nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒02‒22
fifteen papers chosen by
Erik Thomson
University of Manitoba

  1. Relation of Game Theory to Economic History and Marginalism By Killion, M. Ulric
  2. Existe um Institucionalismo? Caminhos para uma teoria económica satisfatória By Pinto, Hugo
  3. Full employment abandoned: shifting sands and policy failures By Mitchell William; Muysken Joan
  4. A Critical review of economic analyses of religion By Vikas Kumar
  5. Preferences psychologiques et nouvelle économie politique By Antoine Billot; Chantal Marlats
  6. Revisiting the economy by taking into account the different dimensions of well-being By Becchetti, Leonardo
  7. Demented Prisoners By Klaus Kultti; Hannu Salonen
  8. Economic Freedom as a Driver for Growth in Transition By Pääkkönen, Jenni
  9. Endogenous Social Preferences, Heterogeneity and Cooperation By Zarri, Luca
  10. On Granger-causality and the effect of interventions in time series By Eichler Michael; Didelez Vanessa
  11. Emotion and economic decision in the ultimatum game (In French) By Emmanuel PETIT (GREThA UMR CNRS 5113)
  12. Individuals' Voting Choice and Cooperation in Repeated Social Dilemma Games By Annamaria Nese; Patrizia Sbriglia
  13. Cognitive styles in business and management: a review of development over the past two decades By Armstrong, S.; Cools, E.
  14. Financial Crises: Past lessons and Policy Implications By Davide Furceri; Annabelle Mourougane
  15. Joseph Alois Schumpeter: una vita per l'Economica Nel 125° anniversario della nascita By Umberto Antonio de Girolamo

  1. By: Killion, M. Ulric
    Abstract: The Article presents a brief survey of economic history, by emphasizing the earlier history of neo-classical economic theory and the economic theory of marginal utility. The Articles does so, by exploring the relation of game theory or the strategic game to developments in the field or science of economics, especially developments in economic thought occurring during the earlier marginal revolution or the economic history of marginalism. By doing so, the Article intends to show, though most attribute the new science of modern game theory to the field of mathematics, that the influence of corresponding or correlating developments in the field, science or discipline of economics was equally influential in the birth of game theory or the strategic game.
    Keywords: Economic history, neo-classical theory, marginalism, game theory
    JEL: B1 A1 C7
    Date: 2009–02–12
  2. By: Pinto, Hugo
    Abstract: The essay will try to debate about the institutional theory, confronting the emergence of institutionalism with the limits of neoclassical theory. The initial old institutionalism and the new institutionalism ideas will be discussed trying to underline what distinguishes the ideas of Coase and Williamson from other approaches that tried to export the economic theory and its methodological individualism, a movement that became known as the imperialism of economics, a transposition of methods and microeconomic analysis, to subjects not commonly analyzed by economics, as the ones served as the basis for the work of Becker. In the end it will try to touch on whether the old theory and new institutionalism are converging or diverging towards a new institutionalism.
    Keywords: Institutions; Old institutionalism; New institutionalism; Neoclassical Theory
    JEL: B1 B52 D02
    Date: 2008–02
  3. By: Mitchell William; Muysken Joan (METEOR)
    Abstract: This paper briefly analyses the shifts in economic theory that have moved policy makers from unambiguously pursuing full employment, to the current state where full employability is justified as being optimal. We also explore how these theoretical developments translated in practice, culminating in the 1994 OECD Jobs Study which eschewed a role for macroeconomic policy in reducing unemployment. The final sections of the paper outline an alternative view of macroeconomic theory and policy opportunities. We argue that a central plank in modern macroeconomic policy settings should be the introduction of employment guarantees, which we term the Job Guarantee (JG).
    Keywords: Economics (Jel: A)
    Date: 2009
  4. By: Vikas Kumar (Indira Gandhi Institute of Development Research)
    Abstract: Recent years have seen increasing interest in economic analyses of religion. We carry out a critical review of Economics of Religion (EoR) in this review essay. We find that on the one hand EoR has made a significant contribution to enhance our understanding of secular trappings of religion and to break the stranglehold of non-rational approach to religion. On the other it has failed systematically to address the core of religion, namely, belief in its purportedly supernatural basis. Furthermore the methodological foundations of EoR are far from settled. We identify the shortcomings of the literature and suggest remedial measures, wherever possible.
    Keywords: Church, Credence Goods, Economic Methodology, Inscrutable Markets, Religion
    JEL: A1 B2 B4 B5 Z12
    Date: 2008–11
  5. By: Antoine Billot; Chantal Marlats
    Abstract: Nous présentons ici, dans un premier temps, la Théorie des Préferences Psychologiques à travers, d'une part, l'axiomatique proposée par Sandbu (2008) pour les décisions individuelles pures et, d'autre part, celle de Segal et Sobel (2007) pour les décisions stratégiques. Dans une seconde partie, nous caractérisons l'apport potentiel de cette littérature à la définition d'une nouvelle "économie politique" et nous cherchons à délimiter le champ pertinent d'investigation d'une telle approche qui combinerait à la fois les exigences "micro" que véhiculent les préférences psychologiques avec l'objet plus "macro" de l'économie politique (comprise comme la branche de la science économique qui étudie les conséquences de l'intervention d'un décideur public et les conditions optimales de l'action collective). Enfin, nous défendons la thèse selon laquelle l'étude de l'action collective au niveau particulier des "communautés" ou des systèmes dits "polycentriques" peut a priori profiter des résultats abondants produits par la Théorie des Préferences Psychologiques - tout autre niveau d'investigation semblant a contrario inadapté en l'état actuel des développements de cette théorie.###[english abstract: First, we present what is called the Theory of Psychological Preferences (altruism, rational reciprocity...) through, on one side, the list of axioms proposed by Sandbu (2008) for pure individual decisions and, on the other side, that of Segal and Sobel (2007) for strategical ones. Second, we characterize the potential relevance of such a theory to define a new "politicial economy" approach and we search to define the precise scope of this field of investigation in combining the micro'demands of the psychological preference theory with the standard macro'ones. Finally, we show that polycentered models seem to be the only framework within which individual psychological preference is an appropriate tool to study the collective impact of altruism, social loyalty, intrinsic reciprocity and so forth.]###
    Date: 2009
  6. By: Becchetti, Leonardo (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: In standard economic models benevolent governments are the unique actors in charge to tackle the problem of reconciling individual with social wellbeing in presence of negative externalities and insufficient provision of public goods. Some promising practices of grassroot economics suggest however that, even a minoritarian share of concerned individuals and socially responsible corporations which internalise externalities, significantly enhance the opportunities of promoting "sustainable happiness" harmonising creation of economic, social and environmental value.
    Keywords: well-being; sustainable happiness; role; ethical and solidarity initiatives
    JEL: A13
    Date: 2009–01–29
  7. By: Klaus Kultti (Department of Economics, University of Helsinki); Hannu Salonen (Department of Economics, University of Turku)
    Abstract: We study infinitely repeated Prisoners' Dilemma, where one of the players may be demented. If a player gets demented in period t after his choice of action, he is stuck to this choice for the rest of the game. So if his last choice was ``cooperate'' just before dementia struck him, then heÕs bound to cooperate always in the future. Even though a demented player cannot make choices any more he enjoys the same payoffs from strategy profiles as he did when healthy. A player may prove he is still healthy by showing a (costly) health certificate. This is possible only as long as the player really is healthy: a demented player cannot get a clean bill of health. We study an asymmetric information game where it is known that player 1 cannot get demented but player 2 may be either a ``healthy'' type who will never be demented or a ``dementible'' type who eventually will get demented. We study when cooperation can be maintained in a perfect Bayesian equilibrium with at most health check.
    Keywords: prisoners' dilemma, dementia, co-operation
    JEL: C72
    Date: 2009–02
  8. By: Pääkkönen, Jenni (BOFIT)
    Abstract: This paper reviews the political economy view of economic growth in post-communist economies making the transition to free markets, focusing on the role of economic policy and institutions. We test the hypothesis that better institutions, measured in terms of economic freedom, contribute to growth. The empirical results from the cross-section of transition economies confirm this hypothesis. The paper concludes that non-linearities are present in the growth model and that differences arise depending on how economic well-being is defined.
    Keywords: growth; institutions; human capital
    JEL: O17 O40 O57
    Date: 2009–02–12
  9. By: Zarri, Luca (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: We set up an analytical framework focusing on the problem of interaction over time when economic agents are characterized by various types of distributional social preferences. We develop an evolutionary approach in which individual preferences are endogenous and account for the evolution of cooperation when all the players are initially entirely selfish. In particular, within motivationally heterogeneous agents embedded in a social network, we adopt a variant of the indirect evolutionary approach, where material payoffs play a critical role, and assume that a coevolutionary process occurs in which subjective preferences gradually evolve due to a key mechanism involving behavioral choices, relational intensity and degree of social openness. The simulations we carried out led to strongly consistent results with regard to the evolution of player types, the dynamics of material payoffs, the creation of significant interpersonal relationships among agents and the frequency of cooperation. In the long run, cooperation turns out to be the strategic choice that obtains the best performances, in terms of material payoffs, and "nice guys", far from finishing last, succeed in coming out ahead.
    Keywords: Behavioral Economics; Cooperation; Prisoner's Dilemma; Social Evolution; Heterogeneous Social Preferences; Indirect Evolutionary Approach
    JEL: B41 C73 D74 Z13
    Date: 2008–06–24
  10. By: Eichler Michael; Didelez Vanessa (METEOR)
    Abstract: We combine two approaches to causal reasoning. Granger-causality, on the one hand, is popular in fields like econometrics, where randomised experiments are not very common. Instead information about the dynamic development of a system is explicitly modelled and used to define potentially causal relations. On the other hand, the notion of causality as effect of interventions is predominant in fields like medical statistics or computer science. In this paper, we consider the effect of external, possibly multiple and sequential, interventions in a system of multivariate time series, the Granger-causal structure of which is taken to be known. We address the following questions: under what assumptions about the system and the interventions does Granger-causality inform us about the effectiveness of interventions, and when does the possibly smaller system of observable times series allow us to estimate this effect? For the latter we derive criteria that can be checked graphica lly and are in the same spirit as Pearl''s back-door and front-door criteria (Pearl 1995).
    Keywords: econometrics;
    Date: 2009
  11. By: Emmanuel PETIT (GREThA UMR CNRS 5113)
    Abstract: We study the impact of induced positive or negative emotions on economic decisions in a negotiation context. Decision was assessed with a well studied social task, the Ultimatum game. In this task, subjects had to make decisions to either accept or reject fair or unfair offers from other players. Emotion was induced with short movie clips. Our results show that participants induced with negative emotions (such as anger or indignation) reject significantly more unfair offers than subjects induced with positive emotions (such as joy or elation). These results demonstrate that even subtle emotions can play an important role in biasing decision making.
    Keywords: Moral emotions, negotiation, induction procedure
    JEL: A12 C70 C91
    Date: 2009
  12. By: Annamaria Nese; Patrizia Sbriglia
    Abstract: In this paper we explore the relationship between the individual’s preference for cooperation and the establishment of cooperative norms. Our aim is to provide an experimental test of the evolutionary hypothesis (see Carpenter, 2004, Fehr and Gachter 2002; Gintis 2000; Boyd, Bowles, Gintis and Richerson 2003; Bowles and Gintis 2004), according to which individuals are prepared to punish defectors in experimental social dilemma games because they want to enforce a social (“altruistic”) norm which may conduce to increasing their future payoffs, as in the case of sanctions against free riding behaviour. According to this line of research , the high levels of cooperation we observe in our societies can, therefore, be strictly related to the establishment of social norms which are able to enforce and maintain cooperation in the long run. We study the results of two experiments in which the individuals decided both whether to participate in a common project and the institutional rule according to which the profits of the project had to be shared among each of the participants in the group. They could choose between 1) a regime where gains were shared equally, regardless of individuals’ contributions and without sanctions and rewards (System A); 2) a regime where individuals were paid according to their marginal contribution, but the profits of the investments were lower than in the other contexts (System B); finally 3) a regime in which gains were shared equally (as in System A), but individuals were allowed to punish (and\or reward) free riding (cooperative) behaviours as in Sefton, Shupp and Walker (2007). Before the experiments took place, our subjects were required to fill a questionnaire composed of four sections, where their attitude to cooperate and their opinions on civic values and free riding behaviours were thoroughly explored. We then monitored the behaviour of potential free riders and cooperators in the game and their institutional choices. Our results partly contradict the evolutionary hypothesis in as much as System A and B received the largest shares of votes in almost all rounds and they were voted by free riders and cooperators alike. Thus, most individuals do not like sanctions (incentives) against defectors and free riders (cooperators), and their institutional preferences do not seem to be related to their willingness to cooperate. The inspection of individual data, however, reveals some interesting points. In fact, we can assert that System C was mostly chosen by cooperative individuals in response to observed free riding behaviour. Furthermore, when a cooperative individual chose C, she would tend to punish free riders and reward cooperators. Our conclusion is that, as far as the institutional choices are concerned, beside the profit motivations underlined in the evolutionary hypothesis, the ethical and cultural unobserved individual preferences play an important role. There is a number of individuals (limited in our experiments, ranging between 15 and 30 per cent of the entire population) who see cooperation as the “right” thing to do, and therefore are prepared to implement institutional rules that may favour this collective outcome. Most people in our experiments did not share these same values.
    Keywords: public good games, experiments, voting choices
    JEL: C90 C91
    Date: 2009–02
  13. By: Armstrong, S.; Cools, E. (Vlerick Leuven Gent Management School)
    Abstract: This paper considers the theory, measurement, and practical relevance of cognitive style for both management practice and organisational behaviour. We simplify matters by confining our discussions to cognitive style per se, deliberately excluding the construct of learning styles. We also confine our analysis to those constructs that have a strong conceptual and empirical foundation in business and management or organisational and occupational settings. We aim to examine ways in which these styles have influenced both management and organisational behaviour from multiple perspectives over the past two decades. To conclude, we draw reasoned and authoritative conclusions about the implications that research into cognitive style has for management practice and organisational behaviour, and ways in which the field needs to develop in order to successfully bridge the relevance gap between theory and practice.
    Keywords: Cognitive styles, review, business and management, organisational behaviour, relevance gap, pragmatic science
    Date: 2009–02–12
  14. By: Davide Furceri; Annabelle Mourougane
    Abstract: This overview paper examines the financial crisis in light of past country experience and economic theory and sets out some preliminary policy recommendations. A number of facets of the crisis are detailed, including its origins and spreading factors as well as crisis resolution policies and their associated gross and net fiscal costs. The implications of the crisis on key macro-economic variables are subsequently presented. Finally, policy recommendations for both addressing the economic downturn and enhancing the resilience of the economies over the medium to long-term are discussed.<P>Crises financières : leçons du passé et implications de politiques économiques<BR>Cet article donne une vue d'ensemble de la crise financière à la lumière des expériences passées et de la théorie économique et tire des recommandations préliminaires de politiques économiques. De nombreuses facettes de la crise sont détaillées, notamment ses origines et ses facteurs de propagation, de même que les politiques de résolution de crises et leur coût budgétaire (brut et net). Les répercussions de la crise sur les variables macro-économiques clefs sont ensuite présentées. Au final, des recommandations de politiques économiques sont discutées pour à la fois répondre au retournement économique et accroître la résilience des économies sur le moyen et le long terme.
    Keywords: macroeconomic policies, politique macro-économique, financial crisis, crise financière, fiscal costs, coûts budgétaires
    JEL: E44 E6 G1
    Date: 2009–02–17
  15. By: Umberto Antonio de Girolamo
    Date: 2008–12

This nep-hpe issue is ©2009 by Erik Thomson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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