Rational-choice hermeneutics

Abstract

Rational choice and hermeneutics seem at odds, but the tension can be fruitfully resolved. The conflict between them closely mirrors the earlier conflict between historicism and positivism. In inter-war Vienna, an influential group of social scientists tried to combine the best elements of both approaches. Rational choice was united with Verstehen and the method of ideal types, as evidenced by the works of Lionel Robbins and Alfred Schutz, among others. Although the two methodologies have again diverged, it is possible to merge them. Drawing on the insights of Alfred Schutz, this article constructs a framework for modern rational-choice hermeneutics.

The rules of abstraction

“…Koppl and Whitman (2004), drawing on the ideal-type analysis of Schutz (1932), observe that models of human behavior can be placed on a spectrum of "anonymity." A model with low anonymity makes very specific assumptions about the characteristics of the people modeled; the least anonymous model would attempt to predict the behavior of just one person-say, Napoleon (Koppl and Whitman 2004, p. 302).…”

Institutions as Knowledge Capital: Ludwig M' Lachmann's Interpretative Institutionalism

“…Tacit knowledge may also play an important role in human action. Relatedly, it may be the case that the notion of plan in Lachmann loses the anonimity property that is instead a useful heuristic expedient of the Weberian ideal type (see Koppl [1994] and Koppl and Whitman [2004]). This notwithstanding, our primary objective here is to attempt to read Lachmann on his own terms, that is, we are trying to use the interpretative method on Lachmann himself: Lachmann saw himself as trying to bring back in purposeful human agency in a discipline that (he saw) was losing it.…”

“…Thus, our expectations are broad and open-ended, waiting to be "filled out" as time goes by (cf. also O'Driscoll and Rizzo, 1985 Koppl and Whitman (2004) demonstrate that in economics the hermeneutic and the rational choice approach are not only perfectly compatible but also complementary.…”

Analysis of energy efficiency improvement and climate change mitigation policy in Lithuania

“…The 1970s oil crisis and the inevitable lack of energy accounted for the main reason which prompted the examination of household energy consumption. Currently, in the world economy science development an important role plays a behavioral economics research, dedicated for insight of the irrational behavior of market (Brekke and JohanssonStenman [1]; Maibach et al [2]; Akerlof and Shiller [3]; Elster [4]; Gatersleben et al [5]; Stern [6]; Lutzenhiser [7]; Tonglet et al [8]; Jager [9]; Howard and Shetch [10]; Koppl and Whitman [11]; Lee [12]). In climate change mitigation economy a great attention is given to behavioral economics and to psychology area (Marechal [13]; Brown [14]; Oikkonomou et al [15]; Poortiga et al [16]; Uzzel and Rathzel [17].…”