Thrainn Eggertsson and the Problem of Knowledge: The Effectiveness of Conveying Information in the Electoral and Financial Markets
John N. Drobak
Washington University in Saint Louis - School of Law
June 7, 2012
Washington University in St. Louis Legal Studies Research Paper No. 12-05-17
Throughout his career, Thrainn Eggertsson has been concerned with improving economic theory as a way to help us to understand the economic world. This has led him to focus on the problem of knowledge, which Eggertsson believes hinders the improvement of theory. This essay attempts to contribute to a better understanding of the knowledge problem by examining some aspects of the way people process information. The essay posits that belief systems and non-rational decision-making limit the effectiveness of information transmission and make people reluctant to accept and process new information. To illustrate this concern, it examines use two types of information “markets.” First, the essay will consider whether information about political candidates is effective in changing the views of the voters. Then it will examine the conservatism of economists as an important factor in decisions about the appropriate degree of economic regulation. My hope is that the essay will make a small contribution toward helping with what Trainn has identified as the knowledge problem.
Number of Pages in PDF File: 35
Keywords: Sociology of Economics, Economics of Knowledge, Economic Decision Making, Models of Decision Making
JEL Classification: A12, A13, A14, B31working papers series
Date posted: June 7, 2012
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