IDEAS home Printed from https://ideas.repec.org/p/hpo/wpaper/1_2017.html
   My bibliography  Save this paper

The Role of Agents’ Propensity toward Conformity and Independence in the Process of Institutional Change

Author

Listed:
  • Angela Ambrosino

Abstract

This paper analyses institutional change and Veblen’s work (1907, 1914, 1919) under the perspective of cognitive economics. Particularly it focuses on two interesting issues of Veblen’s theory of economic change: 1. in Veblen’s view habits are both mental habits and behavioral habits and they play a twofold role in economic change because they are particularly relevant both as elements of propensity, and as forces resisting to change. 2 Veblen gives an exhaustive definition of instincts and habits but he does not completely explain the cognitive processes that bring changes and evolution in social habits. He develops an economic theory at the base of which there is an evolutionary view of reality and a deep awareness of the role of the human mind within the decision-making processes of choice. This paper is aimed at analyzing both issues using the interpretive tools offered by psychology and discussing the role of agents psychological propensity toward conformity and independence in explaining institutional change. The central idea is that if we better encompass the theory of conformity and independence developed in psychology (starting from Asch, 1952) in the analysis of economic institutions, we can better explain institutional change. Conformity is the effect of the pressure of social group on agents’ behavior. That concept contributes to explain resistance to change. On the other hand, psychology shows that agents are also subject to mechanisms of independence. These are key elements in explaining behavioral change. The analysis of Veblen’s instinct-habit concept under conformity-independence perspective shows interesting connections between Veblen and Hayek’s ideas of economic change. Hayek’s concept of evolution based on psychological and neurobiological aspect, in fact, is a contribution of great significance both in explaining the dual role of habits in institutional change and in understanding individual mechanisms that bring changes in social habits.

Suggested Citation

  • Angela Ambrosino, 2017. "The Role of Agents’ Propensity toward Conformity and Independence in the Process of Institutional Change," STOREPapers 1_2017, Associazione Italiana per la Storia dell'Economia Politica - StorEP.
  • Handle: RePEc:hpo:wpaper:1_2017
    as

    Download full text from publisher

    File URL: http://www.storep.org/wp/wp-content/uploads/2017/02/WP-1-2017.pdf
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thorstein Veblen, 1909. "The Limitations of Marginal Utility," Journal of Political Economy, University of Chicago Press, vol. 17, pages 620-620.
    2. Crusius, Jan & van Horen, Femke & Mussweiler, Thomas, 2012. "Why process matters: A social cognition perspective on economic behavior," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 677-685.
    3. Dequech, David, 2013. "Economic institutions: explanations for conformity and room for deviation," Journal of Institutional Economics, Cambridge University Press, vol. 9(1), pages 81-108, March.
    4. Klick, Jonathan & Parisi, Francesco, 2008. "Social networks, self-denial, and median preferences: Conformity as an evolutionary strategy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(4), pages 1319-1327, August.
    5. Ambrosino, Angela, 2009. "Institutions as game theory outcomes: toward a cognitive-experimental inquiry," MPRA Paper 42752, University Library of Munich, Germany, revised 2013.
    6. Rutherford, Malcolm, 2000. "Understanding Institutional Economics: 1918–1929," Journal of the History of Economic Thought, Cambridge University Press, vol. 22(3), pages 277-308, September.
    7. Veblen, Thorstein, 1909. "The Limitations of Marginal Utility," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 17.
    8. Asso, Pier Francesco & Fiorito, Luca, 2004. "Human Nature and Economic Institutions: Instinct Psychology, Behaviorism, and the Development of American Institutionalism," Journal of the History of Economic Thought, Cambridge University Press, vol. 26(4), pages 445-477, December.
    9. Carpenter, Jeffrey P., 2004. "When in Rome: conformity and the provision of public goods," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 33(4), pages 395-408, September.
    10. Beraldo, Sergio & Filoso, Valerio & Marco, Stimolo, 2013. "Endogenous Preferences and Conformity: Evidence From a Pilot Experiment," MPRA Paper 48539, University Library of Munich, Germany.
    11. William T. Waller, 1988. "The Concept of Habit in Economic Analysis," Journal of Economic Issues, Taylor & Francis Journals, vol. 22(1), pages 113-126, March.
    12. Thorstein Veblen, 1907. "The Socialist Economics of Karl Marx and his Followers," The Quarterly Journal of Economics, Oxford University Press, vol. 21(2), pages 299-322.
    13. Geoffrey M. Hodgson, 2000. "What Is the Essence of Institutional Economics?," Journal of Economic Issues, Taylor & Francis Journals, vol. 34(2), pages 317-329, June.
    14. Rutherford,Malcolm, 1996. "Institutions in Economics," Cambridge Books, Cambridge University Press, number 9780521574471.
    15. Geoffrey M. Hodgson, 1998. "The Approach of Institutional Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 166-192, March.
    16. Egidi Massimo & Rizzello Salvatore, 2003. "Cognitive economics: Foundations and historical evolution," CESMEP Working Papers 200304, University of Turin.
    17. Angela Ambrosino, 2014. "A Cognitive Approach to Law and Economics: Hayek's Legacy," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(1), pages 19-48.
    18. Walker, Donald A, 1977. "Thorstein Veblen's Economic System," Economic Inquiry, Western Economic Association International, vol. 15(2), pages 213-237, April.
    19. J. M. Clark, 1918. "Economics and Modern Psychology: II," Journal of Political Economy, University of Chicago Press, vol. 26, pages 136-136.
    20. Leathers, Charles G., 1990. "Veblen and Hayek on Instincts and Evolution," Journal of the History of Economic Thought, Cambridge University Press, vol. 12(2), pages 162-178, October.
    21. Ambrosino, Angela, 2016. "Heterogeneity and law: toward a cognitive legal theory," Journal of Institutional Economics, Cambridge University Press, vol. 12(2), pages 417-442, June.
    22. Meub, Lukas & Proeger, Till, 2014. "An experimental study on social anchoring," University of Göttingen Working Papers in Economics 196, University of Goettingen, Department of Economics.
    23. Di Giovinazzo, Viviana & Naimzada, Ahmad, 2012. "… Do as the Romans do. A model of conformity with the endogenous formation of preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 654-658.
    24. Caldwell, Bruce, 2000. "The Emergence of Hayek's Ideas on Cultural Evolution," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 13(1), pages 5-22, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meub, Lukas & Proeger, Till, 2014. "An experimental study on social anchoring," University of Göttingen Working Papers in Economics 196, University of Goettingen, Department of Economics.
    2. Angela Ambrosino & Magda Fontana & Anna Azzurra Gigante, 2018. "Shifting Boundaries In Economics: The Institutional Cognitive Strand And The Future Of Institutional Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 767-791, July.
    3. David Dequech, 2005. "Institutions: A Concept For A Theory Of Conformity And Innovation," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 174, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    4. Damien Talbot, 2000. "Institutional Dynamics and Localized Inter-Firm Relations," Post-Print hal-02375061, HAL.
    5. Shinji Teraji, 2017. "Understanding coevolution of mind and society: institutions-as-rules and institutions-as-equilibria," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 16(1), pages 95-112, November.
    6. Atsebi, Jean-Marc Bédhat & Ferrer-i-Carbonell, Ada, 2019. "Relative Deprivation in Tanzania," IZA Discussion Papers 12719, Institute of Labor Economics (IZA).
    7. Naoise McDonagh, 2021. "Credit Guidance for a Desired Economy: An Original Institutional Economics Critique of Financialization," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(4), pages 675-693, December.
    8. Ambrosino, Angela & Fontana, Magda & Gigante, Anna Azzurra, 2015. "Shifting Boundaries in Economics: the Institutional Cognitive Strand," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201544, University of Turin.
    9. Ligang Song & Chérie Simpson, 2018. "Linking “adaptive efficiency” with the basic market functions: A new analytical perspective for institution and policy analysis," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(3), pages 544-557, September.
    10. Theofanis Papageorgiou & Ioannis Katselidis & Panayotis G. Michaelides, 2013. "Schumpeter, Commons, and Veblen on Institutions," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(5), pages 1232-1254, November.
    11. Felipe Almeida, 2016. "Society and brain: A complementary approach to Thorstein Veblen’s conspicuous consumer based on Tibor Scitovsky’s neuropsychology [Society and brain: A complementary approach to Thorstein Veblen’s con," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 26(2), pages 347-367, May-Augus.
    12. Christian Cordes, 2014. "There are several ways to incorporate evolutionary concepts into economic thinking," Papers on Economics and Evolution 2014-02, Philipps University Marburg, Department of Geography.
    13. Hüsnü BİLİR, 2018. "Commons ve Mitchell’in “İktisat” ve “Birey” Anlayışları," Sosyoekonomi Journal, Sosyoekonomi Society, issue 26(37).
    14. Essiane, Patrick-Nelson Daniel, 2020. "De l'Ancienne Economie Institutionnelle à la Nouvelle Economie Institutionnelle: une introduction à quelques débats [Old Institutional Economics and New Institutional Economics: an Introduction to ," MPRA Paper 102858, University Library of Munich, Germany.
    15. Duarte N. Leite & Sandra T. Silva & Oscar Afonso, 2014. "Institutions, Economics And The Development Quest," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 491-515, July.
    16. Dieter Bögenhold & Panayotis G. Michaelides & Theofanis Papageorgiou, 2021. "Schumpeter, Veblen, and Bourdieu on Institutions and the Formation of Habits," Springer Books, in: Neglected Links in Economics and Society, chapter 0, pages 233-259, Springer.
    17. Vicente Ferreira, 2019. "Why Economics Must be an Evolutionary Science," Working Papers Department of Economics 2019/01, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    18. Noriko Ishida, 2021. "Thorstein Veblen on economic man: toward a new method of describing human nature, society, and history," Evolutionary and Institutional Economics Review, Springer, vol. 18(2), pages 527-547, September.
    19. Drakopoulos, Stavros A. & Katselidis, Ioannis, 2021. "The Old Institutional School and Labour Market Functions and Policies," MPRA Paper 110794, University Library of Munich, Germany.
    20. Philippe DULBECCO & DUTRAIVE, 1997. "The Meaning of Market : Comparing Austrian and Institutional Economics," Working Papers 199713, CERDI.

    More about this item

    Keywords

    Institutional change; old institutional economics; cognitive economics; Veblen; Hayek;
    All these keywords.

    JEL classification:

    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hpo:wpaper:1_2017. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aisepea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mario Aldo Cedrini (email available below). General contact details of provider: https://edirc.repec.org/data/aisepea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.