The Invisible Hand in Economics: How Economists Explain Unintended Social Consequences

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This is a book about one of the most controversial concepts in economics: the invisible hand. The author explores the unintended social consequences implied by the invisible hand and discusses the mechanisms that bring about these consequences.

The book questions, examines and explicates the strengths and weaknesses of invisible-hand type of explanations of emergence of institutions and macro-social structures, from a methodological and philosophical perspective. Aydinonat analyses paradigmatic examples of invisible-hand explanations such as Carl Menger’s ‘Origin of Money’ and Thomas Schelling’s famous checkerboard model of residential segregation in relation to contemporary models of emergence of money and segregation. Based on this analysis, he provides a fresh look at the philosophical literature on models and explanation and develops a philosophical framework for interpreting invisible-hand type of explanations in economics and elsewhere. Finally, the author applies this framework to recent game theoretic models of institutions and outlines the way in which they should be evaluated.

Covering areas such as History, Philosophy of Economics and Game Theory, this book will appeal to philosophers of social science and historians of economic thought as well as to practicing economists.
Original languageEnglish
Place of PublicationLondon
Number of pages256
ISBN (Print)9780415569545, 9780415417839
Publication statusPublished - 2008
Externally publishedYes
MoE publication typeC1 Scientific book

Fields of Science

  • 511 Economics
  • Philosophy of economics
  • History of economic thought
  • Game theory
  • Spontaneous order
  • invisible hand
  • explanation
  • models

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