Markets, Productivity, and Happiness in a Historical Perspective

Custom and Path-dependence in Economics

Rizzello Salvatore, Università del Salento

Rizzello. Unlike institutions, custom received little attention by economists. The analysis of institutions includes Keynesian, neo-institutionalist, Austrian, cognitive and experimental economics. Custom instead, usually conceived as "traditio contra progressum" by Mill, Marshall, Schumpeter, only recently is considered as relevant for understanding economic phenomena, directly connected to the neurocognitive processes of personal knowledge. Actually custom plays a double role: it describes the mechanisms of social coordination and is able to explain the "way of thinking" informing socio-economic analysis and economic agents’ behaviour - in terms of competition, self-interest and optimization - very distant from real human nature. Starting from the contribution by cognitive economics, this paper offers a new reading of the relationship among customs, institutions and economic action, which overturns the traditional view of the emergence of the social from the individual dimension.

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Keywords: Custom Path-dependence Institutions Social dimension