To specialize or to innovate? An internalist account of pluralistic ignorance in economics
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Academic and corporate research departments alike face a crucial dilemma: to exploit known frameworks or to explore new ones; to specialize or to innovate? Here I show that these two conflicting epistemic desiderata are sufficient to explain pluralistic ignorance and its boom-and-bust-like dynamics, exemplified in the collapse of the efficient markets hypothesis as a modern risk management paradigm in 2007. The internalist nature of this result, together with its robustness, suggests that pluralistic ignorance is an inherent feature rather than a threat to the rationality of epistemic communities.
KeywordsPluralistic ignorance Exploitation Exploration Thomas Kuhn Scientific revolutions Economics
The author thanks the participants of the 4th Copenhagen Lund Workshop in Social Epistemology for comments and discussion. In particular he would like to thank its organizer Frank Zenker for many helpful comments and suggestions during the editorial process.
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