Abstract

We explicate Popper's methodological individualism (MI), taking into consideration his philosophy as a whole and its development. His MI cannot be reduced to individual psychology and/or methodological holism and must be understood from the viewpoint of his metaphysical three-worlds-theory. We particularly emphasize the importance of situational analysis centering on the rationality principle. Concerning this principle there are some misunderstandings, mainly among economists, which can be removed by showing the logic of situational analysis. We demonstrate the applicability and fruitfulness of MI and situational analysis.