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on Heterodox Microeconomics |
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Issue of 2024‒05‒27
ten papers chosen by Carlo D’Ippoliti, Università degli Studi di Roma “La Sapienza” |
| By: | Bellanca, Nicolo' |
| Abstract: | These writings examine Claudio Napoleoni's reflection on the problems of Marxist theory of value. While the first one focuses on the notion of economic exploitation, the second dwells on the concept of alienation. Both discuss how these explorations seek to delineate a horizon of human emancipation. The third essay finally argues that Napoleoni's Marxist contributions are not separate from those, more concrete, concerning the Italian economy. During the Sixties, his reassessment of the concepts of productive labor and rent allows him to argue that the social and political hegemony of redistributive coalitions constitutes Italy's major structural weakness and the most important cause of inequalities and lack of inclusion. |
| Keywords: | Marxist theory of value; Claudio Napoleoni; Hanna Arendt; Alienation; Economic exploitation; Productive labour; Political economy; Italian economy |
| JEL: | B24 D72 E11 |
| Date: | 2024–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120759&r=hme |
| By: | Alessandro GUAZZINI |
| Abstract: | Since Veblen’s “The Leisure Class†was published in 1899, a considerable amount of literature on conspicuous consumption has been produced; while much has been said from a demand viewpoint, its supply side and social consequences rest largely undetermined. This paper aims at highlighting the highly conflictual interests between firms and the generality of consumers in a market characterized by conspicuous consumption. It also has in view to take a step forward towards the formalization of conspicuous consumption, to accelerate his admittance in the broadly accepted microeconomic theory. Starting from an analysis of the past literature and the state of the art in demand theory, I will first include positional concerns in an individual utility function. I will then examine the adverse economic and socio-psychological externalities that similar behaviors entail. I will eventually turn to the analysis of the supplier’s responsibility in shaping the phenomenon. Through an advertising augmented Lerner index I will investigate the role of a firm’s advertising expense in both raising markups and increasing conspicuous consumption’ negative effects. After an empirical analysis aimed at supporting my thesis, I will finally suggest a few remedies. |
| Keywords: | Conspicuous consumption, Positional concerns, Utility function, Profit function, Lerner index, Advertising externalities, Advertising tax |
| JEL: | D01 D62 D91 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2024_03.rdf&r=hme |
| By: | James T. Wilkinson; Jacob Kelter; John Chen; Uri Wilensky |
| Abstract: | We present a novel agent-based approach to simulating an over-the-counter (OTC) financial market in which trades are intermediated solely by market makers and agent visibility is constrained to a network topology. Dynamics, such as changes in price, result from agent-level interactions that ubiquitously occur via market maker agents acting as liquidity providers. Two additional agents are considered: trend investors use a deep convolutional neural network paired with a deep Q-learning framework to inform trading decisions by analysing price history; and value investors use a static price-target to determine their trade directions and sizes. We demonstrate that our novel inclusion of a network topology with market makers facilitates explorations into various market structures. First, we present the model and an overview of its mechanics. Second, we validate our findings via comparison to the real-world: we demonstrate a fat-tailed distribution of price changes, auto-correlated volatility, a skew negatively correlated to market maker positioning, predictable price-history patterns and more. Finally, we demonstrate that our network-based model can lend insights into the effect of market-structure on price-action. For example, we show that markets with sparsely connected intermediaries can have a critical point of fragmentation, beyond which the market forms distinct clusters and arbitrage becomes rapidly possible between the prices of different market makers. A discussion is provided on future work that would be beneficial. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.02480&r=hme |
| By: | Avichai Snir; Dudi Levy; Dian Wang; Haipeng Allan Chen; Daniel Levy |
| Abstract: | Many experimental studies report that economics students tend to act more selfishly than students of other disciplines, a finding that received widespread public and professional attention. Two main explanations that the existing literature offers for the differences found in the behavior between economists and noneconomists are the selection effect, and the indoctrination effect. We offer an alternative, novel explanation. We argue that these differences can be explained by differences in the interpretation of the context. We test this hypothesis by conducting two social dilemma experiments in the US and Israel with participants from both economics and non-economics majors. In the experiments, participants face a tradeoff between profit maximization, that is the market norm and workers welfare, that is the social norm. We use priming to manipulate the cues that the participants receive before they make their decision. We find that when participants receive cues signaling that the decision has an economic context, both economics and non-economics students tend to maximize profits. When the participants receive cues emphasizing social norms, on the other hand, both economics and non-economics students are less likely to maximize profits. We conclude that some of the differences found between the decisions of economics and non-economics students can be explained by contextual cues. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.03893&r=hme |
| By: | Alberti, Manfredi; Asso, Pier Francesco |
| Abstract: | Recent studies have revalued Hazel Kyrk for her original works on consumption and the critique of neoclassical demand theory. Kyrk’s A Theory of Consumption (1923), opened up new perspectives for understanding the nature of consumption and revalued home economics as a central part of the economist agenda, taking distance from the first generation of home economists. This paper focuses on Kyrk’s post-1923 scientific production and professional activities. Our main purpose is to show her contributions to the quantitative foundations of consumption together with her attempt to feed contemporary research on consumers’ behaviour with pragmatism, policy advice and field knowledge. We selected specific issues: the education of consumers through information and a strategy of “critical consumption”; the analysis of strategic industries; the well-being of American families; the importance of “invisible” objects (non-market activities) and their statistical processing. |
| Date: | 2024–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:2uqya&r=hme |
| By: | Alger, Ingela; Rivero-Wildemauwe, José Ignacio |
| Abstract: | We conduct a laboratory experiment using framing to assess the willing-ness to “sell a lemon”, i.e., to undertake an action that benefits self but hurts the other (the “buyer”). We seek to disentangle the role of other-regarding preferences and (Kan-tian) moral concerns, and to test if it matters whether the decision is described in neutral terms or as a market situation. When evaluating an action, morally motivated individuals consider what their own payo would be if—hypothetically—the roles were reversed and the other subject chose the same action (universalization). We vary the salience of role uncertainty, thus varying the ease for participants to envisage the role-reversal scenario. We find that subjects are (1) more likely to “sell a lemon” in the market frame, and (2) less likely to do so when the role uncertainty is salient. We also structurally estimate other-regarding and Kantian moral concern parameters. |
| Keywords: | market framing; lemons; social preferences; Kantian morality; experiment |
| JEL: | C91 D01 D91 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:129328&r=hme |
| By: | Bonifati, Giovanni |
| Abstract: | The law proposal on the reduction of the working week submitted to the Italian Parliament provides an opportunity for a critical and constructive reflection on the role that a reduction of standard working time can play in pursuing the goal of increasing and maintaining a high employment rate. To this end, the essay proposes to discuss what are the systemic conditions for demand and production growth to manifest their full employment-generating potential, while at the same time creating more employment and more leisure time, potentially for all those who participate in the ongoing process of change (and not only for the few who are in a position to work less). Two conditions are identified: (a) allowing working hours to decrease (tendentially) in line with increasing hourly labour productivity; (b) allowing real hourly wages to increase, also in line with hourly labour productivity. By holding employment growth and wage growth together, a working time reform would thus help to proactively address one of the fundamental problems of our socio-economic system that has remained unanswered for decades. The essay also emphasises that in order to increase the social sustainability of growth, particularly in this difficult phase of technological and demographic transition, a new system of rules to improve working conditions is indispensable. |
| Keywords: | Employment; Working hours; Hourly labour productivity; Growth; Income distribution |
| JEL: | B50 E11 E24 E25 |
| Date: | 2024–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120842&r=hme |
| By: | Andres Gomez-Lievano; Michail Fragkias |
| Abstract: | There are many benefits and costs that come from people and firms clustering together in space. Agglomeration economies, in particular, are the manifestation of centripetal forces that make larger cities disproportionately more wealthy than smaller cities, pulling together individuals and firms in close physical proximity. Measuring agglomeration economies, however, is not easy, and the identification of its causes is still debated. Such association of productivity with size can arise from interactions that are facilitated by cities ("positive externalities"), but also from more productive individuals moving in and sorting into large cities ("self-sorting"). Under certain circumstances, even pure randomness can generate increasing returns to scale. In this chapter, we discuss some of the empirical observations, models, measurement challenges, and open question associated with the phenomenon of agglomeration economies. Furthermore, we discuss the implications of urban complexity theory, and in particular urban scaling, for the literature in agglomeration economies. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.13178&r=hme |
| By: | Saccal, Alessandro |
| Abstract: | Relative to the germane academic literature in this work I offer alternative and more direct proofs for (i) the existence and unicity of Sraffa’s ‘Standard System’, (ii) the (existence and) unicity of R=r_i (for w=0) across the ‘Real System’ and the ‘Standard System’ and (iii) the existence (and unicity) of Sraffa’s Fundamental Equation r=R(1−w) across both kinds of system. While the proof for (iii) be outrightly unprecedented and that for (ii) certainly shorter, the proof for (i) is not necessarily superior to those of the germane academic literature, which judgement is left open for debate. |
| Keywords: | Abel Ruffini Theorem; mathematical induction; multiple and single production; Perron Frobenius Theorem; Real and Standard System; Schur decomposition; Sraffa’s Fundamental Equation. |
| JEL: | B24 |
| Date: | 2024–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120418&r=hme |
| By: | Bonifati, Giovanni |
| Abstract: | The aim of this essay is to show how sustained growth in the employment rate, which should be taken as a strategic variable of economic policy, depends - for given growth rates of output and working age population - on two conditions: (a) allowing working hours to decline at the same rate at which hourly labour productivity grows; (b) allowing real hourly wages to increase at the rate at which hourly labour productivity increases. The essay highlights that the two conditions stated and analytically examined are to be considered as necessary conditions for an expansion of demand and output to express the highest potential for employment growth at unchanging distributive shares. Once both are satisfied, the benefits of the increase in hourly labour productivity are transferred to wages in the form of a higher employment growth rate. The analytical framework developed in the essay is used for an initial assessment of the empirical evidence. |
| Keywords: | Employment; Working hours; Hourly labour productivity; Growth; Income distribution |
| JEL: | B50 E11 E24 E25 |
| Date: | 2024–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120796&r=hme |