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Model uncertainty and the rationality of economic policy


  • Jan Schnellenbach



This paper examines the process of economic policy-making under conditions of model uncertainty. A median voter model is introduced in which the electorate is uncertain of the policy measures available as well as their respective outcomes and opinion formation is a social process of communication and contagion. Learning from experience is also considered. It is shown that economic policy-making under uncertainty produces novel policy routines, but that a mechanism of efficiently utilising the generated knowledge is missing. Copyright Springer-Verlag Berlin/Heidelberg 2004

Suggested Citation

  • Jan Schnellenbach, 2004. "Model uncertainty and the rationality of economic policy," Journal of Evolutionary Economics, Springer, vol. 15(1), pages 101-116, January.
  • Handle: RePEc:spr:joevec:v:15:y:2004:i:1:p:101-116 DOI: 10.1007/s00191-004-0231-y

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    References listed on IDEAS

    1. Jovanovic, Boyan & MacDonald, Glenn M, 1994. "The Life Cycle of a Competitive Industry," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 322-347, April.
    2. Freeman, Chris & Louca, Francisco, 2002. "As Time Goes By: From the Industrial Revolutions to the Information Revolution," OUP Catalogue, Oxford University Press, number 9780199251056, June.
    3. Klepper, Steven & Simons, Kenneth L, 1997. "Technological Extinctions of Industrial Firms: An Inquiry into Their Nature and Causes," Industrial and Corporate Change, Oxford University Press, vol. 6(2), pages 379-460, March.
    4. Andrea Prencipe & Stefano Brusoni, 2005. "Making Design Rules: A Multi-Domain Perspective," SPRU Working Paper Series 136, SPRU - Science and Technology Policy Research, University of Sussex.
    5. Achilladelis, Basil & Schwarzkopf, Albert & Cines, Martin, 1990. "The dynamics of technological innovation: The case of the chemical industry," Research Policy, Elsevier, vol. 19(1), pages 1-34, February.
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    Cited by:

    1. Schnellenbach, Jan, 2012. "Nudges and norms: On the political economy of soft paternalism," European Journal of Political Economy, Elsevier, vol. 28(2), pages 266-277.
    2. Schnellenbach Jan, 2008. "Rational Ignorance is not Bliss: When do Lazy Voters Learn from Decentralised Policy Experiments?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(4), pages 372-393, August.
    3. Nathalie Lazaric & Kevin Maréchal, 2010. "Overcoming inertia: insights from evolutionary economics into improved energy and climate policy," Post-Print hal-00452205, HAL.


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