 Constructivism and Economics 66

3.2 Recursivity of Social Theorizing and Predictability of Social Reality 67

3.2.1 Social Predictions 68

3.2.2 Explaining and Predicting the Social Reality 69

3.2.3 Reflexive Predictions 72

4 On the Rationality of the Economic Actors 77

4.1 Questioning the Descriptive Validity of Rational Choice Theory 78

4.1.1 The Neoclassical Defence 79

4.1.2 Allais' Experiments 80

4.1.3 Simon's Bounded Rationality Approach 81

4.2 The Bounded Rational Revolution 82

4.2.1 Adaptive and Satisficing Behaviour 84

4.2.2 Principles of Problem-Solving 87

4.2.3 Problem-Solving in Games and Puzzles 89

4.3 Decomposing Rationality 91

4.3.1 Intuition and Reasoning 91

4.3.2 Accessibility 93

4.3.3 Framing Effects 96

4.3.4 Prospect Theory 97

5 Heuristics, Biases and Methods for Debiasing 101

5.1 Bounded Rational Heuristics 102

5.1.1 Building Blocks of Bounded Rational Heuristics 103

5.1.2 Main Features of Bounded Rational Heuristics 104

5.2 Heuristics and Biases 107

5.2.1 Representativeness Heuristic 107

5.2.2 Availability Heuristic 108

5.2.3 Adjustment and Anchoring 108

5.3 Debiasing 109

5.3.1 Debiasing the Representativeness Heuristics 112

5.3.2 Debiasing the Availability Heuristic 114

5.3.3 Debiasing Adjustment and Anchoring 114

5.4 Concluding Remarks on Debiasing and Some Implications for Theory Absorption 115

6 Self-Referentiality of Economic Theories and Theory Absorption 119

6.1 Economic Methodology 120

6.2 Self-Referentiality of Economic Theory and Theory Absorption 123

6.2.1 Self-Referential Theories 124

6.2.2 Introducing the Notion of Theory Absorption 125

6.2.3 Determinants of Theory Absorption 127

6.2.4 Some Theoretical Implications of Theory Absorption 128

6.3 Theory Absorption among Bounded Rational Decision-Makers 132

6.3.1 Individual Absorbability of Theories 133

6.3.2 Full Absorbability of Theories 135

6.3.3 Partial Absorbability of Theories 138

6.4 Applications of Theory Absorption to Economic Policy Advising 140

7 On the Absorbability of Economic Theories - An Experimental Analysis 145

7.1 The Experimental Method in Economics 146

7.2 A Possible Experimental Approach for Testing the Self-Referentiality and Absorbability of Economic Theories 147

7.3 Related Experimental Studies 150

7.4 Some Preparatory Attempts 152

7.4.1 An Experimental Attempt of Debiasing the Conjunction-Effect Bias through Meta-Information 152

7.4.2 A Classroom Experiment on Theory Absorption in Multilateral Integrative Negotiations 153

7.4.3 An Experimental Guessing-Game in the Classroom with Information Feed-Back and Meta-Instructions 154

7.5 On the Absorbability of Guessing Game Theory 155

7.5.1 On the Guessing Game 157

7.5.2 Iterated Elimination of Dominated Strategies in Guessing Games 159

7.5.3 The Experimental Design 160

7.5.4 Experimental Results 162

7.6 An Experimental Study on the Absorbability of Herd Behaviour and Informational Cascades Theories 171

7.6.1 Herding and Informational Cascades 171

7.6.2 A Simple Model of Informational Cascades: A Dichotomy Choice Model 173

7.6.3 Experimental Design 176

7.6.4 Results 177

7.7 Concluding Remarks on the Experimental Examination 182

1 Instructions to the Experiment on the Absorbability of Guessing Game Theory 187

1.2 Additional Tips 188

2 Instructions to the Experiment on the Absorbability of Informational Cascades' Theory 190

2.1 Additional Tips 191.

Notes:

Includes bibliographical references (pages 195-206).

ISBN:

9783790820911

3790820911

OCLC:

248993760