Economists have distinguished between uncertainty about the state of economic environment and uncertainty of economic agents about the decisions or planned actions of agents with whom they are interacting (subjective and endogenous uncertainty). Traditional general equilibrium models preclude this latter type of uncertainty or reduce it to socially inconsequential levels through a number of artificial assumptions. Relaxing these assumptions means that the possibility of disequilibrium choices has to be taken seriously, both as an objective possibility and as a possibility countenanced by economic agents; this in turn paves the way for accounts of certain institutions and practices as structures which evolve out of agents' attempts to cope with the resulting uncertainty. These institutions and practices are what Dr. Sensat calls a "reification" (making concrete an abstract idea). Reification can be criticized as a socially specific barrier to practical rationality. Under this grant, Dr. Sensat will reconstruct this thesis of social reification as follows: First, social structures of reification will be characterized as socially specific modes of response to the "subjective uncertainty" experienced by agents about the actions of other agents with whom they are interacting. The characterization will connect reification with certain game- theoretic equilibria on the one hand and with the so-called "sunspot" equilibria of general equilibrium theory on the other. these connections will reveal inherent limitations to the ability of structures of reification to resolve subjective uncertainty in an optimal way. Second, structures of social planning will be defined and compared with structures of reification with respect to feasibility, efficiency and incentive compatibility. Third, the new concept of reification will be used in a critique of exploitation as based on an ideal of rational agency rather than a claim of distributive justice. The project promises to increase our understanding of the nature of rational agency in social contexts, the compatibility and relative merits of economic planning and markets, and the nature of exploitative social relationships.
