Communication and Economic Theory: How to deal with rationality in a communicational environment PDF
Preview Communication and Economic Theory: How to deal with rationality in a communicational environment
Ethical Economy. Studies in Economic Ethics and Philosophy Birger P. Priddat Communication and Economic Theory How to deal with rationality in a communicational environment Communication and Economic Theory Ethical Economy. Studies in Economic Ethics and Philosophy Series Editors Alexander Brink, University of Bayreuth Jacob Dahl Rendtorff, Roskilde University Editorial Board John Boatright, Loyola University Chicago, Chicago, Illinois, USA George Brenkert, Georgetown University, Washington D.C., USA { James M. Buchanan , George Mason University, Fairfax, Virginia, USA Allan K.K. Chan, Hong Kong Baptist University, Hong Kong Christopher Cowton, University of Huddersfield Business School, Huddersfield, United Kingdom Richard T. DeGeorge, University of Kansas, Lawrence, Kansas, USA Thomas Donaldson, Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, USA Jon Elster, Columbia University, New York, New York, USA Amitai Etzioni, George Washington University, Washington D.C., USA Michaela Haase, Free University Berlin, Berlin, Germany Carlos Hoevel, Catholic University of Argentina, Buenos Aires, Argentina Ingo Pies, University of Halle-Wittenberg, Halle, Germany Yuichi Shionoya, Hitotsubashi University, Kunitachi, Tokyo, Japan Philippe Van Parijs, University of Louvain, Louvain-la-Neuve, Belgium Deon Rossouw, University of Pretoria, Pretoria, South Africa JosefWieland,HTWG-UniversityofAppliedSciences,Konstanz,Germany For furthervolumes: http://www.springer.com/series/2881 Birger P. Priddat Communication and Economic Theory How to deal with rationality in a communicational environment BirgerP.Priddat Universita¨tWitten/HerdeckePra¨sident Witten Germany ISSN2211-2707 ISSN2211-2723(electronic) ISBN978-3-319-06900-5 ISBN978-3-319-06901-2(eBook) DOI10.1007/978-3-319-06901-2 SpringerChamHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2014941627 ©SpringerInternationalPublishingSwitzerland2014 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpart of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped.Exemptedfromthislegalreservationarebriefexcerpts inconnectionwithreviewsorscholarlyanalysisormaterialsuppliedspecificallyforthepurposeofbeing enteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthework.Duplication ofthispublicationorpartsthereofispermittedonlyundertheprovisionsoftheCopyrightLawofthe Publisher’s location, in its current version, and permission for use must always be obtained from Springer.PermissionsforusemaybeobtainedthroughRightsLinkattheCopyrightClearanceCenter. ViolationsareliabletoprosecutionundertherespectiveCopyrightLaw. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. While the advice and information in this book are believed to be true and accurate at the date of publication,neithertheauthorsnortheeditorsnorthepublishercanacceptanylegalresponsibilityfor anyerrorsoromissionsthatmaybemade.Thepublishermakesnowarranty,expressorimplied,with respecttothematerialcontainedherein. Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) Preface This book deals with different topics on communication, language, and decisions within the field of economics and markets. The chapters give insights into new aspects of economic processes and are reflecting economics in a particular newway. It is argued that in markets most of the transactions are embedded in multiple communicational processes (Chaps. 4 and 6). This is no cheap talk, but highly relevant for determining supply and demand (Chaps. 2, 6, and 7). Relevance and acceptation of new products in dynamic markets, for example, get launched by advertisingandpromotion,whichistheverybranchofaneconomicsofpersuasion. Themarketsarenotonlystringedbynetworks(Chap.2)andstabilizedbyinstitu- tions (formal and informal ones) (Chaps. 2 and 5), but also overwhelmed by ‘semiosphere’ (seeChap.6),semantical andsemioticalfields,producing different meanings,relevanciesandintents. Witten,Germany BirgerP.Priddat 20October2013 v . Contents 1 TheNewPopulationofEconomics:Multiple,Fair,Ignorantand EmotionalActors.HowAretheMarketsOrderedinAccordance withDiversifiedKnowledgeBases?. . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Many“I”’s. . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . .. . 3 1.2 TheModern“I”:InaLanguageGame. . . . . . . . . . . . . . . . . . . . . 9 1.3 EmbeddedIndividuals:Networks. . . . . . . . . . . . . . . . . . . . . . . . 12 1.4 NewDynamics. . .. . . . . . .. . . . . .. . . . . . .. . . . . . .. . . . . .. . 14 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 2 MutualandSelf-EnforcingAgreements.ContractsastheBasic InstitutionofEconomics:NetworkKnowledgeInsteadofRational Choice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.1 MutualityofAdvantage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 2.2 ContractualProcesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 2.3 FromChoicetoContract(I)fromContracttoCooperation(II). . . 31 2.4 SummaandAmplifications:ContractsandNetwork Environments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 3 Morals:Restrictions,Metapreferences:AdjustinganEconomics ofMorality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 3.1 MoralsasRestriction:G.S.Becker’s‘EconomicApproach’. . . . . 39 3.2 MoralityasMetapreference:A.Senetal.. . . . . . . . . . . . . . . . . . 45 3.2.1 ‘BeliefSystems’,CommunicationandChanging Preferences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 3.2.2 PreferenceandSemantic. . . . . . . . . . . . . . . . . . . . . . . . . 51 3.3 MoralityasResource. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 vii viii Contents 4 CommunicationoftheConstraintsonActionK.J.Arrow onCommunication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 4.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 4.2 ‘Judgement’Versus‘RationalChoice’. . . . . . . . . . . . . . . . . . . . . 65 4.3 ‘Probabilities’,‘CommonExperience’and‘Convergence ofBeliefs’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 4.4 CommunicationasLearningProcess. . . . . . . . . . . . . . . . . . . . . . 71 4.5 CommunicationasMechanismandInterpretation. . . . . . . . . . . . 73 4.6 Arrow’sScepticism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 4.7 CommunicationasEquilibriumoftheSecondOrder. . . . . . . . . . 77 4.8 ContextNeutralityofCommunication. . . . . . . . . . . . . . . . . . . . . 79 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 5 CommunicationasInterpretationofEconomicContexts: TheExampleofCultureandEconomy:D.C.North. . . . . . . . . . . . . 85 5.1 CultureasInstitutions:D.C.North. . . . . . . . . . . . . . . . . . . . . . . 87 5.2 DeficitofConception:TheUnexplainedSemanticDimension. . . 91 5.3 StabilityandContingence:ConsequencesfortheConstruction ofEconomicTheory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 6 LudonarrativeDissonance:EconomyasaDiversifiedLanguage GameLandscape. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 6.1 ForExample:“Stocks”inEandD. . . . . . . . . . . . . . . . . . . . . . . 108 6.2 TheDifferenceBetweenEandD. . . . . . . . . . . . . . . . . . . . . . . . 111 6.3 EverydayTheories:TH(D). . .. . . .. . . .. . . .. . . . .. . . .. . . .. 114 6.4 Consequences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 7 Rationality,Hermeneutics,andCommunicationalProcesses. OnL.Lachmann’sApproachofHermeneuticalEconomics. . . . . . . 127 7.1 TheHermeneuticalApproachofLudwigM.Lachmann. . . . . . . . 127 7.2 FurtherEvidencesonHermeneuticalEconomics. . . . . . . . . . . . . 131 7.3 SomeEpistemologicalProblems. . . . . . . . . . . . . . . . . . . . . . . . . 134 7.4 SomeCriticsofHermeneuticalEconomics. . . . . . . . . . . . . . . . . 138 7.5 From‘Intersubjectivity’to‘Communication’. . . . . . . . . . . . . . . . 139 7.6 PossibleConsequences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Chapter 1 The New Population of Economics: Multiple, Fair, Ignorant and Emotional Actors. How Are the Markets Ordered in Accordance with Diversified Knowledge Bases? Weassociateeconomicswithindividualsactingrationallyincompetitivemarkets, who, so to speak, provide its Basic Law. The rationality attributed to the actors consists less, however, in their individual competence than in the disposition to achieve the best results for themselves in their exchange transactions.-and this is based on mutual agreement between the parties. Transactions rest upon contracts andcontracts,inturn,restuponcongruenceandconsensus. Thefactthatweestablishthisconsensusinaroutine,automatic,almostuncon- sciousfashionineverypurchaseorsalesagreementdoesnotdispenseusfromthe need to take its structure as a form of mutual agreement into account. What is at issue is not the best an individual can wish for, but the best that can be achieved underthecompetitiveconditionsofatransaction.Inthissenseitisthetendencyto maximize personal benefit, limited by what the market yields – and this means ultimatelythatanotheractormustagreetothetransaction.Rationalityasindividual rationalityisnotinitselfaneconomicconcept;onlywhenabilateraltransactionhas beenperformedcanwespeakofaneconomicevent.Ifwewishtogiverationality aneconomicmeaningwemustspeakofthesuccessfulcoherenceoftwoindividual rationalities; it is exclusively a matter of systemic interference and not of exclu- sivelyindividualactionsanddecisions.Inthissenseindividualrationalityisalways alreadylimitedbyatransactionprocedureinwhichtwoactorsmustbesuccessfulat the same time. This is the fundamental basis of the idea of balance. The general balanceconsistsinthesumofallsuccessfultransactions. But in the last 20 years economic behavioural research has demonstrated the existence of so many anomalies, deviations and irrationalities that these can no longer be seamlessly covered by the assumption of individuals taking rational decisions.Itisinthemeantimeregardedasanestablishedfactthatindividualsdo not, for example, approve of unfair behaviour. If they feel disadvantaged they prefertoforgotheoptimizationoftheirownbenefitinordertopunishunfairactors. Other forms of consideration are reciprocity, altruism etc. (e.g. Fehr and Fischbacher2004;Fruehwald2009);additionalemotionalformscomefromstudies in neuroeconomics (Frith and Singer 2008; Kabalak and Priddat 2010). Accord- ingly,individualbenefitmaximizationisaccompaniedbyotherbehaviouralforms, B.P.Priddat,CommunicationandEconomicTheory,EthicalEconomy47, 1 DOI10.1007/978-3-319-06901-2_1,©SpringerInternationalPublishingSwitzerland2014
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