Skip to content
Register Sign in Wishlist

Rationality in Economics
Constructivist and Ecological Forms


  • Date Published: December 2009
  • availability: Available
  • format: Paperback
  • isbn: 9780521133388

£ 27.99

Add to cart Add to wishlist

Other available formats:
Hardback, eBook

Looking for an inspection copy?

This title is not currently available on inspection

Product filter button
About the Authors
  • The principal findings of experimental economics are that impersonal exchange in markets converges in repeated interaction to the equilibrium states implied by economic theory, under information conditions far weaker than specified in the theory. In personal, social, and economic exchange, as studied in two-person games, cooperation exceeds the prediction of traditional game theory. This book relates these two findings to field studies and applications and integrates them with the main themes of the Scottish Enlightenment and with the thoughts of F. A. Hayek: through emergent socio-economic institutions and cultural norms, people achieve ends that are unintended and poorly understood. In cultural changes, the role of constructivism, or reason, is to provide variation, and the role of ecological processes is to select the norms and institutions that serve the fitness needs of societies.

    • Nobel Laureate Smith expands his Nobel lecture on rationality in economics to a fuller form embracing behavioral economics and economic theory
    • Also covers links to the other topics in economic philosophies of F. A. Hayek, Adam Smith, and the Scottish Enlightenment figures
    • Continues topical emphasis in markets and institutional behavior
    Read more

    Reviews & endorsements

    'The journey that brought Vernon Smith to his Nobel Prize is not over. It obviously brought us constructive tools, in the form of controlled experimental methods that allow economists to see the lay of the behavioral land more clearly than before. But this magisterial review of the whole journey, including precursors, reminds us that the scope of economics has always been much wider than the straw man that behaviorists like to attack. Properly understood, experimental methods force all economists to think of constructivist and ecological rationality as complementary ways of understanding behavior, rather than as fundamentally inconsistent views of behavior. The journey, then, has really just begun.' Glenn W. Harrison, College of Business Administration, University of Central Florida

    'Vernon Smith has spent a lifetime of research, combining theory and experimental evidence, exploring the idea and implications of rationality in economics. This book recounts that lifetime, synthesizes it and adds to it - producing a volume that soars above the usual material of economics. The end-product is a volume that takes an eagle's eye view of rationality in economics, and puts it in a new and glorious perspective. Reading it is essential for theorists and practitioners.' John D. Hey, University of York, UK and LUISS, Italy

    'Rationality in Economics is a delight, garnished with fascinating historical detail, philosophical scientific insights, and an eye on current public policy issues. Vernon Smith, as always, shows a skeptical, irreverent attitude toward 'rationality models' based on assumptions that are not stress-tested with cash-motivated subjects in the lab. His own policy recommendations, like the 'Combinatorial Clock Auction', are original and innovative.' Charles Holt, University of Virginia

    'Locating human sociality as a centerpiece of economics, Smith's clear vision of the meaning of rationality pierces the fog surrounding the place of economics in human society. Ideas of David Hume, Adam Smith, Friedrich Hayek and Herbert Simon are masterfully synthesized with fifty years of experimental data from the economics laboratory to bring us a book that might as well be called 'The Origin of Human Institutions'.' Shyam Sunder, School of Management, Yale University

    'I am pleased to report that Vernon Smith's new volume of opinions amounts to the most important book on economic methodology of the past decade.' Journal of Economics and Philosophy

    '… a rich book that is full of stimulating ideas …' History of Economic Ideas

    See more reviews

    Customer reviews

    Not yet reviewed

    Be the first to review

    Review was not posted due to profanity


    , create a review

    (If you're not , sign out)

    Please enter the right captcha value
    Please enter a star rating.
    Your review must be a minimum of 12 words.

    How do you rate this item?


    Product details

    • Date Published: December 2009
    • format: Paperback
    • isbn: 9780521133388
    • length: 386 pages
    • dimensions: 226 x 152 x 13 mm
    • weight: 0.52kg
    • contains: 10 tables
    • availability: Available
  • Table of Contents

    Part I. Rationality, Markets, and Institutions:
    1. Rediscovering the Scottish philosophers
    2. On two forms of rationality
    Part II. Impersonal Exchange: The Extended Order of the Market:
    3. Relating the two concepts of a rational order
    4. Market institutions and performance
    5. Asymmetric information and equilibrium without process
    6. Spectrum auctions and combinatorial designs: theory and experiment
    7. Psychology and markets
    8. What is rationality?
    Part III. Personal Social Exchange:
    9. Emergent order without the law
    10. The effects of context on behavior
    Appendix: behavioral deviation from prediction: error, confusion, or evidence of brain function?
    11. Investment trust games: effects of gains from exchange in dictator giving
    12. Reciprocity in trust games
    Part IV. Order and Rationality in Method and Mind:
    13. Rationality in science
    14. Neuroeconomics: the internal order of the mind
    15. A summary.

  • Author

    Vernon L. Smith, Chapman University, California
    Vernon L. Smith was awarded the Nobel Prize in Economic Science in 2002 for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms. He holds joint appointments with the Argyros School of Business and Economics and the School of Law at Chapman University, California, where he also is part of the team that will create and run the Economic Science Institute there. Cambridge University Press published his Papers in Experimental Economics in 1991 and a second collection, Bargaining and Market Behavior, in 2000.

Sign In

Please sign in to access your account


Not already registered? Create an account now. ×

Sorry, this resource is locked

Please register or sign in to request access. If you are having problems accessing these resources please email

Register Sign in
Please note that this file is password protected. You will be asked to input your password on the next screen.

» Proceed

You are now leaving the Cambridge University Press website. Your eBook purchase and download will be completed by our partner Please see the permission section of the catalogue page for details of the print & copy limits on our eBooks.

Continue ×

Continue ×

Continue ×

Find content that relates to you

Join us online

This site uses cookies to improve your experience. Read more Close

Are you sure you want to delete your account?

This cannot be undone.


Thank you for your feedback which will help us improve our service.

If you requested a response, we will make sure to get back to you shortly.

Please fill in the required fields in your feedback submission.