Reflexivity (social theory)
In sociology, reflexivity is an act of self-reference where examination or action 'bends back on', refers to, and affects the entity instigating the action or examination. In brief, reflexivity refers to circular relationships between cause and effect. A reflexive relationship is bidirectional; with both the cause and the effect affecting one another in a situation that renders both functions causes and effects. Reflexivity is related to the concept of feedback and positive feedback in particular.

# The concept of reflexivity
In social theory, reflexivity may occur when theories in a discipline should apply equally forcefully to the discipline itself, for example in the case that the theories of knowledge construction in the field of Sociology of Scientific Knowledge should apply equally to knowledge construction by Sociology of Scientific Knowledge practitioners, or when the subject matter of a discipline should apply equally well to the individual practitioners of that discipline, for example when psychological theory should explain the psychological mental processes of psychologists. More broadly, reflexivity is considered to occur when the observations or actions of observers in the social system affect the very situations they are observing, or theory being formulated is disseminated to and affects the behaviour of the individuals or systems the theory is meant to be objectively modelling. Thus for example an anthropologist living in an isolated village may affect the village and the behaviour of its citizens  that he or she is studying. The observations are not independent of the participation of the observer.
Reflexivity is, therefore, a methodological issue in the social sciences analogous to the observer principle. Within that part of recent sociology of science that has been called the strong programme, reflexivity is suggested as a methodological norm or principle, meaning that a full  theoretical account of the social construction of, say, scientific, religious or ethical knowledge systems, should itself be explainable by the same principles and methods as used for  accounting for these other knowledge systems. This points to a general feature of naturalised epistemologies, that such theories of knowledge allows for specific fields of research to elucidate other fields as part of an overall self-reflective process: Any particular field of research occupied with aspects of knowledge processes in general (e.g., history of science, cognitive science, sociology of science, psychology of perception, semiotics, logic, neuroscience) may reflexively study other such fields yielding to an overall improved reflection on the conditions for creating knowledge.
Reflexivity includes both a subjective process of self-consciousness inquiry and the study of social behavior with reference to theories about social relationships.

# History
The principle of reflexivity was perhaps first enunciated by the sociologist William Thomas (1923, 1928) as the Thomas theorem: that 'the situations that men define as true, become true for them.'
Sociologist Robert K. Merton (1948, 1949) built on the Thomas principle to define the notion of a self-fulfilling prophecy: that once a prediction or prophecy is made, actors may accommodate their behaviours and actions so that a statement that would have been false becomes true or, conversely, a statement that would have been true becomes false - as a consequence of the prediction or prophecy being made. The prophecy has a constitutive impact on the outcome or result, changing the outcome from what would otherwise have happened.
Reflexivity was taken up as an issue in science in general by Popper (1957), who called it the 'Oedipal effect', and more comprehensively by Nagel (1961). Reflexivity presents a problem for science because if a prediction can lead to changes in the system that the prediction is made in relation to, it becomes difficult to assess scientific hypotheses by comparing the predictions they entail with the events that actually occur. The problem is even more difficult in the social sciences.
Reflexivity has been taken up as the issue of "reflexive prediction" in economic science by Grunberg and Modigliani (1954) and Herbert Simon (1954), has been debated as a major issue in relation to the Lucas Critique, and has been raised as a methodological issue in economic science arising from the issue of reflexivity in the Sociology of Scientific Knowledge (SSK) literature.
Reflexivity has emerged as both an issue and a solution in modern approaches to the problem of structure and agency, for example in the work of Anthony Giddens in his structuration theory and Pierre Bourdieu in his genetic structuralism.
Giddens, for example, noted that constitutive reflexivity is possible in any social system, and that this presents a distinct methodological problem for the social sciences. Giddens accentuated this theme with his notion of "reflexive modernity" - the argument that, over time, society is becoming increasingly more self-aware, reflective, and hence reflexive.
Bourdieu argued that the social scientist is inherently laden with biases, and only by becoming reflexively aware of those biases can the social scientists free themselves from them and aspire to the practice of an objective science. For Bourdieu, therefore, reflexivity is part of the solution, not the problem.
Michel Foucault's The Order of Things can be said to touch on the issue of Reflexivity. Foucault examines the history of western thought since the Renaissance and argues that each historical epoch (he identifies 3, while proposing a 4th) has an episteme, or "a historical a priori", that structures and organizes knowledge. Foucault argues that the concept of man emerged in the early 19th century, what he calls the "Age of Man", with the philosophy of Immanuel Kant. He finishes the book by posing the problem of the age of man and our pursuit of knowledge- where "man is both knowing subject and the object of his own study"; thus, Foucault argues that the social sciences, far from being objective, produce truth in their own mutually exclusive  discourses.

# Reflexivity in Economics
Reflexivity is discordant with equilibrium theory, which stipulates that markets move towards equilibrium and that non-equilibrium fluctuations are merely random noise that will soon be corrected. In equilibrium theory, prices in the long run at equilibrium reflect the underlying fundamentals, which are unaffected by prices. Reflexivity asserts that prices do in fact influence the fundamentals and that these newly-influenced set of fundamentals then proceed to change expectations, thus influencing prices; the process continues in a self-reinforcing pattern. Because the pattern is self-reinforcing, markets tend towards disequilibrium--a case in which every outcome is uniquely different from the past in a visible absence of an equilibrium.
Billionaire investor, George Soros, has been a huge proponent of the reflexivity in economics and has invested tens of millions of dollars towards the promotion of his theory.

# The problem of reflexivity
Flanagan (1981) and others have argued that reflexivity complicates all three of the traditional roles that are typically played by a classical science: explanation, prediction and control.
The fact that individuals and social collectivities are capable of self-inquiry and adaptation is a key characteristic of real-world social systems, differentiating the social sciences from the physical sciences.
Reflexivity, therefore, raises real issues regarding the extent to which the social sciences may ever be 'hard' sciences analogous to classical physics, and raises questions about the nature of the social sciences.