nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2008‒03‒15
nine papers chosen by
Erik Thomson
University of Chicago

  1. Friedman’s Methodology: A Puzzle and A Proposal for Generating Useful Debates through Causal Comparisons (with a postscript on positive vs. normative theories) By Khan, Haider A.
  2. The Growing Influence of Economics and Economists on Antitrust: An Extended Discussion By Lawrence J. White
  3. The economics of knowledge interaction and the changing role of universities By Antonelli Cristiano; Pierpaolo Patrucco; Rossi Federica
  4. The Visibility of Ukrainian Economists 1969-2005 By Tom Coupe
  5. Free Will: A Rational Illusion By Itzhak Gilboa
  6. The rationality of expectations formation and excess volatility By Julio Davila
  7. Dynamic preferences, moral values and emotions in economical analysis (In French) By Emmanuel PETIT (GREThA)
  8. Is the veil of ignorance only a concept about risk? An experiment By Hannah Hörisch
  9. The Three Spheres of Society – Markets, Governments, and Communities – Related to Fiske’s Four Relational Modes:Modeled in dynamic balance explaining why social goods are more important than social capital By Wicks, Rick

  1. By: Khan, Haider A.
    Abstract: Milton Friedman’s “The Methodology of Positive Economies” is still one of the most widely read pieces on economic methodology. One reason for this might be Friedman’s attractive proposal that economists use theories and hypotheses as pragmatic devices to summarize data and make predictions over the relevant range of observations. Logically, this should lead to a fair minded comparison among many contending theories. However, Friedman's actual examples and discussion of these examples raise a puzzle. The field of comparison seems unduly narrow from the beginning. In my attempt to resolve this, I consider some logical and ontological problems for Friedman's position. I end up by suggesting a scientific realist approach to testing theories by causal comparisons over a wide field of contending theories.
    Keywords: Positive theory; Normative Theory; Predictability; Scientific Realism; Causal Depth; Causal Comparisons
    JEL: B10 B31 A12 B00 B41
    Date: 2008–03
  2. By: Lawrence J. White
    Date: 2008
  3. By: Antonelli Cristiano (University of Turin); Pierpaolo Patrucco (University of Turin); Rossi Federica
    Date: 2008–02
  4. By: Tom Coupe (Kyiv School of Economics and Kyiv Economics Institute)
    Abstract: This article studies the visibility of Ukrainian economists. It shows that the number of Ukrainians trained at Western universities is increasing fast and that these economists now start publishing in international journals. At the same time, Ukrainian economists residing and educated in Ukraine still rarely publish in international economics journals. An explanation for both findings is offered.
    Keywords: ranking, Ukraine, economists
    JEL: A10
    Date: 2008–03
  5. By: Itzhak Gilboa
    Date: 2008–03–05
  6. By: Julio Davila (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I)
    Abstract: I establish, in simple deterministic overlapping generations economies, that if each agent holds rationally formed expectations in the sense that any other expectations justifying his choices imply a smaller likelihood for the history he observes with limited memory, then there are rationally formed expectations equilibria exhibiting an excess volatility that no rational expectations equilibrium can match. Given that the limited records or finite memory case may arguably be the relevant one from a positive viewpoint, this result suggests that the possibility of excess volatility as an equilibrium phenomenon has been downplayed by the use of the rational expectations hypothesis.
    Keywords: Expectations, rationality, volatility.
    Date: 2008–02
  7. By: Emmanuel PETIT (GREThA)
    Abstract: Our analysis is about the role of emotions and moral values in economical analysis. We use the theory of emotions of Livet (2002) in order to understand the behaviour of individuals alternatively in the Akerlof (1991)’s model of undue obedience and in a public good experiment. We argue that the emotional process permits us to reveal to ourselves our true preferences or values. We thus claim that recent economic analysis should take into account the role of emotion not only as a psychic cost or even a rational tool but also as a useful warning process.
    Keywords: Theory of emotions, obedience to authority, cooperation, public goods game, moral values
    JEL: B49 A13 C90 H41
    Date: 2008
  8. By: Hannah Hörisch (University of Munich, Seminar for Economic Theory, Ludwigstraße 28 (Rgb.), 80539 Munich, Germany, email:
    Abstract: We implement the Rawlsian veil of ignorance in the laboratory. Our experimental design allows separating the effects of risk and social preferences behind the veil of ignorance. Subjects prefer more equal distributions behind than in front of the veil of ignorance, but only a minority acts according to maximin preferences. Men prefer more equal allocations mostly for insurance purposes, women also due to social preferences for equality. Our results contrast the Utilitarian's claim that behind the veil of ignorance maximin preferences necessarily imply infinite risk aversion. They are compatible with any degree of risk aversion as long as social preferences for equality are sufficiently strong.
    Keywords: deterrence, law and economics, incentives, crowding out, experiment
    JEL: D64 C99 D63
    Date: 2008–02
  9. By: Wicks, Rick (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Social scientists, journalists, and others typically refer to three social “spheres”: markets, governments, and communities – whether based on kinship, location, or belief. This taxonomy is here related to Fiske’s (1991) relational modes (RMs): Community-Sharing, Authority-Ranking, Equality-Matching, and Market-Pricing, which display fundamental cumulative mathematical characteristics, and develop spontaneously in children (regardless of the emphasis in the surrounding culture); in the same order; and at about the same ages. CS identifies communities, while EM adds an alternative mode of community resource-transfer (fairness, equality). Governments and markets apparently differentiated from the primordial community sphere to express other modes: AR in governments, and MP in markets. Each sphere is assumed to have an essential core, beyond which it can expand if and as other spheres shrink. In the long run, the size of each sphere may reflect changing social, psychological, and physical (including information) technologies; changing cultural preferences for the private, public, and social goods (and social capital) produced in the three spheres; and some resulting meta-economic efficiency. In the short to medium run, however, the outcome depends on human will and choice in evaluating uncertain information about technologies, preferences, and efficiency. The outcome can thus be influenced by ideology, including through the application of inappropriate RMs. Communities produce social goods, including a sense of identity, meaning, and purpose; feelings of kindness, companionship, and love; and much more. Although social goods can be private, they are inherently non-marketable, so they are distinct from typical private goods. Similarly, although social goods can be public, most cannot be produced by governments, so they are distinct from typical public goods. Analogously to physical capital, social capital – also produced by communities – can be understood as a factor of production of either private or public goods. Valuing social capital instrumentally (an MP value), as recent economic theory has done, can thus be destructive of the source of social capital, communities. Economic theory – and economists – could contribute to the maintenance and development of this third sphere of communities and social goods by simply acknowledging its distinct RMs and its omission from their usual analyses.<p>
    Keywords: meta-economic efficiency; social taxonomy
    JEL: A12 A13 B52 D20 H10 O30 P00 Z10
    Date: 2008–03–10

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