nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2005‒11‒12
eleven papers chosen by
Andy Denis
City University

  1. Discussion of 'BEHAVIORAL ECONOMICS' By Ariel Rubinstein
  2. A Rational Irrational Man By Alexander Harin
  3. The Socioeconomics of Consumption: Solutions to the Problems of Interest, Knowledge, and Identity By Metin Cosgel
  4. "Liquidity Preference Theory Revisited: To Ditch or to Build on It?" By Joerg Bibow
  5. Non-classsical measurement theory: A framework for behavioral sciences. By Victor I. Danilov; Ariane Lambert-Mogiliansky
  6. The Theory of Monetary Aggregation (book front matter) By William Barnett; Apostolos Serletis; W. Erwin Diewert
  7. Remarques à propos du déterminisme technique. By Bruno Tinel
  8. Bridging Structure and Agency: Processes of Institutional Change By Dolfsma, W.; Verburg, R.
  9. Capabilities, the self, and well-being: a research in psycho-economics By Maurizio Pugno
  10. ECONOMIC SYSTEMS By Oldrich Kyn
  11. Social Capital in Central and Eastern Europe. A Critical Assessment and Literature Review By Dimitrina Mihaylova

  1. By: Ariel Rubinstein
    Date: 2005–11–04
  2. By: Alexander Harin (Modern University for the Humanities)
    Abstract: A man is a key subject of economics and economic theory. “A man is irrational” - this opinion can be made from Allais paradox, risk aversion and other well-known fundamental problems. For a long time, this opinion was a barrier to proper solution of these problems and the development of the economic theory. A radically new approach has been proposed. It considers arrangement infringement possibility as a quite different source of such problems. It opens a quite different way to solve them and remove this barrier. It helps economists to open new and rediscover old fields and trends for the research.
    Keywords: “non-ideal” economics, risk, market, bank, industry, development
    JEL: C C7 D81 G11 G22 H O
    Date: 2005–11–09
  3. By: Metin Cosgel (University of Connecticut)
    Abstract: This paper is a review of the socio-economic literature on consumption. Considering consumption as a social activity, it examines how consumption solves the problems of interest, knowledge, and identity. It also discusses the main themes and important contributions in each category and offers suggestions for further research.
    Keywords: consumption, socio-economics, interest, knowledge, identity
    JEL: A12 A13 A14 D1 D8
    Date: 2005–10
  4. By: Joerg Bibow
    Abstract: This paper revisits KeynesÕs liquidity preference theory as it evolved from the Treatise on Money to The General Theory and after, with a view of assessing the theoryÕs ongoing relevance and applicability to issues of both monetary theory and policy. Contrary to the neoclassical Òspecial caseÓ interpretation, Keynes considered his liquidity preference theory of interest as a replacement for flawed saving or loanable funds theories of interest emphasizing the real forces of productivity and thrift. His point was that it is money, not saving, which is the necessary prerequisite for economic activity in monetary production economies. Accordingly, turning neoclassical wisdom on its head, it is the terms of finance as determined within the financial system that Òrule the roostÓ to which the real economy must adapt itself. The key practical matter is how deliberate monetary control can be applied to attain acceptable real performance. In this regard, it is argued that KeynesÕs analysis offers insights into practical issues, such as policy credibility and expectations management, that reach well beyond both heterodox endogenous money approaches and modern Wicksellian orthodoxy, which remains trapped in the illusion of money neutrality.
    Date: 2005–08
  5. By: Victor I. Danilov; Ariane Lambert-Mogiliansky
    Abstract: Instances of non-commutativity are pervasive in human behavior. In this paper, we suggest that psychological properties such as attitudes, values, preferences and beliefs may be suitably described in terms of the mathematical formalism of quantum mechanics. We expose the foundations of non-classical measurement theory building on a simple notion of orthospace and ortholattice (logic). Two axioms are formulated and the characteristic state-property duality is derived. A last axiom concerned with the impact of measurements on the state takes us with a leap toward the Hilbert space model of Quantum Mechanics. An application to behavioral sciences is proposed. First, we suggest an interpretation of the axioms and basic properties for human behavior. Then we explore an application to decision theory in an example of preference reversal. We conclude by formulating basic ingredients of a theory of actualized preferences based in non-classical measurement theory.
    Date: 2005
  6. By: William Barnett (University of Kansas); Apostolos Serletis (University of Calgary); W. Erwin Diewert (University of British Columbia)
    Abstract: This is the front matter from the book, William A. Barnett and Apostolos Serletis (eds.), The Theory of Monetary Aggregation, published in 2000 by Elsevier in its Contributions to Economic Anaysis mongraph series. The front matter includes the Table of Contents and the Introduction by Barnett and Serletis and the Preface by W. Erwin Diewert. The volume contains a unified collection and discussion of W. A. Barnett's most important published papers on financial aggregation theory and monetary economics.
    Keywords: monetary aggregation, money demand, Divisia, Divisia monetary aggregates, index number theory, aggregation theory
    JEL: E41 G12 C43 C22
    Date: 2005–11–07
  7. By: Bruno Tinel (MATISSE)
    Abstract: Technical determinism is often presented as a shortcoming of the old neoclassical approach of which the "new theories" are supposed to be ridded. This paper shows that technical determinism is nevertheless still present.
    Keywords: Technical determinism, radical political economy, theory of the firm.
    JEL: B21 D20 O30
    Date: 2005–08
  8. By: Dolfsma, W.; Verburg, R. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The tension between (social) order and change, or, alternatively formulated, between structure and agency, has a long history in the social sciences (e.g. Verburg 1991). The discussion has substantial philosophical overtones. In this article we recount the history of the discussion. We both acknowledge the more recent admonition that the agent may have been given short shrift in previous eras (Davis 2003), but at the same time argue that one should not negate the reality of social structure or institutions (Hodgson 1999, 2004). In this article we argue, however, that these recent contributions, from the fields of economics, sociology, political science and management, do not provide a much needed account of how the tension between structure and agency may be resolved conceptually. Accounts seem to emphasize either structure or agency, and fail to capture their interrelationships. We submit that that the process of institutionalization does resolve the tension conceptually, focusing on the role of the agent in reproducing institutional setting, but also in instigating institutional change. We provide a theoretical account of the conditions under which institutions change, and the likely direction of such change. In doing so we emphasize the relation between socio-cultural values subscribed to in a society or community and institutional settings and practices (Dolfsma 2004). As institutions should be conceptualized to have both structural as well as ?cultural? aspects (Neale 1987), in many but not all cases irrevocably related, agents can re-interpret or re-define a given institutional structure in the light of a differing perspective, giving rise to tensions felt and possilbly setting in motion a process of institutional change.
    Keywords: Structure;Agency;Institutions;Institutional change;Process;Tensions;
    Date: 2005–11–01
  9. By: Maurizio Pugno
    Abstract: Sen’s capability approach to the assessment of individual well-being and welfare policies, and to the search for theoretical foundations of a paradigm of human development, is challenged by a puzzling fact. In rich countries where material wealth and liberties are at high levels, a significant fraction of the population exhibit malaise in the form of depression, anxiety, addiction, conflicts within the family and among adolescent peers. This evidence suggests that consideration should be made of an additional functioning which is neglected by the capability approach: that of the mind in humans, i.e. the self. This addition is crucial because the self also evaluates well-being, and regulates the capability of choosing. Contributions from psychology, neuroscience, and psychiatry point out that the self is a construct built up by accumulating beliefs based on new and recalled information as a largely non-conscious process. This activity is self-serving, and may inflate or deflate the self-image, thus impairing the functioning of the self in its relation with the world. This problem seems to begin when primary close relationships thwart the feeling of the non-conscious self during infancy, although material care may be guaranteed. Policy implications for the educational and mental health system are briefly drawn.
    Keywords: capability approach,well-being,self,relatedness,unconscious,attachment,intrinsic motivations
    JEL: A12 D81 I31
    Date: 2005
  10. By: Oldrich Kyn (Boston University)
    Abstract: This short paper was presented in the discussion at the CESES conference about 'the Prices in Eastern Europe' in Florence, Italy, 1966. Its purpose was to formulate briefly but as precisely as possible the differences between Pure Market Economy, Command Economy, Lange-Lerner model of Market Socialism, and the plausible system combining the market with central planning. The different systems were evaluated from the point of view of the information flows necessary for coordination of economic decisions.
    Keywords: Market Economy, Command Economy, Market Socialism, Plan and Market, Lange - Lerner,
    JEL: O P
    Date: 2005–11–03
  11. By: Dimitrina Mihaylova (Center for Policy Studies, Central European University)
    Abstract: Ever since the 1990s, social capital has attracted attention from social science researchers. With its focus on the importance of intangible resources such as trust, social capital appeared to supplement existing theories of social and economic change. For its early proponents such as Bourdieu, Coleman and more famously, Putnam, social capital could be understood as a critical component in social reproduction, educational achievement and administrative efficiency. Social capital seems especially relevant in Central and Eastern Europe and the countries of the former Soviet Union. Not only does it direct attention to informal networks as ways of getting things done, it also explores how strong ties of personal trust co-exist with low levels of general trust and how this can affect economic and political reform. In terms of its actual policy implications, the conclusions of social capital research have not always been clear and it may be fair to say that expectations have been scaled down since the World Bank declared that social capital to be the missing link. This study offers a critical review of over seventy studies that have applied social capital to developments in Central and Eastern Europe and the former Soviet Union. The author draws from a variety of social science disciplines as well as including several reports from international organisations. The review investigates five principal fields in which social capital has been used to date and to provides a series of suggestions as to how such research can help encourage institutional and policy innovation.
    JEL: O P
    Date: 2005–11–02

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