The sensory order, the economic imagination and the tacit dimension

Earl, Peter E. (2010). The sensory order, the economic imagination and the tacit dimension. In William N. Butos (Ed.), The social science of Hayek's 'The Sensory Order' (pp. 211-236) Bingley, United Kingdom: Emerald Group Publishing. doi:10.1108/S1529-2134(2010)0000013011

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Author Earl, Peter E.
Title of chapter The sensory order, the economic imagination and the tacit dimension
Formatted title
The Sensory Order, the economic imagination and the tacit dimension
Title of book The social science of Hayek's 'The Sensory Order'
Place of Publication Bingley, United Kingdom
Publisher Emerald Group Publishing
Publication Year 2010
Sub-type Research book chapter (original research)
DOI 10.1108/S1529-2134(2010)0000013011
Series Advances in Austrian Economics
ISBN 9781849509749
1849509743
ISSN 1529-2134
Editor William N. Butos
Volume number 13
Chapter number 8
Start page 211
End page 236
Total pages 26
Total chapters 17
Collection year 2011
Language eng
Formatted Abstract/Summary
Purpose – This paper examines Hayek's view of the mind to see if it provides a useful and unifying foundation for understanding both deliberative choices that involve conscious information processing (the ‘economic imagination’) and choices that are not determined by conscious processes such as those involving ‘gut feelings’ or knowledge that the chooser is unable to articulate (the ‘tacit dimension’).

Methodology/approach –
The paper analyses Hayek's view of the mind from the standpoint of evolutionary economics and biology. Because of the significance of pattern detection in Hayek's analysis, the paper examines parallels with key ideas in personal construct psychology and artificial intelligence. As well as exploring the evolutionary advantages of behavior based on programmed responses to the detection of particular patterns, it also explores possible evolutionary and neural origins of dysfunctional heuristics and biases.

Findings –
Hayek's theory of the mind provides useful foundations for analyzing choice in a evolving, pluralistic and context-based manner rather than seeing all choices as made in much the same way on the basis of ‘given preferences’ that obey the axioms of rational choice theory. His theory complements work in psychological economics based on Kelly's personal construct psychology, cognitive dissonance theory and Maslow's hierarchy of needs. The analysis leads to questions being raised about the conventional faith in the notion of a diminishing marginal rate of substitution.

Originality/value of paper –
The paper shows how very different ways of choosing can be understood in terms of Hayek's analysis of the mind.
Keyword Hayek's analysis
Economics
Business and economics
Q-Index Code B1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Series ISSN: 1529-2134

 
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Created: Mon, 06 Dec 2010, 15:03:53 EST by Alys Hohnen on behalf of School of Economics