Thomas theorem
Encyclopedia
The Thomas theorem is a theory of sociology which was formulated in 1928 by W. I. Thomas
(1863–1947):
In other words, the interpretation of a situation causes the action. This interpretation is not objective. Actions are affected by subjective perceptions of situations. Whether there even is an objectively correct interpretation is not important for the purposes of helping guide individuals' behavior.
In 1923, Thomas
stated more precisely that any definition of a situation will influence the present. Not only that, but—after a series of definitions in which an individual is involved—such a definition also "gradually [influences] a whole life-policy and the personality of the individual himself." Consequently, Thomas stressed societal problems such as intimacy, family, or education as fundamental to the role of the situation when detecting a social world "in which subjective impressions can be projected on to life and thereby become real to projectors."
resulted in the so-called "toilet paper panic." The rumour of an expected shortage of toilet paper—resulting from a decline in the importation of oil—caused people to stockpile supplies of toilet paper and this caused a shortage. This shortage, seeming to validate the rumour, is also an example of a self-fulfilling prophecy
.
The Beauty Contest Theory
, developed by John Maynard Keynes
, justifies why the price of a share
of stock
does not necessarily develop according to rational expectations
. He acts on the assumption that many investors make their decisions not according to their own computations of an asset's worth but by predicting the conclusions of other market participants.
W. I. Thomas
William Isaac Thomas was an American sociologist. He is noted for his innovative work on the sociology of migration on which he co-operated with Florian Znaniecki, and for his formulation of what became known as the Thomas theorem, a fundamental principle of sociology: "If men define situations as...
(1863–1947):
In other words, the interpretation of a situation causes the action. This interpretation is not objective. Actions are affected by subjective perceptions of situations. Whether there even is an objectively correct interpretation is not important for the purposes of helping guide individuals' behavior.
In 1923, Thomas
W. I. Thomas
William Isaac Thomas was an American sociologist. He is noted for his innovative work on the sociology of migration on which he co-operated with Florian Znaniecki, and for his formulation of what became known as the Thomas theorem, a fundamental principle of sociology: "If men define situations as...
stated more precisely that any definition of a situation will influence the present. Not only that, but—after a series of definitions in which an individual is involved—such a definition also "gradually [influences] a whole life-policy and the personality of the individual himself." Consequently, Thomas stressed societal problems such as intimacy, family, or education as fundamental to the role of the situation when detecting a social world "in which subjective impressions can be projected on to life and thereby become real to projectors."
Classic examples
The 1973 oil crisis1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
resulted in the so-called "toilet paper panic." The rumour of an expected shortage of toilet paper—resulting from a decline in the importation of oil—caused people to stockpile supplies of toilet paper and this caused a shortage. This shortage, seeming to validate the rumour, is also an example of a self-fulfilling prophecy
Self-fulfilling prophecy
A self-fulfilling prophecy is a prediction that directly or indirectly causes itself to become true, by the very terms of the prophecy itself, due to positive feedback between belief and behavior. Although examples of such prophecies can be found in literature as far back as ancient Greece and...
.
The Beauty Contest Theory
Keynesian beauty contest
A Keynesian beauty contest is a concept developed by John Maynard Keynes and introduced in Chapter 12 of his work, General Theory of Employment Interest and Money , to explain price fluctuations in equity markets.-Overview:...
, developed by John Maynard Keynes
John Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...
, justifies why the price of a share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
of stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
does not necessarily develop according to rational expectations
Rational expectations
Rational expectations is a hypothesis in economics which states that agents' predictions of the future value of economically relevant variables are not systematically wrong in that all errors are random. An alternative formulation is that rational expectations are model-consistent expectations, in...
. He acts on the assumption that many investors make their decisions not according to their own computations of an asset's worth but by predicting the conclusions of other market participants.
See also
- Definition of the situationDefinition of the situationThe definition of the situation is a fundamental concept in symbolic interactionism advanced by the American sociologist W. I. Thomas. It is a kind of collective agreement between people on the characteristics of a situation, and from there, how to appropriately react and fit into it.Establishing...
- Sapir–Whorf hypothesisSapir–Whorf hypothesisThe principle of linguistic relativity holds that the structure of a language affects the ways in which its speakers are able to conceptualize their world, i.e. their world view...
- Sociology of knowledgeSociology of knowledgeThe Sociology of knowledge is the study of the relationship between human thought and the social context within which it arises, and of the effects prevailing ideas have on societies...
- Self-fulfilling prophecySelf-fulfilling prophecyA self-fulfilling prophecy is a prediction that directly or indirectly causes itself to become true, by the very terms of the prophecy itself, due to positive feedback between belief and behavior. Although examples of such prophecies can be found in literature as far back as ancient Greece and...
- Tinkerbell effectTinkerbell effectThe Tinkerbell effect is a term describing things that are thought to exist only because people believe in them. The effect is named for Tinker Bell, the fairy in the play Peter Pan who is revived from near death by the belief of the audience....
- W.I. ThomasW. I. ThomasWilliam Isaac Thomas was an American sociologist. He is noted for his innovative work on the sociology of migration on which he co-operated with Florian Znaniecki, and for his formulation of what became known as the Thomas theorem, a fundamental principle of sociology: "If men define situations as...