Tuesday, June 12, 2012

institutional/psychological economics

Let me admit up front that I'm still very ignorant on the topic and that this post is more of a request for information than any sort of accurate presentation of something...

So, in the first half of the 20th century was an institutionalist movement in American economics. This school of thought was characterized by descent from the neoclassical school in favor of an empirically-based focus on human institutions. Many members were educated within the German historical school of the period, and brought those ideas about data-driven science and belief in the impossibility of generally-applicable theory back home.

Allegedly, there was at the time a great deal of crossover with psychologists and sociologists and the institutional economic school. There was a great deal of empirical sociology at the time, so their observation-based studies of, for example, household consumption, were compatible with institutional economic observational studies of, for example, the coal industry.

"Modern psychology" at the time emphasized habit, instinct, and that sort of evolutionary view of behavior. The institutionalists allegedly wanted their worldview to be compatible with psychology. But it's not at all clear to me how these evolutionary ideas about psychology influenced institutionalist research. What was the crossover? Who were the major psychologists who did economics research during that period? Was it all well-intentioned empirical work that didn't get around to tying results to psychological theory, or was there a real attempt along those lines?

Anyone know? I'm planning to look up a few authors that might lead in the right direction, or just ask Malcolm Rutherford again if I see him (I didn't really ask the right question the first time I tried, or I didn't follow all of his answer, or something, so I'm still confused) but maybe someone is secretly an economic historian who reads this...

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