SHARED MENTAL MODELS - IDEOLOGIES AND INSTITUTIONS

For most of the interesting issues in political and economic markets, uncertainty rather than risk characterizes choice-making. Therefore, confining one's behavioral assumptions to that of substantive rationality makes it impossible to understand the diverse performance of economies and polities both historically and contemporaneously. In order to understand decision-making under conditions of strong uncertainty we must understand the relationship between the mental models that individuals construct to make sense of the world around them, the ideologies that evolve from such constructions, and the institutions that develop in a society to order interpersonal relationships. This paper develops a framework with which to understand and model the shared mental models that guide choices and shape the evolution of political-economic systems and societies.