A neurolinguistic approach to performativity in economics

Abstract

What makes institutions 'real'? One central notion has been emerging recently in sociology, which is 'performativity', a term borrowed from the philosophy of language. I propose a neurolinguistic approach to performativity that is based on John Searle's theory of institutions, especially his concept of a 'status function' and his explanation of rule-following as a neurophysiological disposition. Positing a status function is a performative act. I proceed in two steps to establish the neurolinguistic framework. First, I apply the concept of 'conceptual blending' borrowed from cognitive science on the status function, and give empirical applications from the research on performativity in financial markets. Second, I sketch the underlying neuroscience framework following the neural theory of metaphor, which I illustrate empirically with examples from behavioral finance and neuroeconomics.performativity, Searle's theory of institutions, conceptual blending, emergence of markets, neural theory of metaphor, neuroeconomics,

Naturalizing Institutions: Evolutionary Principles and Application on the Case of Money

“…I will propose that this causal conjunction can be specified further in terms of the conjunction of signs and emotions, with the latter being complex neuronal structures which coordinate valuations and sensorimotoric ouputs. As I have argued elsewhere (Herrmann-Pillath 2010, 2012, this results into rulefollowing being a performative action in the sense of speech-act theory, i.e. through the action Thus, we get an empirical interpretation of the general replicator function in the context of a fully fledged evolutionary approach to institutions.…”

Performing Comparative Advantage: The Case of the Global Coffee Business

“…Here, economics turns out to be performative as the propositions of economics also created social facts (such as pricing schemes for op- tions) which did not exist before, and which changed the way how markets work. However, this focus on economic theory can be easily extended to include all conceptualizations of the economic process (Callon, 2007;Herrmann-Pillath, 2010). For example, when economic theory is used to create a system of transferable fishing quotas that establishes property rights in a highly mobile resource, this implies that the underlying economic theory (theory of property rights, auction theory etc.)…”