nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2007‒05‒19
four papers chosen by
Erik Thomson
University of Chicago

  1. Values, norms, transactions and organizations By Américo M. S. Carvalho Mendes
  2. Transaction Cost Economics: An Introduction By Williamson, Oliver E.
  3. Should Credit be a Right ? By Marek Hudon
  4. Rational Truth-Avoidance and Self-Esteem By David Andolfatto; Steeve Mongrain; Gordon Myers

  1. By: Américo M. S. Carvalho Mendes (Faculdade de Economia e Gestão, Universidade Católica Portuguesa (Porto))
    Abstract: This paper may be considered an essay on metaeconomics, since it deals with the meaning of several concepts often left undefined, or very briefly defined in economic theories. These concepts are the following: value including the values of things and moral values, social norms or institutions, social power, goods and services, transactions and organizations (firms, and others). The paper starts by proposing a general concept of value, encompassing both the value of things and moral values. From this concept it proceeds to the definition of six different types of values of things and moral values and to the concept of value transformation process of things which includes all the operations dealt with in economic theory as well as many other human actions. The last part of the paper starts with the distinction between moral values and social norms (or institutions) and the roles of social power and human organization in connecting the domains of morality and social normativity. The paper proceeds by distinguishing different types of norms, including possession norms which are important for defining the concepts of goods and services and transaction processes.
    JEL: A13 Z13
    Date: 2007–05
  2. By: Williamson, Oliver E.
    Abstract: This overview of transaction cost economics is organized around the “Carnegie Triple” – be disciplined; be interdisciplinary; have an active mind. The first of these urges those who would open up the black box of economic organization to do so in a modest, slow, molecular, definitive way, with the object of deriving refutable implications and submitting these to empirical testing. The second recommends that the student of economic organization be prepared to cross disciplinary boundaries if and as this is needed to preserve veridical contact with the phenomena. The injunction have an active mind is implemented by being curious and asking the question “What is going on here?” The paper concludes with a discussion of operationalization.
    JEL: D2 D73 D86 L2
    Date: 2007
  3. By: Marek Hudon (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and Harvard University, Boston.)
    Abstract: Access to credit is today a main constrain for many entrepreneurs. This article studies the question of a right to credit. If access to financial services is so crucial and too many hurdles stop the very poor citizens to benefit from the opportunities the markets can offer, one can consider, as Nobel Prize Laureate M. Yunus, that a specific right should be established. Nevertheless, the use of credit is still controversial and does not always lead to economic development. Hence, rather than a loose right to credit, we argue for a right in a goal-right system. This system could take into account the important elements necessary to the positive impact of credit.
    Keywords: human right, credit, justice, microfinance
    JEL: B0 O16 Q14
    Date: 2007–05
  4. By: David Andolfatto (Simon Fraser University); Steeve Mongrain (Simon Fraser University); Gordon Myers (Simon Fraser University)
    Abstract: We assume that people have beliefs about their abilities, that these generate self-esteem, and that self-esteem is valued intrinsically. Individuals face two choices; one of which strictly dominates the other in a pecuniary sense, but necessarily involves gathering information concerning one's (unobserved) ability. We lay out the circumstances under which an individual may find it rational to reject the dominant choice; an act which, in social psychology is described as avoiding the situation, but which we label truth-avoidance. We find that the incentive to avoid the truth is increasing in income and decreasing in self-esteem, the perceived accuracy of one's self-assessment, and the role which luck plays in generating opportunities.
    Keywords: self-esteem, confidence, signal-extraction, truth-avoidance.
    JEL: D83 D1
    Date: 2007–05

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