Methodological Interactionism: Theory and Application to the Firm and to the Building of Trust

Recent insights from the ‘embodied cognition’ perspective in cognitive science, supported by neural research, provide a basis for a ‘methodological interactionism’ that transcends both the methodological individualism of economics and the methodological collectivism of (some) sociology, and is consistent with insights from social psychology. It connects with a Mengerian exchange perspective and Hayekian view of dispersed knowledge from Austrian economics. It provides a basis for a new, unified social science that integrates elements from economics, sociology, social psychology and cognitive science. This paper discusses the roots of this perspective, in theory of cognition and meaning, and illustrates its application in a summary of a social-cognitive theory of the firm and an analysis of processes by which trust is built up and broken down