Frank Hindriks

Tractability assumptions and the Musgrave-Maki typology

Musgrave (1981) proposed a typology of assumptions, developed further by Mäki (2000), to defend the idea that the truth of assumptions is often important when evaluating economic theories against those economists who consider only predictive success to be relevant for this purpose. In this paper I propose a new framework for this typology that sheds further light on the issue. The framework consists of a distinction between first‐order assumptions that state the absence or lack of effect of some factor F, and second‐order assumptions that explicate the purposes for which or the reasons why particular first‐order assumptions are imposed. Given this distinction, Musgraves main contention can be reformulated as the claim that, even though the falsity of first‐order assumptions is often unproblematic, it is important that the second‐order assumptions be true. I go on to introduce the notion of a tractability assumption, which is a second‐order assumption according to which a first‐order assumption is imposed in order to make a particular problem tractable. It is argued that a realist will want to relax a first‐order assumption imposed for reasons of tractability as such assumptions are not even approximately true. These amendments to the Musgrave–Mäki typology are suggested in order to improve our understanding of what moves scientists when they choose particular first‐order assumptions, many of which are false, and in order to argue that the practice of doing so can be supported from a realist perspective of science.

Institutions, rules, and equilibria: a unified theory *

We propose a new framework to unify three conceptions of institutions that play a prominent role in the philosophical and scientific literature: the equilibria account, the regulative rules account, and the constitutive rules account. We argue that equilibrium-based and rule-based accounts are individually inadequate, but that jointly they provide a satisfactory conception of institutions as rules-in-equilibrium. In the second part of the paper we show that constitutive rules can be derived from regulative rules via the introduction of theoretical terms. We argue that the constitutive rules theory is reducible to the rules-in equilibrium theory, and that it accounts for the way in which we assign names to social institutions.

False Models as Explanatory Engines

Many models in economics are very unrealistic. At the same time, economists put a lot of effort into making their models more realistic. I argue that in many cases, including the Modigliani-Miller irrelevance theorem investigated in this paper, the purpose of this process of concretization is explanatory. When evaluated in combination with their assumptions, a highly unrealistic model may well be true. The purpose of relaxing an unrealistic assumption, then, need not be to move from a false model to a true one. Instead, it may be providing an explanation of some phenomenon by invoking the factor that figures in the assumption. This idea is developed in terms of the contrastive account of explanation. It is argued that economists use highly unrealistic assumptions to determine a contrast that is worth explaining. The process of concretization also motivates new explanatory questions. A high degree of explanatory power, then, may well be due to a high number of unrealistic assumptions. Thus, highly unrealistic models can be powerful explanatory engines.

Unobservability, tractability and the battle of assumptions

Economic models often include unrealistic assumptions. This does not mean, however, that economists lack a concern for the truth of their assumptions. Unrealistic assumptions are frequently imposed because the effects are taken to be negligible or because the problem at hand is intractable without them. Using the Musgrave‐Mäki typology as the point of departure, these claims are defended with respect to theories proposed by Solow, Hall and Roeger concerning productivity growth and the mark‐up. Since they are unobservable, their values need to be inferred from the values of observable variables. Assumptions such as perfect competition and constant returns to scale are used for making this inference or measurement problem tractable. Other assumptions are justified in terms of negligibility. These findings support the fecundity of the (amended) Musgrave‐Mäki typology of assumptions – including the notion of a tractability assumption proposed here. Finding ways of relaxing tractability assumptions turns out to be an important source of progress in economics.

The location problem in social ontology

Mental, mathematical, and moral facts are difficult to accommodate within an overall worldview due to the peculiar kinds of properties inherent to them. In this paper I argue that a significant class of social entities also presents us with an ontological puzzle that has thus far not been addressed satisfactorily. This puzzle relates to the location of certain social entities. Where, for instance, are organizations located? Where their members are, or where their designated offices are? Organizations depend on their members for their existence, but the members of an organization can be where the organization is not. The designated office of an organization, however, need be little more than a mailbox. I argue that the problem can be solved by conceptualizing the relation between social entities and non-social entities as one of constitution, a relation of unity without identity. Constituted objects have properties that cannot be reduced to properties of the constituting objects. Thus, my attempt to solve the Location Problem results in an argument in favor of a kind of non-reductive materialism about the social.

Corporate responsibility and judgment aggregation

Paradoxical results concerning judgment aggregation have recently been invoked to defend the thesis that a corporate agent can be morally responsible for a decision without any of its individual members bearing such responsibility. I contend that the arguments offered for this irreducibility thesis are inconclusive. They do not pay enough attention to how we evaluate individual moral responsibility, in particular not to the role that a flawed assessment of the normative reasons that bear on the issue to be decided on play in this context. I go on to propose a method for distributing corporate responsibility to individual members within the judgment aggregation framework.

Restructuring Searle's Making the Social World

Institutions are normative social structures that are collectively accepted. In his book Making the Social World, John R. Searle maintains that these social structures are created and maintained by Status Function Declarations. The article’s author criticizes this claim and argues, first, that Searle overestimates the role that language plays in relation to institutions and, second, that Searle’s notion of a Status Function Declaration confuses more than it enlightens. The distinction is exposed between regulative and constitutive rules as being primarily a linguistic one: whereas deontic powers figure explicitly in regulative rules, they feature only implicitly in constitutive rules. Furthermore, he contends that Searle’s collective acceptance account of human rights cannot adequately account for the fact that people have these rights even when they are not recognized. Finally, It is argued that a conception of collective intentionality that involves collective commitment is needed in order to do justice to the normative dimension of institutions.

Control, intentional action, and moral responsibility

Skill or control is commonly regarded as a necessary condition for intentional action. This received wisdom is challenged by experiments conducted by Joshua Knobe and Thomas Nadelhoffer, which suggest that moral considerations sometimes trump considerations of skill and control. I argue that this effect (as well as the Knobe effect) can be explained in terms of the role normative reasons play in the concept of intentional action. This explanation has significant advantages over its rivals. It involves at most a conservative extension rather than a radical revision of what we tend to believe about intentional action, and it fits better with the way we conceive of the relation between intentional action and moral responsibility.

Team reasoning and group identification

The team reasoning approach explains cooperation in terms of group identification, which in turn is explicated in terms of agency transformation and payoff transformation. Empirical research in social psychology is consistent with the significance of agency and payoff transformation. However, it also reveals that group identification depends on social categorization processes to a greater extent than is currently acknowledged within the team reasoning approach. In light of this, Bacharach’s claim that group identification is prompted by a perceived conflict between individual and collective interests has to be rejected. Instead, it is triggered by the salience of a social category. Sugden’s account of the role of trust in team reasoning needs to be modified: rather than by evidence of behavior, it is induced by common knowledge of shared membership of a particular group. The upshot is that the empirical adequacy of the team reasoning approach can be substantially enhanced by incorporating the notion of category salience as a key explanatory variable.

Person as lawyer: How having a guilty mind explains attributions of intentional agency

In criminal law, foresight betrays a guilty mind as much as intent does: both reveal that the agent is not properly motivated to avoid an illegal state of affairs. This commonality warrants our judgment that the state is brought about intentionally, even when unintended. In contrast to Knobe, I thus retain the idea that acting intentionally is acting with a certain frame of mind.