ABSTRACT
In chapter 2 we saw that methodological individualism (MI) does not deny the existence of aggregate relations. On the contrary, one of the key problems MI deals with is how aggregate relationships come about. It was argued that an aggregation step is one of the elements of an individualistic explanation of an aggregate relationship. This chapter concentrates on issues related to what economists have called the ‘aggregation problem’. In particular, it will be assumed throughout this chapter that the individual level relationships that are postulated are based on a theory of rational decision making even though this step will not be made explicit.
