nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2023‒08‒21
nineteen papers chosen by
Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza”

  1. THE MORAL FOUNDATIONS OF CAPITALISM. An Investigation of Adam Smith Pessimism By Roberto Censolo
  2. Schools of Athens: Surplus Approach, Marxism and Institutions By Cesaratto, Sergio
  3. Prevention first vs. cap-and-trade policies in an agent-based integrated assessment model with GHG emissions permits By Lilit Popoyan; Alessandro Sapio
  4. The falling rate of profit as a research program By Michl, Thomas R.
  5. Degrowth enthusiasm and the transformation blues of the East: Reflections on integrating post-socialist transformation experiences into the degrowth discourse By Gebauer, Jana; von Jorck, Gerrit; Pungas, Lilian
  6. The Capability Approach and A Critique of the Design of Digital Spaces By Victoria Sgarro; Madhav Tipu Ramachandran
  7. Gendered Competitive Practices in Economics. A Multi-Layer Model of Womens Underrepresentation By Stephan Puehringer; Theresa Hager
  8. Endogenous Economic Resilience, Loss of Resilience, Persistent Cycles, Multiple Attractors, and Disruptive Contractions By Willi Semmler; Fabio Della Rossa; Giuseppe Orlando; Gabriel R. Padro Rosario; Levent Kockesen
  9. Systemically important banks - emerging risk and policy responses: An agent-based investigation By Lilit Popoyan; Mauro Napoletano; Andrea Roventini
  10. Application of spin glass ideas in social sciences, economics and finance By Jean Philippe Bouchaud; Matteo Marsili; Jean-Pierre Nadal
  11. Smile without a reason why: functional specialisation and income distribution along global value chains By Federico Riccio; Giovanni Dosi; Maria Enrica Virgillito
  12. Under economic stress rational behavior may yield increased consumption of pricier goods By Quante, Lennart; Otto, Christian; Willner, Sven Norman; Middelanis, Robin; Levermann, Anders
  13. Modeling Market Distortions and Moral Hazard By Nguhi, Alex
  14. Platon, Aristoteles und Locke über Wirtschaftswachstum und Naturrecht By José Luis Cendejas Bueno
  15. On the Takeover Mechanism in Market Socialism By Carnevali, Emilio; Sommacal, Matteo
  16. The Finance-Dominated Accumulation Regime & the Future of Work in the Post-COVID World By Gouzoulis, Giorgos; Stockhammer, Engelbert
  17. From extractivism to community resilience: the promise and perils of Sardinia's energy transition. By Fronteddu, Antonio
  18. Value capture and embeddedness in social-purpose-driven ecosystems. By Asta Pundziene; Neringa Gerulaitiene; Sea Matilda Bez; Irène Georgescu; Christopher Mathieu; Jordi Carrabina-Bordoll; Josep Rialp-Criado; Hannu Nieminen; Alpo Varri; Susanne Boethius; Mark van Gils; Víctor Giménez-Garcia; Isabel Narbón-Perpiñá; Diego Prior-Jiménez; Laura Vilutiene
  19. Orthodoxie und Heterodoxie in den Wirtschaftswissenschaften: Abgrenzung, Merkmale und Existenzberechtigung By Troll, Alexander

  1. By: Roberto Censolo
    Abstract: Smith’s ideal vision of capitalism envisages a virtuous loop between social prudence and macroeconomic performance that outlines a “progressive state†of society. The trickle down of wealth strengthens the confidence in the future and a steady adherence to prudent behaviour. At the same time, this reinforcing character of prudence encourages liberal virtues needed for growth. However, a path of perpetual growth is not conceivable in Smith analysis, considering both a moral and an economic perspective. Indeed, Smith’s pessimism about the future of commercial society relates to the intrinsic inability of capitalism to sustain social prudence in the long run due to an internal contradiction in its development process. In the progress of division of labour, the industry of labourers is progressively substituted with the industry of machines. Therefore, the development process, which is initially sustained by “the industry of mankind†, endogenously expels those liberal virtues that grounds a progressive state of society, with crucial social and political implication.
    Date: 2022–12–02
  2. By: Cesaratto, Sergio (University of Siena)
    Abstract: Relying on the lessons of Marx, Polanyi, Sraffa and Garegnani, the paper moves from the material anchor that the classical surplus approach provides to economic and institutional analysis in anthropology, archaeological and economic history. In surplus theory institutions regulate the material basis of society and in particular the extraction and distribution of the social surplus. Marx’s historical materialism is a natural source of inspiration for this view expunged, of course, of teleological and mechanical readings. The Marxian concept of modes of production has been however object of often over-complicated disputes among Marxists. These are not easily solved since historical results in anthropology, archaeological and economic history do not always deliver uncontroversial pictures of the working of ancient economies and of their transitional dynamics. Since Popper, historical materialism has also been object of methodological criticism. While the suggestions to complement macro analysis with consistent granular accounts of individual choices must be welcomed, methodological individualism is a dead end for social science. Individual and class choices must rather be dealt with through historical analysis. The surplus approach may provide support to both macro and micro analysis of behaviours and institutions. Interdisciplinarity is advocated in the paper.
    Keywords: Surplus approach; Historical materialism; Anthropology; Archaeology; Agency
    JEL: A12 B51 B52 Z13
    Date: 2023–08–01
  3. By: Lilit Popoyan; Alessandro Sapio
    Abstract: In this work, we ask whether tradable emissions permits, based on the cap-and-trade principle, provide better climate change and economic projections than alternative regulations for GHG emissions, such as operational permits which are commonly used to mitigate non-GHG emissions (prevention first principle). Towards this goal, we simulate climate and the economy through a new version of the Dystopian Schumpeter meeting Keynes (DSK) model, extended to include an emission trading system (ETS) and operational permit systems. We show that climatic and economic projections in an ETS scenario need not be superior to those in an operational permit scenario. Which system delivers more encouraging projections on temperature anomalies, the green transition, and economic dynamics depends on institutional details, such as the set of firms for which permits are mandatory; the regulatory requirement of corrective measures; the magnitude of penalties; the stringency of the ETS. An ETS with a declining number of permits emerges as the best-performing system in terms of macroeconomic, microeconomic, and climate outcomes. A system of operational permits mandatory only for large firms (centralised permits) ranks as the second-best system, provided that the regulator imposes corrective measures regarding R&D expenses and machinery replacement.
    Keywords: Climate change; Environmental permits; Emissions trading system; Polluter pays principle; Agent-based models; Macro-economic dynamics.
    Date: 2023–07–25
  4. By: Michl, Thomas R. (Department of Economics, Colgate University)
    Abstract: This paper argues that the Marxian law of the tendency of the rate of profit to fall defines an important analytical framework for studying the role of capital-using, labor-saving (Marx-biased) technical change in the accumulation process. Using a tractable one-sector model of growth and distribution, the paper examines two viability conditions used in the study of Marx-biased technical change. In the Standard Interpretation, capitalists choose techniques if they increase their transitional rate of profit. As Duncan Foley and others have observed, if wages are rising, Marx’s prediction of a declining rate of profit can go through conditionally. Anwar Shaikh has argued that under †real competition†capitalists will be forced by competitive forces to choose techniques that increase their profit margins, even if they lower the rate of profit. While empirical research on the viability condition under the Standard Interpretation has generally found it to be comfortably satisfied (which would be consistent with real competition as well), there is enough ambiguity in the evidence to warrant further study. Theoretical research has only begun to explore the possibility that a game-theoretic approach might bridge the gap between these accounts. Other issues raised include the origin of Marx-biased technical change and the role of wage growth in mediating technical choices.
    JEL: B51 O3 O4
    Date: 2023–08–02
  5. By: Gebauer, Jana; von Jorck, Gerrit; Pungas, Lilian
    Abstract: This paper traces the links between post-socialist transformations and the degrowth movement. Based on a series of workshops entitled "Degrowth Enthusiasm and the Eastern Blues" that we organised in recent years, this paper focuses on the following questions: what can we learn from the state-socialist societies' transformation processes into capitalist societies? What experiences and practices before and after these transformations can potential degrowth societies build on? To what extent can people's experiences with an alternative system and its transformation contribute to unfolding their potential in a social-ecological transformation and to overcoming 'change fatigue'? We present key findings from our workshops, which we combined with our own empirical evidence from Estonia and a theoretical examination of (post-)socialist economics to form six theses that we consider essential for a decolonial degrowth debate.
    Keywords: degrowth, social-ecological transformation, post-socialist transformation, subsistence farming
    JEL: O44 P28 P30 P31 Q01 Q12
    Date: 2023
  6. By: Victoria Sgarro (Department of Economics, New School for Social Research, USA); Madhav Tipu Ramachandran (Department of Economics, New School for Social Research, USA)
    Abstract: This paper aims to advance two claims about the"public spaces" of the internet (that is, forums of public interaction online, like social media, news media, message boards and forums, and so on). First, we argue that a broadly utilitarian framework guides the technology industry’s approach to the design of digital spaces, and therefore limits the design and evaluation of these spaces to revealed preference satisfaction. As such, this framework lacks the conceptual resources to diagnose or to understand the shortcomings of today’s digital public spaces, or to coherently respond to these shortcomings. We consider a rights-based framework as an alternative philosophical framework for the design of digital spaces, but find it unsatisfactory. Second, we argue that the capability approach, as an objectivist and pluralist value theory, offers a more constructive understanding of individual flourishing in digital spaces. While this paper primarily seeks to argue why we should apply the capability approach to digital spaces, we conclude by suggesting how to apply the capability approach to digital spaces –– a promising area for further research.
    Date: 2023–07
  7. By: Stephan Puehringer (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria); Theresa Hager (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)
    Abstract: Economics holds a unique position in terms of the severity and persistence of gender imbalances and the underrepresentation of female researchers within the social sciences. There exist various reasons for this fact, as well as a variety of channels through which these imbalances are perpetuated. To this end, there has not been a comprehensive review of the existing and well-researched levels of this underrepre-sentation. By systematically reviewing the literature on the facts and reasons for the low proportion of women in the profession and structuring them in our multi-level model, we not only make the multitude of channels visible but can also analyze their interplay. Moreover, we argue that efforts to address women's underrepresentation are impeded because economics as a discipline is particularly susceptible to competitive evaluation and selection practices. Men and women perceive, perform in, and make sense of competitive processes in their own ways, so that men, through their socialization as competitive selves, are more likely to succeed in an academic system heavily based on competition and rankings; women, in this case, are endowed with an inappropriate set of competitive strategies and interpretations that, nevertheless, ultimately inform their academic practices. Enriching our multi-level model with this perspective on gendered competitive practices in academia, allows us to offer a novel contribution to the debate on the causes of the persistent gender imbalance in the field. Drawing from feminist stand-point theory, we argue that such an endeavor is not only important, and interesting in its own right, but also highly relevant to the reproduction of gender imbalances and gender discrimination in society at large; if a diversity of views and opinions is not represented within its halls, economics runs the risk to inform policy lopsided. More precisely, we argue that our result has some nontrivial implications given the rise of competitive formats in academia and thus is particularly alarming for science policies aiming at gender balances in academia.
    Date: 2023–08
  8. By: Willi Semmler (Department of Economics, New School for Social Research, USA and Bielefeld University, Germany); Fabio Della Rossa (Department of Electronics, Information, and Bioengineering, Polytechnic of Milan, Milan, Italy); Giuseppe Orlando (Department of Mathematics, University of Bari, Italy and HSE University, Saint Petersburg, Russia); Gabriel R. Padro Rosario (Department of Economics, New School for Social Research, USA); Levent Kockesen (Department of Economics, Koc University, Istanbul, Turkey and Nazarbayev University, Astana, Kazakhstan)
    Abstract: We evaluate Brunnermeir’s Theory of Resilience in the context of complex system dynamics where however, there can be local and global resilience, vulnerability, loss of resilience, cycles, disruptive contractions, and persistent traps. In the paper, we refer to three-time scales. First, for shorter time scales, for the short-run market dynamics, we evaluate resilience in the context of complex market dynamics that have been studied in the history of economic theory for long. Second, with respect to a business cycle medium-term dynamics, we analytically study an endogenous cycle model, built upon Semmler and Sieveking (1993) and Semmler and Kockesen (2017), and discuss the issue of loss of stability, corridor stability, multiple attractors, and trapping dynamics also in the light of complex dynamics. In a financial-real business cycle model, we demonstrate forces that indeed can exhibit multiple dynamic features such as local resilience, known as corridor-stability, but also other dynamic phenomena. Corridor stability pertains to small shocks with no lasting effects, but large enough shocks can lead to persistent cycles and/or contractions. We refer to the Hopf-and-Bautin-Bifurcation theorems, to establish corridor stability, and local resilience, for the interaction of real and financial variables where the trajectories can be stable or unstable in the vicinity of the equilibrium. Thus they can switch dynamic behaviour for small or large shocks. Similar complex dynamic phenomena can be obtained from Kaleckian-Kaldorian nonlinear real business cycle models, particularly when time delays are allowed. Third, whereas the analytical study of the dynamics is undertaken for the above second-time scale, for the longer time scale we study, in the context of multiple equilibria models, the issue of thresholds, tipping points and disruptive contractions, and persistence of traps.
    Keywords: Resilience, complex dynamic models, regime change model, limit cycles, disruptive contractions
    JEL: C32 E32 E44
    Date: 2023–07
  9. By: Lilit Popoyan; Mauro Napoletano; Andrea Roventini
    Abstract: We develop a macroeconomic agent-based model to study the role of systemically important banks (SIBs) in financial stability and the effectiveness of capital surcharges on SIBs as a risk management tool. The model is populated by heterogeneous firms, consumers, and banks interacting locally in different markets. In particular, banks provide credit to firms according to Basel III macro-prudential frameworks and manage their liquidity in the interbank market. The Central Bank performs monetary policy according to different types of Taylor rules. Our model endogenously generates banks with different balance sheet sizes, making some systemically important. The additional capital surcharges for SIBs prove to have a marginal effect on preventing the crisis since it points mainly to the ''too-big-to-fail'' problem with minimal importance for ''too-interconnected-to-fail'', ''too-many-to-fail'' and other issues. Moreover, we found that additional capital surcharges on SIBs do not account for the type and management strategy of the bank, leading to the ''one-size-fits-all'' problem. Finally, we found that additional loss-absorbing capacity needs to be increased to ensure total coverage of losses for failed SIBs.
    Keywords: Financial instability; monetary policy; macro-prudential policy; systemically important banks, additional loss-absorbing capacity, Basel III regulation; agent-based models.
    Date: 2023–07–28
  10. By: Jean Philippe Bouchaud (Académie des Sciences [Paris] - Institut de France, CFM - Capital Fund Management - Capital Fund Management, X - École polytechnique); Matteo Marsili (ICTP - Abdus Salam International Centre for Theoretical Physics [Trieste]); Jean-Pierre Nadal (CAMS - Centre d'Analyse et de Mathématique sociales - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, LPENS - Laboratoire de physique de l'ENS - ENS Paris - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Département de Physique de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)
    Abstract: Classical economics has developed an arsenal of methods, based on the idea of representative agents, to come up with precise numbers for next year's GDP, inflation and exchange rates, among (many) other things. Few, however, will disagree with the fact that the economy is a complex system, with a large number of strongly heterogeneous, interacting units of different types (firms, banks, households, public institutions) and different sizes. Now, the main issue in economics is precisely the emergent organization, cooperation and coordination of such a motley crowd of micro-units. Treating them as a unique "representative" firm or household clearly risks throwing the baby with the bathwater. As we have learnt from statistical physics, understanding and characterizing such emergent properties can be difficult. Because of feedback loops of different signs, heterogeneities and non-linearities, the macro-properties are often hard to anticipate. In particular, these situations generically lead to a very large number of possible equilibria, or even the lack thereof. Spin-glasses and other disordered systems give a concrete example of such difficulties. In order to tackle these complex situations, new theoretical and numerical tools have been invented in the last 50 years, including of course the replica method and replica symmetry breaking, and the cavity method, both static and dynamic. In this chapter we review the application of such ideas and methods in economics and social sciences. Of particular interest are the proliferation (and fragility) of equilibria, the analogue of satisfiability phase transitions in games and random economies, and condensation (or concentration) effects in opinion, wealth, etc.
    Date: 2023
  11. By: Federico Riccio; Giovanni Dosi; Maria Enrica Virgillito
    Abstract: This paper addresses two questions namely, first, the extent to which the very participation in Global Value Chains (GVCs) has penalised labour as a globally insourced production input, and, second, what happened to between-occupation functional inequality. We combine input-output (I-O) tables and labour income along the production stages of global value chains. We focus on foreign labour requirements in manufacturing industries and distinguish across four production stages, namely fabrication, marketing, R&D and managerial functions to map the relative specialisation patterns of different production sub-systems. Our results show that GVCs are hierarchically structured, with advanced countries specialising in upstream functions along global production networks. Fabrication workers are the biggest losers in this process, accounting for most of the drop in labour share in developed and developing countries. Considering that production workers make up more than 50% of the workforce in both advanced and developing countries, the labour share loss of blue-collar workers is a major driver of the increasing global wage inequality.
    Keywords: Labour Share; Global Value Chains; Functional Specialisation; Comparative Advantages; Income Inequalities; International division of Labour.
    Date: 2023–08–05
  12. By: Quante, Lennart; Otto, Christian; Willner, Sven Norman (Potsdam Institute for Climate Impact Research (PIK)); Middelanis, Robin; Levermann, Anders
    Abstract: The behavior of consumers is one of the elementary market forces. Thus, changes in consumed quantity in response to changing prices are an important determinant of economic behavior. Here, we show analytically under minimal assumptions that in an out-of-equilibrium market it can be rational to buy more of a good in spite of increasing prices. When rational consumers maximize their utility, consumption is driven by two factors, the relative price change of goods and their substitutability. Influenced by heterogeneous prices between suppliers and goods, the budget-driven preference for goods with the least price increase is competing with the utility-driven substitution of goods. This leads to a stabilizing feedback loop emerging from any utility function that is strictly monotonically increasing. We illustrate this feedback dynamics in an agent-based model with utility-optimizing consumers under regionally heterogeneous weather-induced supply failures. The resulting relation between changes in prices and quantities are predominantly in line with macro economic observations, but a positive correlation between price and quantity emerges in out-of-equilibrium situations. Thus, in a stressed economy rational consumers might buy more of pricier goods in spite of budget constraints.
    Date: 2023–07–10
  13. By: Nguhi, Alex
    Abstract: This paper explores the methods of modeling market distortions and elements of moral hazard. It also puts forward a Collision Balls Theory For Economics whereby the economy can be modeled as space where balls of different speeds, sizes and trajectories interact with one another to give out an aggregate speed/growth rate of an economy.
    Date: 2023–07–04
  14. By: José Luis Cendejas Bueno (UFV - Université Francisco de Vitoria = Universidad Francisco de Vitoria)
    Abstract: The possibility of a growing accumulation of wealth, what we now refer to as economic growth, was something already considered by Plato, Aristotle and Locke, under the concept of chrematistics. In this paper we show how the economic thinking of these authors cannot be fully understood without considering the intimate relationship they establish between politics and property accumulation. In addition to continuities and ruptures in the arguments, there can be seen a growing understanding of the phenomenon of economic growth in such a way that, when we arrive at Locke, an evident paradigm shift can be appreciated. This change is rooted in the contributions of scholastic thinking for which the acquisition of property through human labour or industry enjoys legitimacy according to natural law.
    Keywords: Platonic communism, Aristotelian chrematistics, Lockean theory of property
    Date: 2023–07–03
  15. By: Carnevali, Emilio; Sommacal, Matteo
    Abstract: In the three decades since the collapse of the Soviet Union, the notion of socialism has been swept into almost total disrepute. The more recent economic literature, however, has shown a resurgence of interest in the concept of socialism, albeit on very different theoretical grounds than in the past. This article investigates the reasons for the socialist movement's historical distrust of the development of "well-defined" economic projects. This attitude seems to have disappeared in contemporary "socialist projects". The article also discusses the Shareholder Socialism proposal developed by economist Giacomo Corneo and proposes a different mathematical formulation of the mechanism through which the takeover of private industries by the public sector should be conducted.
    Keywords: Market Socialism; Nationalization; Economic Systems
    JEL: B14 B24 H1
    Date: 2023–07
  16. By: Gouzoulis, Giorgos; Stockhammer, Engelbert
    Abstract: This paper examines the relationship between financialisation and the future of work in the post-COVID era. It combines an analysis of changes in labour relations due to financialization with an analysis of the macroeconomic impact of financialisation. It will discuss these for the periods before and after the financial crisis and analyse the impact of COVID on labour relations and the growth model in this context. The first section discusses the relationship between the employer-employee distribution of income and economic growth under neoliberalism, highlighting that anaemic growth was largely the outcome of declining wages. A significant amount of declining wages has been associated with the rise of shareholder value orientation which induced the management of non-financial corporations to reduce labour costs. Yet, financialisation is a complex development that has been affecting other domains of the economies beyond the non-financial corporate sector. A notable case is the financialisation of households, and more specifically the financialisation of the housing market. Rapidly rising mortgage debt ratios, driven by rising house prices, generated a debt-fueled real estate bubble in most advanced economies. The effects of rising household indebtedness not only positively affect housing prices, but also exhibits significant effects on class dynamics and has led to several changes at the workplace level. On the one hand, high-income employees who have invested in the real estate market enjoy economic returns and their share of financial incomes and capital gains over their wage income increases steadily. Thus, their class identity transforms from working class to a form of mini-rentier. On the other hand, low-income employees who become indebted become more self-disciplined at the workplace on the fear of defaulting on their debt, which makes them more vulnerable to complying with wage cuts and working under flexible contracts. Since COVID has induced a steep rise in household and corporate indebtedness, the purpose of this paper is to explore how the acceleration of financialisation will impact the future of work in the post-COVID era and discusses potential implications.
    Keywords: financialisation, industrial relations, growth models, COVID
    Date: 2023
  17. By: Fronteddu, Antonio
    Abstract: The pursuit of global carbon neutrality makes the energy transition process no longer procrastinable. The switch towards renewable-based energy systems is paving the way for new forms of energy governance that prioritise the role of commons by demarketising access to energy. However, governments’ strategies worldwide seem to prioritise innovation in the raw materials (sun, wind, etc.) rather than in governance – favouring the continued extraction of energy from resource-rich regions. This work will analyse the case of Sardinia as an example where these two phenomena intersect contradictorily, by comparing the bottom-up nature of energy communities (ECs) vis-á-vis the top-down nature of public-private initiatives, alongside their policymaking trajectories. The key insights that will stem from this thesis elucidate a continuum with prior top-down policies of economic extractivism operated by the Italian government in Sardinia. Such top-down policies are conceptualised thanks to core and energy periphery theories and can explain the current mainstream regime of energy transition. Alternative strategies to pursue policy are conceptualised thanks to the energy democracy theory. Such theory envisions an active citizen engagement alongside the sustainable consumption of renewable energy and resources within the realm of energy communities. Therefore, the thesis will conclude that although large-scale top-down policies are being operated in the island, with special reference to the energy transition, energy communities can forge bottom-up alternative examples of policymaking, enabling an energy transition that can cross-tackle long-standing problems of Sardinian society, such as a stagnant economy, depopulation, self-determination, issues of land, landscapes, and pollution.
    Date: 2023–05–07
  18. By: Asta Pundziene; Neringa Gerulaitiene; Sea Matilda Bez (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School, Labex Entreprendre - UM - Université de Montpellier, UM - Université de Montpellier); Irène Georgescu; Christopher Mathieu; Jordi Carrabina-Bordoll; Josep Rialp-Criado; Hannu Nieminen; Alpo Varri; Susanne Boethius; Mark van Gils; Víctor Giménez-Garcia; Isabel Narbón-Perpiñá; Diego Prior-Jiménez; Laura Vilutiene
    Abstract: We aim to answer the question of the effect of a social-purpose-driven ecosystem on value capture from digital health platforms. We call the social-purpose-driven ecosystem a phenomenon which seeks social impact before profits and aims to empower citizens for individual and collective well-being. Thus, capturing value from digital platforms embedded in a social-purpose-driven ecosystem fundamentally differs from profiting from purely commercial digital platforms and poses significant challenges to platform owners and public policy. Previous research has focused mainly on profiting from technological innovations but has yet to consider the contextual role of the social-purpose-driven ecosystem. We applied the Profiting from Innovation (PFI) framework to fill this gap. Furthermore, based on the results of the multiple-case study of five European digital healthcare platforms, we extend the PFI framework. As a result, we define four unique contingencies which enable value capture from digital healthcare platforms embedded in a social-purpose-driven ecosystem: 1) multilayer value creation, (2) multipurpose complementary assets, (3) emerging dominant design, and (4) distributed socioeconomic returns mechanisms. The study offers two managerial and policy contributions. First, it calls on platform owners and policymakers to acknowledge the contextual effect of a social-purpose-driven ecosystem. Second, multilayer value creation, multiple complementary assets, dominant design and distributed socioeconomic returns mechanisms can positively affect capturing value from digital healthcare platforms.
    Keywords: Embeddedness, Digital healthcare platform, Social-purpose-driven, ecosystem, Value capture, Multiple-case study, Profiting from innovations
    Date: 2023–06
  19. By: Troll, Alexander
    Date: 2023

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