Digital Capitalism and New Institutionalism by Daniil Frolov;

Author:Daniil Frolov; [Frolov, Daniil]
Language: eng
Format: epub
ISBN: 9781003833086
Publisher: Taylor & Francis (Unlimited)
Published: 2023-04-15T00:00:00+00:00

Sources: Own elaboration. The descriptions of ER1 and ER2 views are partially taken from Dekker and Remic (2019).

Unlike what has been argued in first- and second-wave theories, extended cognitive processes are not simply realized in the context of cognitive norms and cultural practices. Cognitive institutions provide the “social-normative coupling” (Slors 2020) that underlies socially extended cognition: they facilitate individuals’ navigation in complex and ambiguous environments through provided orientations, scaffoldings, and affordances. Individuals’ perceptions and understandings of the world are mediated by cognitive institutions, which are enacted through dynamic mind-environment interactions.

Heuristics play a similar (intermediating) role, so individual decisions can be explained in terms of interactions between the heuristics used and their environments (Todd and Gigerenzer 2007). In Gigerenzer’s (ER1) ecological rationality theory heuristics are mostly about individual judgment and decision-making. But this only means that Gigerenzer considered heuristics in terms of individuals and their interactions with environmental affordances. On the contrary, the ER3 view proposes to simultaneously take into account both individualistic and systemic features of mind–environment interactions. This view is interactionist in that it focuses on the mind–environment interactions mediated by cognitive institutions, including heuristics. ER3 view does not contradict Gigerenzer’s tradition (this is the opinion of Petracca and Grayot 2023); on the contrary, the ER3 view is a further development of the ideas of Gigerenzer beyond simple heuristics.

Heuristics are rules of thumb, but, first of all, they are cognitive rules: more precisely, they are simple, intuitive, and task-specific cognitive institutions. The institutional nature of heuristics is manifested in their normativity since heuristics inform rule-following thinking and prescribe the right ways of responding to environmental signals. In addition, heuristics are co-produced by various actors, like any other cognitive institution. So, heuristics should become the focus of cognitive-institutional analysis along with more complex cognitive institutions. Above all, the simplicity of heuristics is relative. In complex activities (such as neurosurgery, cyber-physical systems development, financial analytics, filmmaking, or haute cuisine), fast-and-frugal heuristic rules are quite complex and can be completely incomprehensible to outsiders. Simple heuristics do not work in all environments (which FFH scholars often forget); different environments may require cognitive institutions of different degrees of complexity. The cognitive norms associated with blockchain, robotics, big data, and nanotechnology are examples of highly sophisticated cognitive institutions that are widely used in these specific environments. Therefore, reducing the focus of the whole concept of ecological rationality to simple cognitive rules seems one-sided. We could extend the ecological rationality concept from the FFH program to all cognitive institutions.

Creativity, inventions, and innovations cannot rely solely on simplifying cognitive rules; economizing cognitive resources is important, but it is not the main feature of human cognition. Creative decisions often require substantial cognitive resources. Thus, the market as a cognitive institution helps reduce individuals’ cognitive efforts (Gallagher et al. 2019), but it no less often stimulates actors to develop complex decision-making strategies and practices. This applies, in particular, to R&D, finance, marketing, and strategic planning. In turn, the legal system and science provide much more institutional affordances for joint sophisticated cognitive processes rather than for simplistic ones.

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