A sketch of a mechanism-based explanation of cognitive path processes, lock-in of individual mental models and institutional rigidity

Abstract

According to the dynamic-historic strand of new institutional economics (Fu-rubotn/Richter 2008), institutional rigidity is one of the major problems of economies. “Institutional rigidity” designates states or situations which are characterized by institutions in need of change but do not change, or not to the required degree. Our paper addresses the question whether institutional rigidity can be explained as a result of mental path processes, i. e., path dependent or even locked individual mental models. Path dependency theory is usually not applied to mental phenomena; it is no approach that has any roots in cognitive science or psychology. That notwithstanding, we state that path dependency theory can be applied to cognitive systems. We therefore had to build our analysis on concepts or ideas already available in cognitive science, i. e., information processing or mental representation, which we connected with early works in cognitive psychology or radical constructivism by Piaget. Piaget’s distinction between assimilation and accommodation provides a connection point to path dependency theory, since assimilation is a source of the continuity of the mental structure which thus contains the germ of a path process. In this regard, our paper can be read as an attempt to marry cognitive or radical constructivism and path dependency theory in order to build a micro-level model of mental processes.