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Naturalizing Institutions: Evolutionary Principles and Application on the Case of Money

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  • Herrmann-Pillath Carsten

    () (Frankfurt School of Finance & Management gemeinnützige GmbH, Academic Director, East-West Centre for Business Studies and Cultural Science, and Master of International Business Programme, Sonnemannstrasse 9-11, 60314 Frankfurt a.M., Germany)

Abstract

In recent extensions of Darwinism into economics, the replicator-interactor duality looms large. I propose a naturalistic approach to this duality in the context of the theory of institutions, which means that its use is necessarily dependent on identifying a physical realization. I introduce a general framework, which synthesizes Searle’s and Aoki’s theories, especially with regard to the role of public representations (signs) in the coordination of actions, and the function of cognitive processes that underlie rule-following as a behavioural disposition. Institutions are causal circuits that connect the population-level dynamics of interactions with cognitive phenomena on the individual level which ultimately root in neuronal structures. I propose a new conceptualization of the replicator in the context of institutions: the replicator is a causal conjunction between (physical) signs and neuronal structures which undergirds the dispositions that generate rule-following actions. Signs, in turn, are outcomes of population-level interactions. I apply this framework on the case of money, analysing the emotions that go along with the use of money, and presenting a stylized account of the emergence of money in terms of the naturalized Searle-Aoki model. In this view, money is a neuronally anchored sign for emotions relating with social exchange and reciprocity. The money replicator is physically realized in a causal conjunction of money artefacts and money emotions.

Suggested Citation

  • Herrmann-Pillath Carsten, 2014. "Naturalizing Institutions: Evolutionary Principles and Application on the Case of Money," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 388-421, April.
  • Handle: RePEc:jns:jbstat:v:234:y:2014:i:2-3:p:388-421
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    Cited by:

    1. Inklaar, Robert & Koetter, Michael & Noth, Felix, 2012. "Who's afraid of big bad banks? Bank competition, SME, and industry growth," Frankfurt School - Working Paper Series 197, Frankfurt School of Finance and Management.
    2. Dietmar Harhoff & Elisabeth Mueller & John Reenen, 2014. "What are the Channels for Technology Sourcing? Panel Data Evidence from German Companies," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 204-224, March.
    3. Boeing, Philipp & Mueller, Elisabeth & Sandner, Philipp, 2012. "What makes Chinese firms productive? Learning from indigenous and foreign sources of knowledge," Frankfurt School - Working Paper Series 196, Frankfurt School of Finance and Management.
    4. Alexander Libman & Vladimir Kozlov & André Schultz, 2012. "Roving Bandits in Action: Outside Option and Governmental Predation in Autocracies," Kyklos, Wiley Blackwell, vol. 65(4), pages 526-562, November.
    5. Böing, Philipp & Müller, Elisabeth, 2012. "Technological Capabilities of Chinese Enterprises: Who is Going to Compete Abroad?," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62081, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Generalized Darwinism; institutions; replicator/interactor; Searle; Aoki; naturalism; memes; emotions; money;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • Z1 - Other Special Topics - - Cultural Economics

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