Praxeology, Experimental Economics and the Process
of Choice: F.A. Hayek and Vernon Smith on the Misesian
Nikolai G. Wenzel
Published online: 15 July 2014
Springer Science+Business Media New York 2014
Abstract Mises’s action axiom postulates that human action is purposeful behavior.
While this axiom is the building block for a powerful methodology, it is also incom-
plete, because it sets aside the underlying processes of decision-making. And while
Mises does not dismiss the gap between intention and action, he is silent on it,
relegating such a study to psychology. We contend that a study of underlying thought
patterns and the process of choice – rather than contradicting praxeology and the action
axiom – in fact complements the writings of Mises. To demonstrate this, we look at two
authors: F.A. Hayek and Vernon Smith. Hayek’s theory of the sensory order sheds light
on the process of choice, and explains how decision-making is contextually embedded.
Smith’s concepts of ecological rationality and neurological “hard-wiring” help us
understand decision-making. We argue that cognitive foundations enrich our under-
standing of the process of choice, and thus of the Misesian action axiom.
JEL Classification B41
With the introduction of mathematical modeling in the 19th century and its subsequent
hegemony, economics as a discipline has largely become a de facto branch of applied
mathematics. Working in the face of this general trend, heterodox economists who
endeavor to explain the complexity of human action have splintered in many directions.
Recognizing the oversimplifying assumptions of equilibrium modeling, constrained
optimization rational choice modeling, and econometric correlation modeling, non-
Rev Austrian Econ (2016) 29:163–176
N. G. Wenzel (*)
Department of Economics and Finance, Lutgert College of Business, Florida Gulf Coast University,
10501 FGCU Boulevard South, Fort Myers, FL 33965, USA