Where are the big bills? Escaping the endogenizer�s dilemma

• Autores: Adam G. Martin
• Localización: Review of Austrian Economics, ISSN-e 1573-7128, Vol. 27, Nº. 1, 2014, págs. 81-95
• Idioma: inglés
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• Resumen

  • The continual expansion of rational choice theory to a greater range of social phenomena�from markets to politics and institutions�is a testament to its success. Each further application, however, simultaneously forecloses a potential source of inefficiency in economic systems. Abdicating efficiency considerations impairs economics� explanatory power as much as its normative relevance. In this paper I explore the interconnected roles of subjectivism and knowledge problems in accounting for inefficiency. I conclude that the knowledge-generating properties of institutions allow for efficiency comparisons, but only in the embrace of a thoroughgoing subjectivism.