Markets vs. Government when Rationality is Unequally Bounded: Some Consequences of Cognitive Inequalities for Theory and Policy
AbstractRecognizing that human rationality has bounds that are unequal across individuals entails treating it as a special scarce resource, tied to individuals and used for deciding on its own uses. This causes a meta-mathematical difficulty to the axiomatic theories of human capital and resource allocation, and raises a new problem for comparative institutional analysis, allowing it to explain some so far little understood differences between markets and government. The policy implications strengthen the case against national planning, selective industrial policies, and government ownership of enterprises, but weaken the case against paternalism. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Walter Eucken Institut e.V. in its series Freiburg Discussion Papers on Constitutional Economics with number 06/5.
Date of creation: 2006
Date of revision:
Contact details of provider:
Postal: Goethestrasse 10, D-79100 Freiburg im Breisgau
Web page: http://www.walter-eucken-institut.de/
More information through EDIRC
Rationality; meta-mathematics; institutions; markets; government;
Find related papers by JEL classification:
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- A10 - General Economics and Teaching - - General Economics - - - General
- H10 - Public Economics - - Structure and Scope of Government - - - General
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Boland, Lawrence A, 1981. "On the Futility of Criticizing the Neoclassical Maximization Hypothesis," American Economic Review, American Economic Association, American Economic Association, vol. 71(5), pages 1031-36, December.
- Pelikan, Pavel, 2007. "Public Choice with Unequally Rational Individuals," Freiburg Discussion Papers on Constitutional Economics 07/2, Walter Eucken Institut e.V..
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.