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

  • Carsten Herrmann-Pillath

    ()

    (Frankfurt School of Finance and Management)

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.

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Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 234 (2014)
Issue (Month): 2-3 (April)
Pages: 388-421

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Handle: RePEc:jns:jbstat:v:234:y:2014:i:2-3:p:388-421
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