ABSTRACT
From the perspective of explaining social phenomena as the outcomes of actions and interactions of individuals, who try to pursue their best interest, given their understanding of the world, there is much to be gained from a better understanding of the decision-making process of individuals. Neoclassical economics, often described as the science of choice, lacks a theory of decisionmaking. The main reason for this shortcoming is the economists’ difficulty in explaining certain phenomena such as institutions (North 1990; Vanberg 1995), entrepreneurship (Schumpeter 1934; Kirzner 1979), and X-inefficiency (Leibenstein 1966).
