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Hodgson, Cumulative Causation, and Reflexive Economic Agents

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  • Davis, John B.

    () (Department of Economics Marquette University)

Abstract

This paper examines Geoff Hodgson’s interpretation of Veblen in agency-structure terms, and argues it produces a conception of reflexive economic agents. It then sets out an account of cumulative causation processes using this reflexive agent conception, modeling them as a two-part causal process, one part involving a linear causal relation and one part involving a circular causal relation. The paper compares the reflexive agent conception to the standard expected utility conception of economic agents, and argues that on a cumulative causation view of the world the completeness assumption essential to the standard view of rationality cannot be applied. The final discussion addresses the nature of the choice behavior of reflexive economic agents, using the thinking of Amartya Sen and Herbert Simon to frame how agents might approach choice in regard to each of the two different parts of cumulative causal processes, and closing with brief comments on behavioral economics’ understanding of reference dependence and position adjustment.

Suggested Citation

  • Davis, John B., 2016. "Hodgson, Cumulative Causation, and Reflexive Economic Agents," Working Papers and Research 2016-05, Marquette University, Center for Global and Economic Studies and Department of Economics.
  • Handle: RePEc:mrq:wpaper:2016-05
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    File URL: http://epublications.marquette.edu/econ_workingpapers/55
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    Keywords

    Hodgson; Veblen; cumulative causation; reflexive agents; completeness assumption;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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