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on History and Philosophy of Economics |
| By: | Richard Whatmore (University of St Andrews [Scotland]) |
| Date: | 2018–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01821216&r=hpe |
| By: | André Lapidus (PHARE - Pôle d'Histoire de l'Analyse et des Représentations Economiques - UP1 - Université Panthéon-Sorbonne - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper shows that Hume's theory of passion, such as elaborated mainly in book II of the Treatise of Human Nature (1739-40) and in the Dissertation on the Passions (1757), gives rise to a conception of the decision process which challenges the canonical approach to the rationality of decision, as rationality of preferences or rationality of choice. It shows that when adopting a Humean perspective, rationality is not embodied as consistency requirements of individual behaviour, but may emerge as a possible outcome of some dispositions of our mind, which make the world inhabited by our emotions. |
| Keywords: | Hume, economic philosophy, rationality, decision, passion,emotion, desire, preference, will, choice |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01831901&r=hpe |
| By: | Carlos Eduardo Suprinyak (Cedeplar-UFMG) |
| Abstract: | Accounts of Nicholas Georgescu-Roegen’s career as an economist usually focus either on the brilliance of his pioneer contributions to mathematical economics during the 1930s, or more frequently, on his later conversion to a critical approach to economic theory anchored on the centrality of the entropy law in a dynamic setting. These two disparate moments, however, were connected by Georgescu-Roegen’s strong attraction to the study of the problems afflicting underdeveloped societies. This began with his work on the agricultural economy of his native Romania, produced under the auspices of Harvard’s Russian Research Center in the late 1940s. Thenceforth, he embarked on a journey that spawned his early interest in Leontief-type linear models, an extended tour of Southeast Asia commissioned by Vanderbilt University’s Graduate Program in Economic Development, and several visits to Brazil during the 1960s to assist in the development of academic economics in the country. The paper highlights these lesser-known aspects of Georgescu-Roegen’s intellectual trajectory, while using his case to illustrate some of the paths open for inquiry during the heyday of development economics. |
| Keywords: | Nicholas Georgescu-Roegen, development economics, Vanderbilt University, economic programming, modernization. |
| JEL: | B31 B25 O10 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td584&r=hpe |
| By: | Quentin Couix (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Despite his early contribution to the rise of mathematics in economics, Georgescu-Roegen's later methodological criticism of models has received little attention from historians and philosophers of economics. This paper attempts to fill this gap following two lines. First, I examine his explicitly methodological claims and connect them with related topics in economic methodology. Building on the distinction between dialectical and arithmomorphic concepts, I characterise his approach to theory-making as a three steps process of idealisation, isolation and arithmetisation. In this framework, models perform two functions, checking for logical consistency and facilitating understanding, which can be related to the idea of modelling as theorising. I then confront these general principles with Georgescu-Roegen's flow-fund model of production. I use the methodology as a reading grid of this theory, while examining its limits and complementary principles in practice. This shows a great deal of consistency, where idealisation provides conceptual foundations, isolation determines the relevant problems, and models are built according to structural consistency. The two functions of models are then illustrated by the logical derivation of older principles formulated by Babbage and Smith, and the understanding of the different organisational patterns of production. But some slightly different functions also appear when specific configurations of the model enable to check the conceptual consistency of other theories, or the understanding provided by the model contributes to the formation of new concepts. Hence, the consistency and the complementarity between Georgescu-Roegen's methodology and practice of theory-making provide interesting insights and a useful background for further investigations. |
| Abstract: | Malgré l'importante contribution de Georgescu-Roegen à l'économie mathématique, sa critique méthodologique ultérieure des modèles a reçu peu d'attention de la philosophie économique. Cet article comble ce vide en examinant en premier lieu sa méthodologie explicite et en la reliant à la littérature. Partant de la distinction entre les concepts dialectiques et arithmomorphiques, je caractérise son rapport à l'élaboration théorique comme un processus en trois étapes d'idéalisation, d'isolement et d'arithmétisation. Dans ce cadre, les modèles remplissent deux fonctions, de validation de la cohérence logique et de facilitation de la compréhension. Je confronte ensuite ces principes au modèle flux-fonds de production de Georgescu-Roegen. Sa méthodologie sert de grille de lecture de la théorie, qui révèle en retour limites et principes complémentaires. L'idéalisation fournit les fondements conceptuels, l'isolement délimite les problèmes pertinents, et la cohérence structurelle est rigoureusement respectée, tandis que les deux fonctions des modèles sont illustrées par la dérivation de principes antérieurs et la compréhension des modes d'organisation. Mais d'autres fonctions apparaissent : la validation de la cohérence conceptuelle et la contribution à la formation de nouveaux concepts. Par conséquent, la méthodologie de Georgescu-Roegen et sa pratique de la théorie fournissent un point de vue utile pour mieux comprendre sa pensée. |
| Keywords: | methodology,philosophy,models,flow-fund,production function,input-output,Georgescu-Roegen,méthodologie,philosophie,modèles,flux-fond,fonction de production,entrée-sortie,substitution |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01854031&r=hpe |
| By: | Alain Marciano (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier); Steve Medema |
| Abstract: | The University of Chicago occupies a central place in the history of law and economics. To this point, however, scant attention has been given in the literature to how the prospect of an economic analysis of law was received within the Law School at Chicago when the subject was in its infancy. In this paper we focus on the work of two prominent dissenters: Law professors Walter J. Blum and Harry Kalven, Jr. We show that, although immersed in economics and interacting with the main actors of the law and economics movement in the early 1950s, Blum and Kalven largely rejected economics as a possible and useful help for solving legal problems, both because of their concerns about the utility of economics in the legal realm and because of their sense that economics and law are grounded in fundamentally incompatible normative visions. |
| Keywords: | History of Economic Thought through 1925,History of Economic Ideas,History of Political Economy,accidents, Automobile, Tort Law,Economic analysis of law, Chicago, Blum, Kalven, Liability |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01836082&r=hpe |
| By: | Clement A. Tisdell |
| Abstract: | Provides a sketch of the development of the concept of bounded rationality in economic thought. The concept of rationality has several meanings. These different meanings are taken into account in considering the further development of economic thought. Different views of ecological rationality are critically examined in the light of these concepts. Whether or not various theories of behavioral economics can be classified as exhibiting bounded rationality is discussed. Satisficing behavior is commonly associated with bounded rationality but as demonstrated, it is not the only reason for adopting such behavior. The idea of some authors that optimization models under constraints are of little or no relevance to bounded rationality is rejected. Bounded rationality is an important contributor to the diversity of (economic) behaviors. This is stressed. Whether or not a behavior is rational depends to a considerable extent on the situation (the constraints) that decision-makers or actors face. The time-constraint is very important as an influence on the rationality of decisions. Aspects of this are covered. |
| Keywords: | Institutional and Behavioral Economics |
| Date: | 2017–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uqseet:264873&r=hpe |
| By: | Jean-Baptiste Fleury (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique); Alain Marciano (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier) |
| Abstract: | This article studies the few works James Buchanan wrote on education from the end of the 1950s to the early 1970s. These neglected works tell us important things about how Buchanan's ideas on constitutions evolved through time, because they provided Buchanan with the opportunity to apply his ideas about constitutions and, in return, nurture his theoretical thinking. Two historical developments were of importance in the evolution of Buchanan's thinking: the Southern reactions to the Supreme Court's injunction to desegregate public schools in the late 1950s, and, in the late 1960s, university unrest. We argue that Buchanan moved from a rather optimistic conception that constitutions complement market mechanisms, and constitutional manipulation can be tolerated if market mechanisms were sufficiently important to nonetheless let individuals do what they want, to a really pessimistic view – a constitution is absolutely necessary to control and even coerce behaviors. Behind these claims stands Buchanan's conception of what is a " good society " and of the role of the economist in its defense. |
| Keywords: | Warren Court, Liberalism, University, Education, Constitutional economics,James Buchanan,Brown vs Board of education,History of Economic Thought,History of Political Economy |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01835036&r=hpe |
| By: | Lozovanu, Dmitrii; Pickl, Stefan |
| Abstract: | From Contributions to game theory and management, vol. X. Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | two-players stochastic games, average payoffs, stationary Nash equilibria, optimal stationary strategies, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10460&r=hpe |
| By: | Rivera, Thomas J (HEC Paris); Scarsini, Marco (LUISS, Dipartimento di Economia e Finanza); Tomala, Tristan (HEC Paris) |
| Abstract: | We consider a model of bottleneck congestion in discrete time with a penalty cost for being late. This model can be applied to several situations where agents need to use a capacitated facility in order to complete a task before a hard deadline. A possible example is a situation where commuters use a train service to go from home to office in the early morning. Trains run at regular intervals, take always the same time to cover their itinerary, and have a fixed capacity. Commuters must reach their office in time. This is a hard constraint whose violation involves a heavy penalty. Conditionally on meeting the deadline, commuters want to take the train as late as possible. With the intent of considering strategic choices of departure, we model this situation as a game and we show that it does not have pure Nash equilibria. Then we characterize the best and worst mixed Nash equilibria, and show that they are both inefficient with respect to the social optimum. We then show that there exists a correlated equilibrium that approximates the social optimum when the penalty for missing the deadline is sufficiently large. |
| Keywords: | Nash equilibrium; correlated equilibrium; efficiency of equilibria; price of anarchy; price of stability; price of correlated stability. |
| JEL: | C72 C73 |
| Date: | 2018–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1289&r=hpe |
| By: | Paul Pezanis-Christou (School of Economics, University of Adelaide); Werner Güth (Max Planck Institute for Research on Collective Goods (Bonn) and LUISS (Rome)) |
| Abstract: | We justify risk neutral equilibrium bidding in commonly known fair division games with incomplete information in an evolutionary setup by postulating (i) minimal common knowledge assumptions, (ii) optimally responding agents to conjectural beliefs about how others behave and (iii) evolution of conjectural beliefs with fitness measured by expected payoffs. We axiomatically justify the game forms, derive the evolutionary games for first- and second-price fair division and determine the evolutionarily stable conjectures. The latter coincide with equilibrium bidding, irrespectively of the number of bidders, i.e., heuristic belief adaptation implies the same bidding behavior as equilibrium analysis based on common knowledge and counterfactual bids. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2018-09&r=hpe |
| By: | Johan Fourie (LEAP, Department of Economics, Stellenbosch University) |
| Abstract: | African economic history is experiencing a renaissance, and South African economic history likewise. Combining newly transcribed large historical datasets with econometric techniques now standard in the economics literature, economic historians have greatly improved our understanding of South Africa's development over the centuries. Yet many questions remain. This paper reviews the most recent contributions, and outlines the road ahead. |
| Keywords: | economic history, historical economics, cliometrics, econometric history, South Africa, Cape Colony |
| JEL: | N01 N37 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers307&r=hpe |
| By: | Rozen, Victor V. |
| Abstract: | in Contributions to game theory and management, vol. X. Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | game with ordered outcomes, saddle point, general equilibrium point, transitive equilibrium point, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10465&r=hpe |
| By: | Zenkevich, Nikolay; Reusova, Anastasiia |
| Abstract: | in Contributions to game theory and management, vol. X. Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | strategic alliance stability, internal stability, external stability, trust, long-term orientation, resource complementarity, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10470&r=hpe |
| By: | Nowik, Irit; Nowik, Tahl |
| Abstract: | From Contributions to game theory and management, vol. X. Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10461&r=hpe |
| By: | Debraj Ray; Rajiv Vohra |
| Abstract: | A game of love and hate is one in which a player’s payoff is a function of her own action and the payoffs of other players. For each action profile, the associated payoff profile solves an interdependent utility system, and if that solution is bounded and unique for every profile we call the game coherent. Coherent games generate a standard normal form. Our central theorem states that every Nash equilibrium of such a game is Pareto optimal, in sharp contrast to the general prevalence of inefficient equilibria in the presence of externalities. While externalities in our model are restricted to flow only through payoffs there are no other constraints: they could be positive or negative, or of varying sign. We further show that our coherence and continuity requirements are tight. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2018-8&r=hpe |
| By: | Guilhem Lecouteux (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique, UCA - Université Côte d'Azur) |
| Date: | 2018–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01837218&r=hpe |
| By: | Tsvetkova, Milena; Wagner, Claudia; Mao, Andrew |
| Abstract: | From small communities to entire nations and society at large, inequality in wealth, social status, and power is one of the most pervasive and tenacious features of the social world. What causes inequality to emerge and persist? In this study, we investigate how the structure and rules of our interactions can increase inequality in social groups. Specifically, we look into the effects of four structural conditions—network structure, network fluidity, reputation tracking, and punishment institutions—on the distribution of earnings in network cooperation games. We analyze 33 experiments comprising 96 experimental conditions altogether. We find that there is more inequality in clustered networks compared to random networks, in fixed networks compared to randomly rewired and strategically updated networks, and in groups with punishment institutions compared to groups without. Secondary analyses suggest that the reasons inequality emerges under these conditions may have to do with the fact that fixed networks allow exploitation of the poor by the wealthy and clustered networks foster segregation between the poor and the wealthy, while the burden of costly punishment falls onto the poor, leaving them poorer. Surprisingly, we do not find evidence that inequality is affected by reputation in a systematic way but this could be because reputation needs to play out in a particular network environment in order to have an effect. Overall, our findings suggest possible strategies and interventions to decrease inequality and mitigate its negative impact, particularly in the context of mid- and large-sized organizations and online communities. |
| JEL: | J1 |
| Date: | 2018–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:89716&r=hpe |
| By: | Richard N. Langlois (University of Connecticut) |
| Abstract: | In 1919, General Motors acquired a non-controlling equity interest in the Fisher Body Company and signed a ten-year contract stipulating the terms under which Fisher would be the exclusive supplier of car bodies to GM. In 1926, GM acquired the remaining equity in Fisher Body. In 1978, Benjamin Klein, Robert Crawford, and Armen Alchian used the GM acquisition of Fisher Body as an illustration of the asset-specificity or “holdup” theory of vertical integration. Their paper became widely influential, and the Fisher case quickly developed into an omnipresent meme in the economics of organization. In the year 2000, however, the meme suddenly exploded into a cause célèbre. No fewer than five papers appeared attacking both the theory and the history in the Klein et al. account – including a paper by Nobel Laureate Ronald Coase, who entered into an often-contentious debate with Klein. This paper tells the story of the Fisher Body acquisition and of the academic controversy it spawned. The controversy has lessons – including some surprising and ironic lessons – for the economic history of the American automobile industry, for the economics of organization, and for the conduct of inquiry in economics. |
| Keywords: | transaction costs, vertical integration, asset specificity, automobile industry |
| JEL: | B2 D23 D86 L14 L24 L62 N62 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2018-13&r=hpe |
| By: | Timothy Guinnane (Economic Growth Center, Yale University); Jakob Schneebacher (Oxford University) |
| Abstract: | A considerable theoretical and empirical literature studies the corporation's capital structure. Economists have paid less attention to capital structure in other enterprise forms such as partnerships, which typically operate under different legal constraints and appeal to smaller enterprises. Yet partnerships were the dominant business organization for the period in which wealthy countries first experienced long-run economic growth, and they remain quantitatively significant in some important economies today. We use a series of simple models to study several aspects of the partnership's choice of capital structure. We show that common features of partnerships reflect the difficulty of raising capital for ventures whose prospects are hard to judge. We also consider the implications of a rule in partnership law that prevents limited partners from playing a role in management, and the implications of the partnership form for projects subject to hold-up. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:1061&r=hpe |
| By: | Konyukhovskiy, Pavel V.; Holodkova, Victoria V. |
| Abstract: | Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | cooperative games, cooperative models interaction of the international centers of power, stochastic cooperative games, imputations, Shapley value, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10457&r=hpe |
| By: | Gao, Hongwei; Pankratova, Yaroslavna |
| Abstract: | Collected papers presented on the Tenth International Conference Game Theory and Management /Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | dynamic games, cooperation, network,, pairwise interactions, time-consistency, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10451&r=hpe |
| By: | Gavrilovich, Misha; Kreps, Victoria |
| Abstract: | Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | zero-sum game, incomplete information, asymmetry, finite automata, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10452&r=hpe |
| By: | Tarashnina, Svetlana; Pankratova, Yaroslavna; Purtyan, Aleksandra |
| Abstract: | in Contributions to game theory and management, vol. X. Collected papers presented on the Tenth International Conference Game Theory and Management / Editors Leon A. Petrosyan, Nikolay A. Zenkevich. Ó SPb.: Saint Petersburg State University, 2017. Ó 404 p. |
| Keywords: | dynamic traveling salesman problem, non-zero sum game, Nash equilibrium, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:10467&r=hpe |
| By: | José M. Gaspar (ISEG, University of Lisbon. CPBS and CEGE, Universidade Católica Portuguesa. CEF.UP.) |
| Abstract: | This paper serves as an orientation towards the understanding of the theoretical limitations in New Economic Geography and seeks to provide a prospective assessment of new avenues of research along which the field could improve and develop. We identify many of the persistent features and assumptions which have thwarted the evolution of New Economic Geography and led to a sprawl of criticism within the field. This criticism has opened a discussion towards the identification of new possible directions, some of which are being progressively undertaken, while others raise issues that are difficult to overcome both analytically and empirically. |
| Keywords: | new economic geography; limitations; future research; |
| JEL: | R10 R12 R23 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:605&r=hpe |
| By: | David N.F. Bell; David G. Blanchflower |
| Abstract: | In this paper we build on our earlier work on underemployment using data from the UK. In particular, we explore their well-being based on hours preferences rather than on involuntary part-time work used in the prior literature. We make use of five main measures of well-being: happiness; life satisfaction; whether life is worthwhile; anxiety and depression. The underemployed have higher levels of well-being than the unemployed and disabled but lower levels than any other group of workers, full or part-time. The more that actual hours differ from preferred hours the lower is a worker's well-being. This is true for those who say they want more hours (the underemployed) and those who say they want less (the over employed). We find strong evidence of a rise in depression and anxiety (negative affect) in the years since the onset of austerity in 2010 that is not matched by declines in happiness measures (positive affect). The fear of unemployment obtained from monthly surveys from the EU has also been on the rise since 2015. We find evidence of an especially large rise in anxiety and depression among workers in general and the underemployed in particular. The underemployed don't want to be underemployed. |
| JEL: | I20 I31 J64 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24840&r=hpe |
| By: | Wolfgang Drechsler |
| Abstract: | The Reality and Diversity of Buddhist Economics (With Case Studies of Thailand, Bhutan and Yogyakarta) |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:tth:wpaper:69&r=hpe |
| By: | Jordi Galí |
| Abstract: | I provide an overview of recent developments in monetary economics, with an emphasis on extensions of the New Keynesian framework that assume a zero lower bound on the short term nominal rate, as well as models with household heterogeneity. |
| JEL: | E32 E52 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24845&r=hpe |
| By: | Moulaert, Frank |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus009:6429&r=hpe |
| By: | Alexander J. Stewart; Nolan McCarty; Joanna J. Bryson |
| Abstract: | Political and social polarization are a significant cause of conflict and poor governance in many societies, thus understanding their causes is of considerable importance. Here we demonstrate that shifts in socialization strategy similar to political polarization and/or identity politics could be a constructive response to periods of apparent economic decline. We start from the observation that economies, like ecologies are seldom at equilibrium. Rather, they often suffer both negative and positive shocks. We show that even where in an expanding economy, interacting with diverse out-groups can afford benefits through innovation and exploration, if that economy contracts, a strategy of seeking homogeneous groups can be important to maintaining individual solvency. This is true even where the expected value of out group interaction exceeds that of in group interactions. Our account unifies what were previously seen as conflicting explanations: identity threat versus economic anxiety. Our model indicates that in periods of extreme deprivation, cooperation with diversity again becomes the best (in fact, only viable) strategy. However, our model also shows that while polarization may increase gradually in response to shifts in the economy, gradual decrease of polarization may not be an available strategy; thus returning to previous levels of cooperation may require structural change. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1807.11477&r=hpe |
| By: | Fabian Paetzel (Department of Economics & FOR 2104, Helmut-Schmidt-University); Rupert Sausgruber (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | We study the role of performance differences in a task requiring cognitive effort on in-group bias. We show that the in-group bias is strong in groups consisting of high-performing members, and it is weak in low-performing groups. This holds although high-performing subjects exhibit no in-group bias as members of minimal groups, whereas low-performing subjects strongly do. We also observe instances of low-performing subjects punishing the in-group favoritism of low-performing peers. The same does not occur in high-performing or minimal groups where subjects generally accept that decisions are in-group biased. |
| Keywords: | cognitive ability, group identity, entitlements, social preferences, minimal groups, punishment, social norms, social status |
| JEL: | C92 D31 D63 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp265&r=hpe |
| By: | Lawrence J. Christiano; Martin S. Eichenbaum; Mathias Trabandt |
| Abstract: | The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policy makers is how to assess the relative strength of those forces. Dynamic Stochastic General Equilibrium (DSGE) models are the leading framework that macroeconomists have for dealing with this challenge in an open and transparent manner. This paper reviews the state of DSGE models before the financial crisis and how DSGE modelers responded to the crisis and its aftermath. In addition, we discuss the role of DSGE models in the policy process. |
| JEL: | E0 E3 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24811&r=hpe |
| By: | Daron Acemoglu; Alexander Wolitzky |
| Abstract: | We propose a model of the emergence of equality before the law. A society can support “effort” (“cooperation”, “pro-social behavior”) using the “carrot” of future cooperation or the “stick” of coercive punishment. Community enforcement relies only on the carrot and involves low coercion, low inequality, and low effort. A society in which the elite control the means of violence supplements the carrot with the stick, and involves high coercion, high inequality, and high effort. In this regime, elites are privileged: they are not subject to the same coercive punishments as non-elites. We show that it may be optimal—even from the viewpoint of the elite—to establish equality before the law, where all agents are subject to the same coercive punishments. The central mechanism is that equality before the law increases elites’ effort, which in turn encourages even higher effort from non-elites. Equality before the law combines high coercion and low inequality—in our baseline model, elites exert the same level of effort as non-elites. Factors that make the emergence of equality before the law more likely include limits on the extent of coercion, greater marginal returns to effort, increases in the size of the elite group, greater political power for non-elites, and under some additional conditions, lower economic inequality. |
| JEL: | C73 K10 P16 P51 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24681&r=hpe |
| By: | Timothy N. Bond; Kevin Lang |
| Abstract: | We replicate nine key results from the happiness literature: the Easterlin Paradox, the ‘U-shaped’ relation between happiness and age, the happiness trade-off between inflation and unemployment, cross-country comparisons of happiness, the impact of the Moving to Opportunity program on happiness, the impact of marriage and children on happiness, the ‘paradox’ of declining female happiness, and the effect of disability on happiness. We show that none of the findings can be obtained relying only on nonparametric identification. The findings in the literature are highly dependent on one's beliefs about the underlying distribution of happiness in society, or the social welfare function one chooses to adopt. Furthermore, any conclusions reached from these parametric approaches rely on the assumption that all individuals report their happiness in the same way. When the data permit, we test for equal reporting functions, conditional on the existence of a common cardinalization from the normal family. We reject this assumption in all cases in which we test it. |
| JEL: | D63 I31 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24853&r=hpe |
| By: | Martin Ravallion (Georgetown University) |
| Abstract: | The rising popularity of randomized controlled trials (RCTs) in development applications has come with continuing debates on the pros and cons of this approach. The paper revisits the issues. While RCTs have a place in the toolkit for impact evaluation, an unconditional preference for RCTs as the “gold standard” is questionable. The statistical case is unclear on a priori grounds; a stronger ethical defense is often called for; and there is a risk of distorting the evidence-base for informing policymaking. Going forward, pressing knowledge gaps should drive the questions asked and how they are answered, not the methodological preferences of some researchers. The gold standard is the best method for the question at hand. |
| Date: | 2018–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:492&r=hpe |
| By: | Stigendal, Mikael; Novy, Andreas |
| Abstract: | This article explores the implications of founding transdisciplinary collaborations of knowledge production in critical realism. We call such equal partnerships of researchers and practitioners knowledge alliances. Using the distinction between the referents that we refer to (what our research is about) and our references (our research about that), we show that practitioners can contribute to the process of knowledge production by providing access to referents and producing references but also by achieving relevance. Researchers and practitioners bring different types of knowledge. To become excellent, knowledge production should be organized in ways, which engage these different types in a constructive interplay. We call this approach potential-oriented, which we put in contrast to the empiricism of evidence-based research and policy-making. Our deliberate choice of the term potential-oriented reflects the shifts in philosophy suggested by critical realism, but also a sensitivity for how practitioners communicate and express themselves. |
| Keywords: | knowledge alliance; critical realism; transdisciplinarity; social cohesion; urban development |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus009:6433&r=hpe |
| By: | Tobias Regner (FSU Jena); Astrid Matthey (Max Planck Institute of Economics, Jena) |
| Abstract: | Self-signaling models predict less selfish behavior in a probabilistic giving setting as individuals are expected to invest in a pro-social identity. However, there is also substantial evidence that people tend to exploit situational excuses for selfish choices (for instance, uncertainty) and behave more selfishly. We contrast these two motivations experimentally in order to test which one is more prevalent in a reciprocal giving setting. Trustees' back transfer choices are elicited for five different transfer levels of the trustor. Moreover, we ask trustees to provide their back transfer schedule for different scenarios that vary the implementation probability of the back transfer. This design allows us to identify subjects who reciprocate and analyze how these reciprocators respond when self-image relevant factors are varied. Our results indicate that self-deception is prevalent when subjects make the back transfer choice. Twice as many subjects seem to exploit situational excuses than subjects who appear to invest in a pro-social identity. |
| Keywords: | social preferences, pro-social behavior, experiments, reciprocity, moral wiggle room, self-image concerns, self-signaling |
| JEL: | C72 C91 D80 D91 |
| Date: | 2017–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2017-018&r=hpe |
| By: | Juan Carlos de Pablo |
| Abstract: | Se analiza la política económica desde la perspectiva de los procesos decisorios. Las cosas no “ocurren”, sino que alguien las hace ocurrir. A raíz de la necesidad de adoptar decisiones, la realidad puede ubicarse dentro de la frontera de posibilidades de producción, basada en las dotaciones y la tecnología en uso, y por consiguiente convertirse en la restricción operativa del sistema. Para ilustrar este enfoque, se seleccionan cuatro episodios, dos referidos al ámbito internacional, dos al local. En el plano internacional, se analiza la cuestión del tipo de cambio y la deuda pública en Francia e Inglaterra durante la década de 1920 y la política antiinflacionaria aplicada en Estados Unidos a fines de la década de 1970; en el plano local, los contratos petroleros firmados en 1958 y el dilema decisorio que Juan Vital Sourrouille y Domingo Felipe Cavallo enfrentaron 9 meses después de lanzados sus respectivos programas antiinflacionarios. En cada episodio primero se presentan los hechos, y particularmente el desafío que tuvo que enfrentar el responsable de la política económica; qué decisiones adoptó; y cuáles fueron los resultados. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:642&r=hpe |
| By: | Christopher P Barrington-Leigh |
| Abstract: | A large "happiness", or life satisfaction, literature in economics makes use of Likert-like scales in assessing survey respondents' cognitive evaluations of their lives. These measures are being used to estimate economic benefits in every empirical field of economics. Typically, analysis of these data have shown remarkably low direct returns of education for improving subjective well-being. In addition, arguably, the inferred impact of material wealth and income using this method is also unexpectedly low as compared with other, social factors, and as compared with economists' prior expectations which underlie, in some sense, support for using GDP as a proxy for more general quality of life goals. Discrete response scales used ubiquitously for the reporting of life satisfaction pose cognitive challenges to survey respondents, so differing cognitive abilities result in different uses of the scale, and thus potential bias in statistical inference. This problem has so far gone unnoticed. An overlooked feature of the distribution of responses to life satisfaction questions is that they exhibit certain enhancements at focal values, in particular at 0, 5, and 10 on the eleven-point scale. In this paper, I investigate the reasons for, and implications of, these response patterns. I use a model to account for the focal-value behavior using a latent variable approach to capture the "internal" cognitive evaluation before it is translated to the discrete scale of a survey question. This approach, supported by other more heuristic ones, finds a significant upward correction for the effects of both education and income on life satisfaction. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1807.11835&r=hpe |