Starting from the assumption that decision situations in economic contexts are characterized by fundamental uncertainty, this article argues that the decision-making of intentionally rational actors is anchored in fictions. “Fictionality” in economic action is the inhabitation in the mind of an imagined future state of the world and the beliefs in causal mechanisms leading to this future state. Actors are motivated in their actions by the imagined future and organize their activities based on these mental representations. Since these representations are not confined to empirical reality, fictional expectations are also a source of creativity in the economy. Fictionality opens up a way to an understanding of the microfoundations of the dynamics of the economy. The article develops the notion of fictional expectations. It discusses the role of fictional expectations for the dynamics of the economy and addresses the question of how fictional expectations motivate action. The last part relates the notion of fiction to calculation and social macrostructures, especially institutions and cultural frames. The conclusion hints at the research program developing from the concept of fictional expectations.
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This is not to deny the crucial role of routine behavior also in economic contexts (Camic 1986; Tappenbeck 1999, p. 48). The discussion here, however, refers only to a type of action in which actors are reflexive in the sense that they make decisions based on a deliberate consideration of alternatives, weighted against each other with regard to the desirability of their expected outcomes.
Though fictional expectations do exist in all spheres of social life, I would hypothesize that they are more volatile in economic contexts of capitalist societies, because behavior in this sphere is less normatively regulated. This contingency of expectations is a foundation for the innovativeness of capitalist economies but is also a cause of its restlessness and susceptibility to crises stemming from rapid fluxes in expectations.
In part, this is a problem of lack of thoroughness of economic analysis (Hellwig 1998, p. 719ff.). However, the problem cannot be reduced to superficiality of analysis. In practical terms, actors are simply overburdened and therefore cannot take all relevant information into account (Elster 2009). And with regard to novelty, the necessary information for optimizing decisions is simply not available at the time of decision making (Dequech 2003).
According to Neil Fligstein (2001, p. 112), the identities of actors—that is, their interpretation of the structures of the world—are not fixed but emerge in the process of social interaction. Sabel and Zeitlin (1997, p. 15) argue that actors define “themselves strategically in the very act of constituting their context” because context is not objectively given but established through the definition of the situation carried out by the actors who are acting in these structures. The economics of conventions (Favereau and Lazega 2002) assumes the simultaneous presence of different conventions, making it necessary for actors to decide which convention holds in a specific situation, a decision that takes place in the action process and is potentially conflictual.
Script following and imagination can also take place in situations with certainty and risk. Traditional action (Weber  1978) or wishful thinking would be examples. Given the assumption of intentional rationality these cases are not further explored here.
In discussions of the financial crisis the term “fictional” is often used to describe fraudulent misrepresentations of economic facts. It is important to note that this is not how the term is used here.
Because of this, literary texts wear their fictionality on their sleeve, while non-literary fictions hide it. As Wolfgang Iser (1993, pp. 12–13) emphasizes: “In the self-disclosure of its fictionality, an important feature of the fictional text comes to the fore: it turns the whole of the world organized in the text into an ‘as-if’ construction”.
Fictionality, moreover, allows the attribution of qualities to goods that exist only as imaginaries. This is of crucial importance in understanding the sources of consumer demand, especially in economies that are saturated in functional terms. Examples of where this aspect of imaginaries can be studied particularly well are the valuation of antiques, art, wine, and so on. This aspect of fictionality is not discussed in this article. See, however, Beckert (2011).
With hindsight, such point predictions mostly turn out to be wrong. However, based on the theoretical considerations developed here, it would be a categorical mistake to mock such forecasts for being wrong. They are necessarily wrong because the future cannot be foreseen. The much more interesting perspective is to analyze the functions of such forecasts (and other forms of fictional expectations) for structuring action in the present.
As Volkmann (2001, p. 15) elaborates with reference to Wolfgang Iser, the act of fictionalizing converts the diffuseness of the imaginary into a gestalt. Fictionalizing “provides the imaginary with a determinacy that it would otherwise not possess” (ibid.).
Research on narrative representations is also important in historiography (Anderson 1983). Since this research refers to the past it is not considered here. Our interest here lies in stories used to depict future events imaginatively.
That expectations under conditions of uncertainty are fictions also finds confirmation in the status of the ratings of rating agencies. After ratings had proved to be wrong in the financial crisis of 2008, rating agencies stressed in their defense that their ratings are nothing but “opinions”. While this was an excuse to avoid legal liability, it also confirms the argument developed here: assessments of the future in highly complex conditions are no more than “pretensions”.
The influence of fictional depictions of future states on investments is not limited to financial markets; it is a much wider phenomenon. It shows itself, for instance, in the bequest of wealth (Beckert 2008), the buying of life insurance (Zelizer 1979, p. 595f.), the purchase of lottery tickets (Beckert and Lutter 2009), or investments in education motivated by imaginaries of intergenerational upward mobility, supported by collective narratives such as the “American dream”.
See also Zbaracki (2004, p. 17) who shows, based on ethnographic work in a large industrial firm, that price-setting practices make use of economic price theory. But rather than determining prices, the theory has influence because it is used to legitimate the position advocated by a group of managers in the negotiations. “Price theory may serve as a rational myth” used by actors to orient themselves in a complex situation.
Psychological theories (Beach and Mitchell 1987) distinguish between several mental “images” through which knowledge is represented: The self-image, consisting of personal beliefs and values; the trajectory-image, depicting a desirable future; the action-image, portraying the sequences of actions needed to achieve the desirable future; and the projected-image, which depicts the anticipated results of the action.
Again, there seems to be a parallel to fictional literature that can also produce “quasi emotions” (Walton 1990, p. 37) in the reader who empathizes with the fate of the characters.
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I would like to thank the two anonymous Theory and Society reviewers for their very helpful comments. For comments on earlier versions of this article I would like to thank David Dequech, Christoph Deutschmann, Arne Dreßler, Martin Hellwig, Sebastian Kohl, Sophie Mützel, and Werner Rammert.
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Beckert, J. Imagined futures: fictional expectations in the economy. Theor Soc 42, 219–240 (2013). https://doi.org/10.1007/s11186-013-9191-2
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