Economic performance is constrained by economic sciences which are used to predict and analyze economic models

The idea that economics creates the world rather than describes it has been the subject of several debates (Aspers, 2007; Felin & Foss, 2009a, 2009b; Hodgson, 2010; Miller, 2002; Mirowski & Nik-Khah, 2007). Indeed, claiming that a theory, even if wrong at first, can shape the world and become right seems too strong for many economists, especially if they consider themselves heterodox economists. This affirmation seems too radical because then any theory could be true if it becomes a social norm. From its conceptual point of view, ANT assumes that people act in the markets in accordance with their expectations of other agents’ behavior. These expectations are based on a stock of information and economic theories associated with this stock. Therefore, agents’ expectations can be similar to the concept of expectations used in economic theory: ‘I believe that others act according to a specific theory and I believe that others believe the same thing as I do.’ Thus, the theory gradually becomes a coordinating device (Callon, 2007, p. 322), and there would be no wrong theory per se. Two kinds of criticism follow: (1) Firstly, Mirowski and Nik-Khah (2007) but also Miller (2002) emphasize the conservative way in which performativity theory is engaged when it claims, in opposition to most critics of rationality assumptions, that homo oeconomicus does exist, because of the embeddedness of the economy in economics. To argue that economic theories shape the world is to stop any critics of dominant theories that effectively influence the world. (2) If economics matters in the construction of reality, we need to explain how and why. A recent debate brings this question to light (Felin & Foss, 2009a, 2009b; Ferraro, Pfeffer, & Sutton, 2005, 2009). The key question is: If science has the nature of a convention in the market place, is this convention purely arbitrary? If not, it is necessary to understand why, in a situation of competition between several economic theories, that one is adopted and not the others. Even if we consider this choice as a purely ideological one, ‘an immediate question then is which of many competing ideologies ought to be adopted and why?’ (Felin & Foss, 2009b, p. 676). Felin and Foss call for a ‘reality check’ and argue that only true theories impact social reality because agents only choose to keep a theory after its confrontation with reality. This contests the direction causality. With performativity, a theory T is applied, and then influences agents’ expectations. Felin and Foss reverse this: a theory T is a good description of the social reality; this is why it is used by agents. I think these debates could be endless because the definition of performativity is vague. I also think Felin and Foss’s idea of a ‘reality check’ idea is important. Nevertheless, their concept of truth is problematic because it ignores the main idea in performativity theory which is its constructivist stance. So I propose rebuilding the theory of performativity using some classical tools of economists. Economists themselves have focused on the impact of theory on economy (Brisset, 2012a, 2012b). This interest has gone hand-to-hand with the issue of predictions in social sciences. Morgenstern (1928, 1935, 1972) first emphasized the problem of interaction between social scientists and agents in concluding that social phenomena cannot logically be foreseen. His reasoning rests on a logical analysis: given a certain prediction or explanation, the economist knows that agents will react to it. As a consequence, he anticipates this reaction and revises his prediction which, he also knows, will be taken into account by agents, etc. This process is known as the Morgenstern Paradox.4 It is the starting point for several works on the predictability of social events when agents react to the predictions of economists: a public economic theory is reflexive. Two important articles, Simon (1954) and Grunberg and Modigliani (1954), focus on the possibility of public prediction regarding a vote were the result. Their main goal is to escape from the infinite regress of Morgenstern’s reasoning. The core argument is that there exists at least one fixed point in the agents’ expectation function – i.e. the way agents build predictions regarding economists’ prediction – provided the variables predicted have upper (K) and lower bounds (k) and a reaction function that is continuous over the interval k ≤ P ≤ K, where P is the public prediction (Grunberg, 1986, p. 478). In other words, there exists at least one prediction which remains correct even if agents take it into consideration in forming their expectations: ‘The fixed point theorem demonstrates, when its assumptions are satisfied, only that there exists at least one point, F, in which the actual vote (or the expected vote in the probabilistic case) equals the predicted’ (Simon, 1982, p. 610). This prediction is, thus, self-fulfilling. 5