Three essays on rationality, intentionality and economic agency
Faulkner, Philip Bernard
University of Cambridge
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Faulkner, P. B. (2003). Three essays on rationality, intentionality and economic agency (doctoral thesis).
The central theme of this dissertation is the contribution that the theory of human ontology developed by the philosopher John SearIe can make to economics. SearIe's account of the cognitive functioning associated with rational behaviour provides a framework within which to analyse the role of conscious and non-conscious factors in rational behaviour; the nature and functioning of discursive and tacit knowledge; and the distinction between intentional and non-intentional states. Using this framework, each of the three essays which make up the core of this dissertation examines aspects of the conception of economic agency associated with a different field in economics; critical realism, behavioural finance and mainstream microeconomics. The first essay, which looks at the critical realist conception of the human actor in Tony Lawson 's Economics and Reality, argues that Lawson leaves undeveloped the notion of tacit knowledge, failing to explain important differences between knowledge that functions by virtue of conscious reflection and that which functions tacitly. From a SearIean perspective the key omission is argued to be the technical notion of intentionality, upon which SearIe develops an account of tacit knowledge. I show how this notion of intentionality evades my criticism of Lawson. The second essay examines the conception of agency associated with behavioural finance from the perspective of the human ontology proposed by Searle. The principle theme of the essay is that each of the psychological traits that behavioural finance draws on, namely prospect theory, judgmental heuristics and mental accounting, involves the interplay of both conscious and non-conscious factors. Consequently the agent of behavioural finance is a construction that is readily intelligible in SearIean terms. I argue that this finding leads to a conception of the rationality of the agent encountered in the behavioural finance literature that is quite different from the way in which it is commonly presented. The mainstream microeconomic conception of the human actor is the focus of the final essay, in which it is argued that the treatment of human knowledge on this approach neglects a number of important factors in economic behaviour. The first half of the essay uses a simple Cournot duopoly game under conditions of complete and incomplete information in order to highlight the usual assumptions about actors ' knowledge in mainstream models. On the basis of these findings the second half of the essay then considers three aspects of human agency that these models neglect: non-probabilistic forms of unceltainty and ignorance, the subjectivity of knowledge and the role of tacit knowledge.
ESRC; Rothschild / Newton Trust Bursary.
This record's URL: http://www.repository.cam.ac.uk/handle/1810/244841