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Rationality and institutions: reflections on Douglass North


  • Daunton, Martin


Douglass North questions the assumptions of ergodicity and economic rationality which came to dominate economics; this paper places the emergence of these notions in historical context. North stresses the role of institutions in dealing with a shift from uncertainties in the physical environment to uncertainties in the complex human environment of impersonal exchange. The paper explores the difficulties and weaknesses of his account of this change, focussing in particular on the case of Britain, and the themes of property rights, state structures and warfare.

Suggested Citation

  • Daunton, Martin, 2010. "Rationality and institutions: reflections on Douglass North," Structural Change and Economic Dynamics, Elsevier, vol. 21(2), pages 147-156, May.
  • Handle: RePEc:eee:streco:v:21:y:2010:i:2:p:147-156

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    References listed on IDEAS

    1. Smith, Adam, 1759. "The Theory of Moral Sentiments," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1759.
    2. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters,in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136 World Scientific Publishing Co. Pte. Ltd..
    3. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January.
    4. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530, June.
    5. Milgrom, Paul, 1981. "An Axiomatic Characterization of Common Knowledge," Econometrica, Econometric Society, vol. 49(1), pages 219-222, January.
    6. Cubitt, Robin P. & Sugden, Robert, 2003. "Common Knowledge, Salience And Convention: A Reconstruction Of David Lewis' Game Theory," Economics and Philosophy, Cambridge University Press, vol. 19(02), pages 175-210, October.
    7. repec:cup:apsrev:v:91:y:1997:i:02:p:245-263_20 is not listed on IDEAS
    8. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters,in: Understanding the Process of Economic Change Princeton University Press.
    9. Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, July.
    10. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, July.
    11. Arrow, Kenneth J, 1994. "Methodological Individualism and Social Knowledge," American Economic Review, American Economic Association, vol. 84(2), pages 1-9, May.
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