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on Evolutionary Economics |
| By: | Ana B. Ania; Andreas Wagener |
| Abstract: | We interpret the Open Method of Coordination (OMC), recently adopted by the EU as a mode of governance in the area of social policy and other ¯elds, as an imitative learning dynamics of the type considered in evolutionary game theory. The best-practise feature and the iterative design of the OMC correspond to the behavioral rule \imitate the best." In a redistribution game with utilitarian gov- ernments and mobile welfare bene¯ciaries, we compare the outcomes of imitative behavior (long-run evolutionary equilibrium), decentralized best-response behavior (Nash equilibrium), and coordinated policies. The main result is that the OMC allows policy coordination on a strict subset of the set of Nash equilibria, favoring in particular coordination on intermediate values of the policy instrument. |
| JEL: | H77 H75 C73 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0904&r=evo |
| By: | Martin Jones (University of Dundee) |
| Abstract: | Keynes's theory of probability has been studied intensively in the past few years with much discussion of its relevance to modern economics. This paper examines Keynes's ideas in light of criticisms made by other authors and comes to the conclusion that Keynes's views on rationality are critically flawed. However, it is asserted that this actually allows more freedom for investigation when it is combined with insights from behavioural economics and gives examples where this could be fruitful. One of the side-effects of this is that there is a narrowing of the gap between Keynesian and mainstream behavioural views on decision-making. |
| Keywords: | uncertainty, Keynes, behavioral economics |
| JEL: | B41 |
| URL: | http://d.repec.org/n?u=RePEc:sti:wpaper:031/2009&r=evo |