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The Impact of Institutions on the Decision How to Decide

Author

Listed:
  • Christoph Engel

    () (Max Planck Institute for Research on Collective Goods, Bonn)

  • Elke U. Weber

    () (Columbia University, Professor of Psychology and Management)

Abstract

The human mind is not a general problem solving machine. Instead of deliberately, consciously and serially processing the available information, men can rely on routines, rules, roles or affect for the purpose. They can bring in technology, experts or groups. For all of these reasons, men have a plurality of problem solving modes at their disposition. Often, the meta-choice of problem solving mode matters for behavioural output. Some performance standards are only to be met if a certain problem solving mode is used, like a well-established skill. Other requirements are easier to fulfil with some problem solving modes. This explains why institutions frequently impact on the choice of problem solving mode. To show how institutions are able to do that, a model of problem solving modes is developed. It allows to systematise the access points for institutional intervention.

Suggested Citation

  • Christoph Engel & Elke U. Weber, 2006. "The Impact of Institutions on the Decision How to Decide," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2006_19, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2006_19
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Christoph Engel & Wolf Singer, 2007. "Better Than Conscious? The Brain, the Psyche, Behavior, and Institutions," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2007_24, Max Planck Institute for Research on Collective Goods.
    2. Christoph Engel, 2007. "Institutions for Intuitive Man," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2007_12, Max Planck Institute for Research on Collective Goods.
    3. Weber, Elke U. & Johnson, Eric J., 2012. "Psychology and behavioral economics lessons for the design of a green growth strategy," Policy Research Working Paper Series 6240, The World Bank.
    4. Mieke Meurs, 2013. "What Makes a Farmer? The Limited Expansion of Commercial Farming Among Bulgarian Smallholders," Working Papers 2013-08, American University, Department of Economics.

    More about this item

    Keywords

    Decision Making; Problem Solving; Institutions;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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