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Oracles

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  • Peter T Leeson

Abstract

This article uses rational choice theory to analyze oracles: media for divining answers to questions about the unknown. I develop a simple theory of oracles with rational agents. My theory explains oracles as institutional solutions to “low-grade†interpersonal conflicts—petty grievances and frustrations resulting from perceptions or feelings of personal offense—that government is unable to resolve. Oracles secure correlated equilibrium in situations where, without them, individuals would be stuck in a suboptimal world of simple mixed-strategy equilibrium. By randomizing strategies about how to behave in situations of low-grade conflict and coordinating individuals’ choices across that randomization, oracles resolve low-grade conflict efficiently. To investigate my theory I consider a society of persons who rely exclusively on oracles to decide how to behave in situations of low-grade conflict: the Azande of Africa. Using the equivalent of a “Magic 8 Ball†to resolve such conflict improves Zande welfare.

Suggested Citation

  • Peter T Leeson, 2014. "Oracles," Rationality and Society, , vol. 26(2), pages 141-169, May.
    • Handle: RePEc:sae:ratsoc:v:26:y:2014:i:2:p:141-169
    DOI: 10.1177/1043463113512997
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    References listed on IDEAS

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    1. Leeson, Peter T. & Coyne, Christopher J., 2012. "Sassywood," Journal of Comparative Economics, Elsevier, vol. 40(4), pages 608-620.
    2. Iannaccone, Laurence R. & Haight, Colleen E. & Rubin, Jared, 2011. "Lessons from Delphi: Religious markets and spiritual capitals," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 326-338, March.
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    4. Peter T. Leeson, 2007. "Trading with Bandits," Journal of Law and Economics, University of Chicago Press, vol. 50(2), pages 303-321.
    5. Peter T. Leeson, 2009. "The Laws of Lawlessness," The Journal of Legal Studies, University of Chicago Press, vol. 38(2), pages 471-503, June.
    6. Peter T. Leeson, 2014. ""God Damn": The Law and Economics of Monastic Malediction," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(1), pages 193-216.
    7. James Peck & Karl Shell, 1991. "Market Uncertainty: Correlated and Sunspot Equilibria in Imperfectly Competitive Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(5), pages 1011-1029.
    8. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January.
    9. Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-468, October.
    10. Skarbek, David, 2011. "Governance and Prison Gangs," American Political Science Review, Cambridge University Press, vol. 105(4), pages 702-716, November.
    11. Peter T. Leeson, 2012. "Ordeals," Journal of Law and Economics, University of Chicago Press, vol. 55(3), pages 691-714.
    12. Posner, Richard A, 1980. "A Theory of Primitive Society, with Special Reference to Law," Journal of Law and Economics, University of Chicago Press, vol. 23(1), pages 1-53, April.
    13. Peter Leeson, 2013. "Gypsy law," Public Choice, Springer, vol. 155(3), pages 273-292, June.
    14. Peter T. Leeson, 2013. "Vermin Trials," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 811-836.
    15. Skarbek, David, 2012. "Prison gangs, norms, and organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 96-109.
    16. Peter T. Leeson, 2008. "Social Distance and Self-Enforcing Exchange," The Journal of Legal Studies, University of Chicago Press, vol. 37(1), pages 161-188, January.
    17. repec:dau:papers:123456789/181 is not listed on IDEAS
    18. Cass, David & Shell, Karl, 1983. "Do Sunspots Matter?," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 193-227, April.
    19. Peter Leeson, 2009. "The calculus of piratical consent: the myth of the myth of social contract," Public Choice, Springer, vol. 139(3), pages 443-459, June.
    20. Peter T. Leeson, 2007. "An-arrgh-chy: The Law and Economics of Pirate Organization," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1049-1094, December.
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    Citations

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    Cited by:

    1. Peter T. Leeson & Paola A. Suarez, 2015. "Superstition and Self-Governance," Advances in Austrian Economics, in: New Thinking in Austrian Political Economy, volume 19, pages 47-66, Emerald Group Publishing Limited.
    2. Escalante, Edwar E. & March, Raymond J., 2020. "Fighting on Christmas: brawling as self-governance in rural Peru," Journal of Institutional Economics, Cambridge University Press, vol. 16(3), pages 355-368, June.
    3. Kimbrough, Erik O. & Rubin, Jared & Sheremeta, Roman M. & Shields, Timothy W., 2015. "Commitment problems in conflict resolution," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 33-45.
    4. Gershman, Boris, 2015. "The economic origins of the evil eye belief," Journal of Economic Behavior & Organization, Elsevier, vol. 110(C), pages 119-144.
    5. Vladimir Vladimirovich Maltsev, 2020. "Economics of the Sacramental Bread Ordeal in the Russian Princedoms Period," Journal of Economics, Management and Religion (JEMAR), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 1-16, December.
    6. Gershman, Boris, 2016. "Witchcraft beliefs and the erosion of social capital: Evidence from Sub-Saharan Africa and beyond," Journal of Development Economics, Elsevier, vol. 120(C), pages 182-208.
    7. Peter T. Leeson & Jacob W. Russ, 2018. "Witch Trials," Economic Journal, Royal Economic Society, vol. 128(613), pages 2066-2105, August.
    8. Manvir Singh & Pascal Boyer & Leeson, Peter T & Mckay Ryan & Bentall, Richard P & Sarah Peacey & Ruth Mace & Schimmelpfennig, Robin & Muthukrishna, Michael, 2021. "Magic, explanations, and evil: the origins and design of witches and sorcerers," Post-Print hal-03256601, HAL.
    9. Palagashvili,Liya & Piano,Ennio & Skarbek,David, 2017. "The Decline and Rise of Institutions," Cambridge Books, Cambridge University Press, number 9781316649176, October.
    10. Gershman, Boris, 2020. "Witchcraft beliefs as a cultural legacy of the Atlantic slave trade: Evidence from two continents," European Economic Review, Elsevier, vol. 122(C).

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