TY - JOUR
T1 - Rational choice without closure
T2 - The microfoundations of virtuous cycles and vicious circles
AU - Martin, Adam
N1 - Funding Information:
The financial support of the Institute for Humane Studies is greatly appreciated. Daniel D’Amico, Nicholas Snow, Diana Thomas, Michael Thomas, Jeremy Horpedahl, Nigel Ashford, and the participants in the IHS Summer Research Fellowship program provided helpful comments. Two anonymous referees were also most helpful. The usual caveat applies.
PY - 2011/12
Y1 - 2011/12
N2 - Economic stories with a rational choice structure usually entail closure or equilibrium. This paper argues that Knightian uncertainty and Kirznerian alertness allow economists to construct plausible accounts of open-ended processes such as virtuous cycles and vicious circles without abandoning the centrality of instrumental rationality. The basic form of such stories is explored and two example cases are put forward.
AB - Economic stories with a rational choice structure usually entail closure or equilibrium. This paper argues that Knightian uncertainty and Kirznerian alertness allow economists to construct plausible accounts of open-ended processes such as virtuous cycles and vicious circles without abandoning the centrality of instrumental rationality. The basic form of such stories is explored and two example cases are put forward.
KW - economic development
KW - economic processes
KW - entrepreneurship
KW - interventionism
KW - uncertainty
UR - http://www.scopus.com/inward/record.url?scp=84859016829&partnerID=8YFLogxK
U2 - 10.1080/1350178X.2011.628044
DO - 10.1080/1350178X.2011.628044
M3 - Article
AN - SCOPUS:84859016829
VL - 18
SP - 345
EP - 361
JO - Journal of Economic Methodology
JF - Journal of Economic Methodology
SN - 1350-178X
IS - 4
ER -