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on Heterodox Microeconomics |
| By: | Lunn, Pete |
| Abstract: | This paper challenges the increasingly common view that the findings of behavioural economics constitute a fourth type of market failure. The market failure framework elevates the standard competitive market model to the status of an ideal. It provides us with tools to identify departures from the ideal model and to deduce a direction policy might take to restore it. Many behavioural phenomena also imply departures from the ideal model. Yet rather than allowing us to deduce a good direction for policy, the findings question the legitimacy and usefulness of this deductive theoretical framework for policy analysis. Two policy problems are highlighted here: the validity of inferring that consumers' choices after an intervention improve outcomes relative to their previous choices, and the potential for distributional consequences when policy alters consumers' choices. The paper concludes that, given these problems, conceiving of the relevant behavioural phenomena as an additional form of market failure is potentially to misunderstand their implications for consumer and competition policy. |
| Keywords: | Market Failure/Decision-making biases/Behavioural economics/Regulation |
| JEL: | D03 D18 L96 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp455&r=hme |
| By: | Radu Vranceanu (Economics Department - ESSEC Business School) |
| Abstract: | Economic profit is produced by entrepreneurs, those special individuals able to detect and seize as yet unexploited market opportunities. In general capitalist firms manage to deliver positive profits even in the most competitive environments. They can do so thanks to internal entrepreneurs, a subset of their employees able to drive change and develop innovation in the workplace. This paper argues that the goal of profit maximization is fully consistent with the corporation doing good for society. However, there is little justification for corporations to transfer the whole economic profit to shareholders. Economic agents entitled to receive the economic profit are precisely those who create this profit, namely the internal entrepreneurs. |
| Keywords: | Corporate Goal; Entrepreneurship Theory of the Firm; Internal Entrepreneurs; Profit; Social Role of Business; Virtue Ethics |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00823521&r=hme |
| By: | Morrissey, Karyn; O’Donoghue, Cathal |
| Abstract: | Recent research in Ireland has estimated both the national and regional economic value of the marine sector. However, economic activity does not exist in a vacuum. Activities in the marine sector not only directly affect the industries in the sector but also influence other sectors through inter-sectoral linkages. This paper uses an Input-Output (IO) methodology to examine the linkages and production effects of the Irish marine sector on the national economy. Disaggregating the Irish IO table for 2007 to include ten additional marine sectors, this paper represents the first effort to quantify the inter-industry linkage effects, production-inducing effects and employment multipliers in the marine sector. This analysis found that a number of marine sectors, notably the maritime transportation sector, have an important economic role within the wider Irish economy. |
| Keywords: | Ocean Economy, Input Output Analysis, Industry Linkages, Multipliers, Ireland, Environmental Economics and Policy, Production Economics, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:semrui:148835&r=hme |
| By: | Yoshihara, Naoki; Veneziani, Roberto |
| Abstract: | This paper analyses the theoretical issues related to the measurement of labour content in the context of general technologies with heterogeneous labour. A novel axiomatic framework is used in order to formulate the key properties of the notion of labour content and analyse its theoretical foundations. Then, a simple measure of labour content is uniquely characterised, which is consistent with common practice in input-output analysis and with a number of recent approaches in value theory. |
| Keywords: | labour content, labour productivity, technical change, axiomatic analysis |
| JEL: | D57 J24 O33 D46 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:587&r=hme |
| By: | Leung, Vincent K.K.; Lau, Chi Keung Marco; Zhang, Zhe |
| Abstract: | This study empirically delineates the nature of explorative and exploitative alliances, examines how they affect product and process innovations, and investigates how such effects vary in different contexts. Using a sample of 220 Chinese firms in the glass industry, we find that explorative alliances have a stronger effect on both product and process innovations than exploitative alliances. Product and process innovations are positively related to both market and efficiency performance and environmental turbulence enhances the effect of product and process innovations. Our findings provide implications on how to choose between explorative and exploitative alliances relative to the alliance objectives and firm resources and environmental contexts. |
| Keywords: | China, exploration versus exploitation, structural equation modeling, process innovation, product innovation, small-and-medium-sized enterprises |
| JEL: | D21 D7 L65 N60 |
| Date: | 2013–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47065&r=hme |
| By: | Diego A. Comin; Martí Mestieri |
| Abstract: | This chapter discusses different approaches pursued to explore three broad questions related to technology diffusion: what general patterns characterize the diffusion of technologies, and how have they changed over time; what are the key drivers of technology, and what are the macroeconomic consequences of technology. We prioritize in our discussion unified approaches to these three questions that are based on direct measures of technology. |
| JEL: | E0 F0 N0 O0 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19052&r=hme |
| By: | Dirk Helbing |
| Abstract: | Despite all our great advances in science, technology and financial innovations, many societies today are struggling with a financial, economic and public spending crisis, over-regulation, and mass unemployment, as well as lack of sustainability and innovation. Can we still rely on conventional economic thinking or do we need a new approach? I argue that, as the complexity of socio-economic systems increases, networked decision-making and bottom-up self-regulation will be more and more important features. It will be explained why, besides the "homo economicus" with strictly self-regarding preferences, natural selection has also created a "homo socialis" with other-regarding preferences. While the "homo economicus" optimizes the own prospects in separation, the decisions of the "homo socialis" are self-determined, but interconnected, a fact that may be characterized by the term "networked minds". Notably, the "homo socialis" manages to earn higher payoffs than the "homo socialis". I show that the "homo economicus" and the "homo socialis" imply a different kind of dynamics and distinct aggregate outcomes. Therefore, next to the traditional economics for the "homo economicus" ("economics 1.0"), a complementary theory must be developed for the "homo socialis". This economic theory might be called "economics 2.0" or "socionomics". The names are justified, because the Web 2.0 is currently promoting a transition to a new market organization, which benefits from social media platforms and could be characterized as "participatory market society". To thrive, the "homo socialis" requires suitable institutional settings such a particular kinds of reputation systems, which will be sketched in this paper. I also propose a new kind of money, so-called "qualified money", which may overcome some of the problems of our current financial system. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1305.4078&r=hme |
| By: | Paixão, Paulo; Buratini, Ricardo; Guilhoto, Joaquim José Martins |
| Abstract: | This paper relates an ongoing experience of developing and transferring the knowledge required to understand and operate a regionally disaggregated supply and use input-output model. This R&D project is financed by ANEEL, the Brazilian regulatory agency for electricity generation and distribution, and it is conducted in partnership between an electricity utility company, CPFL, and the Department of Economics at the University of São Paulo (FEA/USP) in Brazil. A brief account of the model theoretical structure is provided, from which three major improvements are expected: a) a better impact assessment of structural economic changes on the consumption of electricity; b) analyses tailored to the specific regional boundaries of the CPFL area of operation; and c) the identification of direct and indirect changes on electricity consumption accruing from regional development. In order to establish an in-company team capable of applying the model in response to their day to day managerial demands, a training program was devised in order to make them as familiar as possible with the necessary input-output theoretical background, and also skillful enough so as to efficiently apply the model. The paper relates the challenges that have been found in doing so, which means not only transferring academic knowledge to an audience not familiarized to input-output economics within a time schedule severely constrained by the pressure of daily work, but also to match this knowledge to the company technical interests. |
| Keywords: | input-output; energy |
| JEL: | Q40 R15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47008&r=hme |
| By: | Aline Branche-Seigeot (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : FRE3497 - Université de Bourgogne); Jean-François Giret (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : FRE3497 - Université de Bourgogne) |
| Abstract: | Cet article porte sur le lien entre le déclassement et le surclassement sur le marché du travail et les compétences de base qu'ont pu acquérir les individus au cours de leurs parcours scolaire et professionnel. En observant une certaine hétérogénéité des compétences de base par niveau de diplôme, nous faisons l'hypothèse que ces différences peuvent expliquer les situations de déclassement ou de surclassement. Nos travaux, à partir des données de l'enquête nationale " Information et Vie Quotidienne " (2004), montrent effectivement que les situations de déclassement (surclassement), pour un même niveau de diplôme, peuvent résulter d'un plus faible (fort) niveau de compétences de base, notamment en numératie et dans certains secteurs. Les compétences de base semblent donc être de bons indicateurs de la capacité à être formé dans un emploi et peuvent expliquer la position des individus dans les files d'attente pour accéder aux emplois les plus qualifiés. |
| Keywords: | Déclassement ; Surclassement ; Compétence de base ; Numératie ; Attente envers l'école |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00821843&r=hme |
| By: | Roberto Dell’Anno (University of Salerno); Jorge Martinez-Vazquez (International Center for Public Policy. Andrew Young School of Policy Studies, Georgia State University) |
| Abstract: | In this paper we argue that renter’s illusion may not be a form of asymmetric information neither irrationality but rather a way to include in our economic analysis evidence that while homo oeconomicus aims to do a good job of making choices, he frequently is not able to do that. Taxpayers do not know the “objective” world but take decisions according to mental and often biased representations of “their” world. We develop a simple model where misperception plays a fundamental role in the behavior of renters and allows overcoming the dichotomy between rational and irrational renter's behavior. In the paper we also pursue the two complementary aims of introducing “cognitive limitation” into the theory of local public finance and of filling a gap in this literature regarding the lack of micro-foundations for the renter’s illusion hypothesis. |
| Keywords: | Renter effect; Renter’s illusion; Fiscal illusion; Behavioral local public finance. |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1303&r=hme |
| By: | Heinz Welsch; Jan Kühling |
| Abstract: | Drawing on the distinction between envy and signaling effects in income comparison, this paper uses 307,465 observations for subjective well-being and its covariates from Germany, 1990-2009, to study whether the nature of income comparison has changed in the process of economic development, and how such changes are related to changes in the nature of income formation. By conceptualizing a person’s comparison income as the income predicted by an earnings equation, we find that, while in 1990-1999 envy has been the dominant concern in West Germany and signaling the dominant factor in East Germany, income comparison was non-existing in 2000-2009. We also find that the earnings equation reflects people’s ability more accurately in the second than in the first period. Together, these findings suggest that comparing one’s income with people of the same ability is important only when ability is insufficiently reflected in own income. |
| Keywords: | Income comparison, envy, signaling, subjective well-being, income formation |
| JEL: | D31 I31 J31 P36 Z13 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp552&r=hme |
| By: | Anna Kowalska-Pyzalska; Katarzyna Maciejowska; Katarzyna Sznajd-Weron; Rafal Weron |
| Abstract: | Using an agent-based modeling approach we show how personal attributes, like conformity or indifference, impact the opinions of individual electricity consumers regarding switching to innovative dynamic tariff programs. We also examine the influence of advertising, discomfort of usage and the expectations of financial savings on opinion dynamics. Our main finding is that currently the adoption of dynamic electricity tariffs is virtually impossible due to the high level of indifference in today's societies. However, if in the future the indifference level is reduced, e.g., through educational programs that would make the customers more engaged in the topic, factors like tariff pricing schemes and intensity of advertising will became the focal point. |
| Keywords: | Dynamic pricing; Time-of-use tariff; Demand response; Diffusion of innovations; Agent-based model; Spinson |
| JEL: | C63 O33 Q48 Q55 |
| Date: | 2013–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1305&r=hme |
| By: | Paul Smoke (NYU) |
| Abstract: | Ensuring adequate subnational revenue is a core concern of fiscal decentralization. Public finance principles for selecting and designing subnational revenue sources have been widely used during the prominent wave of decentralization efforts in developing countries over the past three decades. Available empirical literature, however, suggests that subnational revenue generation often fails to meet needs and expectations, even where normative advice has been or seems to have been followed. Are the principles inappropriate, or are they just poorly applied? This paper argues that both factors are often at play. Basic principles are valuable, but they can be challenging to use and do not cover certain critical factors. Even if the principles are relevant and well applied, implementation commonly faces powerful constraints. Yet despite unsatisfying performance, revenue system design remains substantially based on a conceptually narrow normative framework that lacks a sense of pragmatic strategy and is often overwhelmed in practice by contextual factors it fails to or only weakly considers. |
| Date: | 2013–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1313&r=hme |