Bounded Rationality, Institutionalism and the Diversity of Economic Institutions
University of Siena, Department of Economics, Working Paper No. 266
22 Pages Posted: 6 Mar 2000
There are 2 versions of this paper
Bounded Rationality, Institutionalism and the Diversity of Economic Institutions
Bounded Rationality, Institutionalism and the Diversity of Economic Institutions
Date Written: October 1999
Abstract
In many respects Veblen's theory and New Institutional Economics lie at different poles. While the Veblenian theory can be considered as an early "strong version" of the theory of bounded rationality, New Institutional Economics "mild version" of bounded rationality extends economising behaviour to bounded rationality itself. Moreover, while New Institutional Analysis emphasises efficiency explanations based on the assumption of given preferences, the Veblenian explanation considers the role of inefficient path-dependent behaviour due to the endogenous formation and resilience to change of the preferences of individuals. However the two approaches share an undesirable feature: the idea of a "unilinear" unfolding of history does not allow an adequate understanding of the diversity of paths taken by different societies. In this respect the comparative analysis of institutions must go beyond both the New Institutional and the Veblenian approaches.
JEL Classification: B0, B3,B4, L2
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Organizational Equilibria and Institutional Stability
By Ugo Pagano
-
By Ugo Pagano
-
The Origin of Organizational Species
By Ugo Pagano
-
Ownership, Technology and Institutional Stability
By Ugo Pagano and Bob Rowthorn
-
Public Markets, Private Orderings and Corporate Governance
By Ugo Pagano
-
Incomplete Contracts, Intellectual Property and Institutional Complementarities
By Ugo Pagano and Maria Alessandra Rossi
-
Co-Evolution Paths of Politics, Technology and Corporate Governance
By Marianna Belloc and Ugo Pagano
-
Organizational Equilibria and Production Efficiency
By Ugo Pagano
-
Post-War Institutional Shocks - the Divergence of Italian and Japanese Corporate Governance Models
By Fabrizio Barca, Katsuhito Iwai, ...