How Do You Know? The Economics of Ordinary Knowledge

How Do You Know? The Economics of Ordinary Knowledge

How Do You Know? The Economics of Ordinary Knowledge

How Do You Know? The Economics of Ordinary Knowledge

Excerpt

We often say of someone's action that it is irrational. I wish to take a charitable view and suppose that people are not generally irrational according to their own assessments of what they are doing. They may seem to be irrational according to some second-party assessment of even a putatively objective account of their interests, and of the means to achieve their ends. There are two general obstacles to bringing a person's subjective rationality into line with any such objective assessment of rationality. First, in contexts of interactive choice, the connection between one's action and the outcome one gets is indeterminate. I analyze this issue in a recent book, Indeterminacy and Society. A second general obstacle to achieving objective rationality is that one's knowledge base for making good—meaning objectively rational—decisions is commonly inadequate. The first issue is a problem of the world that we face; the second is a problem of our individual capacities. Here I address this second issue: the knowledge base of the ordinary person making choices.

For explaining human behavior and choice we need an economic theory of knowledge, meaning economic in a very broad and even loose sense. The theory would not be about what the philosophical epistemologist's criteria for truth claims should be, but rather about why we come to know what we know or believe. We can use such a theory to make sense of many behaviors and beliefs, such as religious, moral, and pragmatic beliefs, and of limits on popular knowledge of science. In politics, such a theory makes sense of some aspects of liberalism, cultural commitments, extremism, and voters' lack of knowledge, and it undercuts the median-voter model of party positions in a democracy. Here I present a theory of ordinary knowledge and then apply it to many contexts. Such a theory can explain many seemingly systematic failures of individual choice.

The issue addressed in Indeterminacy and Society is the complication that, in contexts of interactive choice as mentioned above, the connection between one's action and the outcome one gets commonly is indeterminate. In strategic interactions, you cannot determine your outcome simply by choosing it from a range of possibilities. You can choose only a strategy, not an outcome. All that you determine with your strategy choice is some constraints on the possible array of outcomes you might get. To narrow this array to a single outcome requires action from you and perhaps many others. You commonly cannot know what is the best strategy choice . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.