Political Science | Empirical Theory & Methodology
Y673 | 9910 | Bianco and Smyth

Topic:  Responding to Institutional Change:  Individual Decision-
Making in Uncertain Environments

This course meets at the Workshop, 513 N. Park Street, Room ZB 102

Traditionally, the Workshop focuses on how individuals build
institutions to solve local problems.  Yet, just as often
institutions are imposed on citizens and policy-makers who must then
decide how to respond to the new environment.  In Albert Hirschman’s
famous words, these individuals face the decision of exit, voice or
loyalty.  Regardless of where institutions come from, scholars agree
that “institutions matter” – that the structure within which
individuals operate shapes the choices they make.  However, the
source of institutions and institutional change may have important
implications for how individuals react to different arrangements,
and for the impact of these institutions on individual behavior and
aggregate outcomes.

In addressing these questions, the course will focus on
microfoundations – assumptions about individual decision-processes
that are imbedded in models of institutional change.  Working from
the premise that institutions matter, scholars have developed a wide
range of behavioral assumptions to explain both the choice of
institutions and the response to institutional change.   In some
cases, these theories yield compatible predictions but are built on
very different assumptions about human decision-making.  Rational
choice models posit decision processes that make efficient use of
all available information, while a variety of theories based in
psychology or in behavioral economics argue for different forms of
bounded rationality, where some information is not considered,
either because of limited cognitive capabilities, decision costs, or
the use of heuristics or shortcuts.    In other cases different
models yield divergent predictions and it is not clear which set of
predictions are right.

This course will explore interdisciplinary models of decision-making
in environments of institutional change from regime change to
healthcare reform.  Do decision-processes vary across contexts – and
if they do, how does this variation shape individual decision
processes?  Subsequently, do decision processes lead to different
choices in response to institutional incentives?   We construe
context broadly to include not only variation in institutional
structure but also factors that shape the information available to
each individual, the consequences of different choices, and the
degree to which choices are interdependent across individuals.  This
approach highlights variables such as social networks, group
dynamics, and other factors that inform individuals and lead them to
take account of choices made by others.  This approach also suggests
that variation in individual decision-makers’ attributes such as the
level of education, age or class on both their choice of decision
procedures and their response to institutional change.

The course will incorporate both classic readings and cutting edge
research from different disciplines.  Students will be required to
write brief weekly discussion papers and also a final literature
review paper which investigates a research topic of particular
interest to them.