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Published by EH.NET (December 2003)  
 
Nicola Giocoli, _Modeling Rational Agents: From Interwar Economics to Early 
Modern Game Theory_. Cheltenham, UK: Edward Elgar, 2003. x + 464 pp. $125 
(cloth), ISBN: 1-84064-868-6.  
 
Reviewed for EH.NET by Esther-Mirjam Sent, Department of Economics and 
Policy Studies, University of Notre Dame.  
 
  
 
During recent months, the listserv of the History of Economics Society has 
witnessed a heated exchange among David Colander, Roy Weintraub, and others 
who lined up behind either "thin" or "thick" history of economics (see 
http://www.eh.net/HE/hes_list/list_archive.php). In the discussions, thin 
history was associated with the conventional exegetical approach to the 
history of economic ideas, or literature reviews with a broader sense of 
the literature and the context of the times. Posters to the list seemed to 
agree that this is the type of history that belongs in economics 
departments. Thick history, on the other hand, is concerned with the 
relationship of economics to other disciplines and the involvement of 
economic ideas in the economy and various other social processes. As such, 
this is the type of history that is more at home in history departments. 
Another contrast that may be drawn is between rational and historical 
reconstruction (see Khalil 1995; Rorty 1984), where rational reconstruction 
(or a Whiggish perspective) starts from the idea that the theory from one 
school could be extracted, without much violence, from the author's body of 
thought, its underpinning vision, and its environmental context. Historical 
reconstruction (or a contextualist perspective), on the other hand, is 
based on the premise that the extraction and comparison of peripheries 
without regard to their respective bodies of thought or historical context 
imminently violates the constitution of one theory in favor of another.  
 
What Nicola Giocoli offers in _Modeling Rational Agents: From Interwar 
Economics to Early Modern Game Theory_ is thin history, or rational 
reconstruction. Ignoring historical contingencies, personal vicissitudes, 
academic relations, funding availability, and so on, he focuses almost 
exclusively on written texts. These lead him to claim that the period from 
roughly 1900 to 1970 was characterized by a change in the image of economic 
knowledge resulting in a change in the body of knowledge. More 
specifically, Giocoli argues that the image of knowledge in economics 
shifted from systems of forces to systems of relations. Along the way, the 
body of knowledge moved from rationality as maximization to rationality as 
consistency, as well as from processes to conditions, from an interest in 
behavior to formal representation, from calculus to topology, from physics 
to mathematics, and so on.  
 
In Giocoli's opinion, the transition in the image of knowledge in economics 
and the accompanying shift in the body of economic knowledge helps to 
explain the fall and rise of game theory. Briefly, _Modeling Rational 
Agents_ argues that the period up to World War II was characterized by an 
escape from psychology as well as an escape from perfect foresight. Whereas 
the former connected with the systems of relations image, the latter was 
congruent with the systems of forces one. In other words, economics found 
itself in a stalemate around the Second World War, in Giocoli's analysis, 
with the discipline slowly transitioning to the systems of relations view 
in the Post War period. During this gradual shift, Von Neumann and 
Morgenstern's approach to game theory and its supposed focus on forces went 
against the tide in the discipline. Giocoli claims that Nash's 
interpretation of game theory was beset by other difficulties retarding its 
acceptance by mainstream economics. In particular, Nash Equilibrium 
presumably lacks a compelling interpretation and can be understood as a 
fixed point or in rationalistic terms. Whereas the former was adopted, it 
was also the one that matched the systems of relations image. In Giocoli's 
opinion, it was not until economics had completed the transition to the 
systems of relations view that it was ready to embrace non-cooperative game 
theory. He concludes: "It was the transformation of neoclassical economics 
in the direction of the consistency view of rationality and, more 
generally, of the SOR [systems of relations] image that made possible the 
rise of non-cooperative game theory and NE [Nash Equilibrium] to their 
current outstanding role" (p. 342).  
 
As a result of its focus on thin history, or rational reconstruction, 
_Modeling Rational Agents_ is bound to be subject to the same kinds of 
criticisms expressed on the HES List. As Rorty (1984, p. 54) perceptively 
notes, rational reconstructions are not likely to converge, and there is no 
reason why they should. Nevertheless, the lessons one can draw from the 
thin approach adopted by the author are unclear. Giocoli makes it seem as 
if twentieth century economists were mere pawns in an inevitable grand 
scheme. What do we learn from this about the discipline of economics? And 
if there has indeed been a transformation in the image of economics, then 
how can the recent embracement of bounded rationality on the part of game 
theorists, rational expectations economists, and the like be understood 
(see Sent forthcoming)? Despite Giocoli's claim that "the two key 
innovations brought about by the SOR [systems of relations] image were the 
triumph of the consistency view of rationality and the abandonment of the 
learning problem" (p. 346), recent developments mark a move away from 
rationality as consistent behavior and towards an interest in learning on 
the part of economic agents. In addition, the reader is frequently left 
with more questions than answers. Can the rich history of economics during 
the twentieth century be captured convincingly by a simple, smooth, and 
logical narrative that focuses on shifts from forces to relations?  
 
Regardless, Giocoli's book is an impressive tour de force that relies on 
extensive and expansive literatures. It should be required reading for 
anyone desiring a new perspective on the history of economics in the 
previous century.  
 
References:  
 
Khalil, Elias L. 1995. "Has Economics Progressed? Rectilinear, Historicist, 
Universalist, and Evolutionary Historiographies." _History of Political 
Economy_, 27: pp. 43-87.  
 
Rorty, Richard. 1984. "The Historiography of Philosophy: Four Genres." In 
Richard Rorty, Jerome B. Schneewind, and Quentin Skinner, eds., _Philosophy 
in History: Essays in the Historiography of Philosophy_, pp. 49-75. 
Cambridge: Cambridge University Press.  
 
Sent, Esther-Mirjam. Forthcoming. "The Legacy of Herbert Simon in Game 
Theory." _Journal of Economic Behavior and Organization_.  
 
  
 
Esther-Mirjam Sent is Associate Professor of Economics and Faculty Fellow 
of the Reilly Institute for Science, Technology, and Values at the 
University of Notre Dame. She is the author of _The Evolving Rationality of 
Rational Expectations: An Assessment of Thomas Sargent's Achievements_ 
(Cambridge University Press, 1998) and the editor, with Philip Mirowski, of 
_Science Bought and Sold: Essays in the Economics of Science_ (University 
of Chicago Press, 2002).  
 
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