Elisabeth Allgoewer
elisabeth.allgoewer@wiso.uni-hamburg.de
Fall term 2011/12
office hour: Thursday, 14.30-16.00, Room 2108 (VMP 5), please sign up via sekretariat-iwwt@wiso.uni.hamburg.de
Rolf von Lüde
rolf.luede@wiso.uni-hamburg.de
office hour: Wednesday, 11.00, Room 303 (AP 1)
21.30.625 Interdisciplinary Seminar in Politics and Economics:
Versions of Rationality
Thursday, 12.15-14; (on Nov. 17 and Jan. 12 sessions will start at 12.30)
Room 0029, VMP 5
Workload: 12 cp = 360 h
Outline
Rationality of agents´ decisions and of market participants´ behavior is a central assumption in many
economic theories. How to theoretically conceptualize individual decisions and behavior especially under
conditions of risk and uncertainty is a recurring and controversial topic in the social sciences. The
implications of individuals´ behavior under risk and uncertainty for aggregate analysis are discussed just as
controversially. The aim of this seminar is to study differing positions on rational decisions and behavior in
sociology, economics and transdisciplinary contributions and to develop an understanding of these
different interpretations in the contemporary debate in the social sciences.
Course structure
The readings for each session are made available as pdf via STiNE. We expect participants to have
thoroughly read the articles in advance: they will be discussed during the session. Each session is prepared
by a seminar participant and introduced by a presentation of 20-30 minutes. The aim of the presentation is
to start the discussion in class. Since all participants have read the texts, do not summarize texts! Formulate
and explain 5 theses and/or questions, which take up the main controversial issues in the text(s) and
develop your thoughts on them so as to start the debate in class. Please prepare a handout (max. 2 pages)
and send it to all participants on the Wednesday afternoon before the session.
Course credits
 Presentation in class (“Referat”): 25 %
 Paper (“Hausarbeit”): 75 %
You can write your paper on any of the topics raised in the sessions in class. Please take the seminar
readings as starting point for the development of your paper topic. Papers will be supervised by Elisabeth
Allgoewer or Rolf von Lüde, depending on who was in charge in the respective seminar session. Both
professors will read and grade your paper. All seminar papers are due on March 15, 2012.
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Oct. 20 Introduction to the seminar topic, concept of the seminar, plan for the semester
Oct. 27 Rationality, Risk and Uncertainty
 Keynes, John Maynard (1936) The General Theory of Employment, Interest, and Money.
London: Macmillan. Chapter 12. The State of Long-Term Expectation, 147-164.
 Knight, Frank H. (1921) Risk, Uncertainty, and Profit. New York: Kelly. Part III, Chapter
VII: The Meaning of Risk and Uncertainty, 197-232.
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Nov. 03 Hayek on rationality
 Hayek, Friedrich A. (1945) The use of knowledge in society. American Economic Review
(35/4). 519-30.
 Smith, Vernon (2008) Rationality in Economics. Constructivist and Ecological Forms.
Cambridge: Cambridge University Press. Introduction, 1-11.
Nov. 10 Rationality and Emotion I
Elster, Jon (1999) Alchemies of the Mind. Rationality and the Emotions. Cambridge:
Cambridge University Press. Chapter IV.3, 283-331.
Nov. 17 Rationality in modern macroeconomic models
12.30
 Muth, John F. (1961) Rational expectations and the theory of price movements.
Econometrica 29 (3), 315-335. Especially 315-17.
 Maddock, Rodney and Michael Carter (1982) A child´s guide to rational expectations.
Journal of Economic Literature 20 (1), 39-51.
Nov. 24 Rationality and Emotion II: Animal Spirits
 Akerlof, George A., Robert J. Shiller (2009) Animal Spirits. How Human Psychology
Drives the Economy, and why it Matters for Global Capitalism. Princeton: Princeton
University Press.
 DiMaggio, Paul (2002): Endogenizing „Animal Spirits“: Toward a Sociology of Collective
Response to Uncertainty and Risk. In: Mauro F. Guillén, Randall Collins, Paula England, and
Marshall Meyer (Eds): The New Economic Sociology. Developments in an Emerging Field.
New York: Russell Sage, 79 -100.
Dec. 01 Rationality in economic models reconsidered
Hollis, Martin and Sugden, Robert (1993) Rationality in action. Mind, New Series, Vol. 102,
No. 405 (Jan), 1-35.
Dec. 08 Cultural Embeddedness
 DiMaggio, Paul (1997) Culture and Cognition. Annual Review of Sociology 23, 263–87.
 Dequech, David (2003) Cognitive and Cultural Embeddedness: Combining Institutional
Economics and Economic Sociology. Journal of Economic Issues, Vol. 37, No. 2 (Jun., 2003),
461-470.
Dec. 15 Does money illusion matter?
Fehr, Ernst, Tyran, Jean-Robert (2005) Individual irrationality and aggregate outcomes. The
Journal of Economic Perspectives, Vol. 19, No. 4 (Fall), 43-66.
Dec. 22 Rational Actors or Rational Fools?
Slovic, Paul et al. (2002) Rational Actors or Rational Fools? Implications of the Affect
Heuristic for Behavioral Economics. Working Paper (39 pp.)
Jan. 12 Fictionality in Economic Action
12.30
Jens Beckert (2011) Imagined Futures - Fictionality in Economic Action. Working Paper, Max
Planck Institute for the Study of Societies. Köln, March 2011.
Jan. 19 The Economic Sociology of Conventions I
Biggart, Nicole Woolsey and Thomas D. Beamish (2003) The Economic Sociology of
Conventions: Habit, Custom, Practice, and Routine in Market Order. Annual Review of
Sociolology 29, 443–64.
Jan. 26 The Economic Sociology of Conventions II
Laurent Thevenot (2002) Conventions of Co-Ordination and the Framing of Uncertainty. In:
Fullbrook, Edward, Intersubjectivity in Economics. Agents and structures. London etc.:
Routledge, 181-197.
Feb. 02 Conclusions
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