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Cognitive Economics


Key Concept   Knowledge has costs of acquisition and of storage and its uses have productive efficiencies.




Nicholas Rescher, "Cognitive Economy: the Economic Dimension of the Theory of Knowledge," U. of Pittsburgh Press, 1989.

"(1) The economics of knowledge is an important but underdeveloped branch of epistemology. It is--or should be--evident that knowledge has its economic aspect of benefits and costs. (2) The benefits of information are both theoretical and applied. (3) Moreover, the management of information is always a matter of costs. (4) Rationality itself has a characteristically economic dimension in its insistence on a proper proportioning of expenditures and benefits."  Page 3.


"(1) Knowledge is power.  But the hoarding of knowledge--monopolization, secretiveness, collaboration avoidance--is generally counterproductive.  (2) In anything like ordinary circumstances, mutual aid in the development and handling of information is highly cost effective.  (3) The way in which people build up epistemic credibility in cognitive contexts is structurally the same as that in which they build up financial credit in economic contexts.  (4) Considerations of cost effectiveness--of economic rationality, in short--operate to ensure that any group of rational inquirers will in the end become a community of sorts, bound together by a shared practice of trust and cooperation."  Ibid., page 33


"(1) Importance is a key factor in the economics of cognition.  For what is important is by virtue of this very fact more deserving of attention and effort than what is not.  Importance is always comparative, a matter of the relative share of resources due to one item in comparison with others in the overall scheme of things."  Ibid., page 69


"(1) Induction is the methodology for effecting our best estimate of the correct answers to various questions whose resolution transcends the sure reach of the facts in hand.  (2) The ideas of economy and simplicity are the guiding principles of inductive reasoning, whose procedure is set by the cardinal precept: Resolve your cognitive problems in the simplest, most economical way compatible with an adequate use of the information at your disposal."  Ibid., page 82


Implication to knowledge


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