nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒04‒18
eight papers chosen by
Erik Thomson
University of Manitoba

  1. Experimental Economics: Applications to Environmental Policy By Andrew Reeson; Karel Nolles
  2. A Model of Non-Informational Preference Change By Dietrich Franz; List Christian
  3. Evolutionary Growth Theory By J. Stan Metcalfe; John Foster
  4. Homo Aequalis: A Cross-Society Experimental Analysis of Three Bargaining Games By Abigail Barr; Chris Wallace; Jean Ensminger; Joseph Henrich; Clark Barrett; Alexander Bolyanatz; Juan Camilo Cardenas; Michael Gurven; Edwins Gwako; Carolyn Lesorogol; Frank Marlowe; Richard McElreath; David Tracer; John Ziker
  5. Du pluralisme dans la science By Nicolas Bouleau
  6. Milton Friedman and U.K. economic policy: 1938-1979 By Edward Nelson
  7. The Econometrics of Social Networks By Yann Bramoullé; Bernard Fortin
  8. Wall Street's First Corporate Governance Crisis: The Panic of 1826 By Eric Hilt

  1. By: Andrew Reeson; Karel Nolles (CSIRO Sustainable Ecosystems, Australia)
    Abstract: Incentives, regulations and other policy interventions intended to promote sustainability work through influencing human behaviour. There is therefore much to be gained from a thorough understanding of exactly how various policy interventions relate to the decision-making process. Experimental economics, and the closely related fields of behavioural economics and behavioural finance, apply an empirical approach to study how people act when faced with a range of economic and social scenarios. The experimental approach was pioneered by Vernon Smith and Daniel Kahneman and others, building on early studies by Chamberlin (1948). In recognition of this work, Kahneman and Smith were awarded the 2002 Nobel Prize in Economic Sciences. This paper briefly reviews the applications and methods of experimental economics, relates some key research findings and describes some examples of its use in informing environmental policy.
    Keywords: Experimental economics; Behavioral economics; Environmental economics; Environmental markets; Market-based instruments; MBIs
    JEL: C90 Q50 Q58
    Date: 2009–01
  2. By: Dietrich Franz; List Christian (METEOR)
    Abstract: According to standard rational choice theory, as commonly used in political science and economics, an agent''s fundamental preferences are exogenously fixed, and any preference change over decision options is due to Bayesian information learning. Although elegant and parsimonious, this model fails to account for preference change driven by experiences or psychological changes distinct from information learning. We develop a model of non-informational preference change.Alternatives are modelled as points in some multidimensional space, only some of whose dimensions play a role in shaping the agent''s preferences.Any change in these `motivationally salient'' dimensions can change the agent''s preferences. How it does so is described by a new representation theorem. Our model not only captures a wide range of frequently observed phenomena, but also generalizes some standard representations of preferences in political science and economics.
    Keywords: mathematical economics;
    Date: 2009
  3. By: J. Stan Metcalfe; John Foster (School of Economics, The University of Queensland)
    Abstract: We begin by outlining competing stylised facts about economic growth and then set out the relations between structural change and aggregate productivity growth contingent on the evolution of the pattern of demand. We then introduce the concept of an industry level technical progress function and show how rates of technical progress are mutually determined as a consequence of increasing returns and the changing distribution of demand. We next sketch a macroeconomic closure of the evolutionary process, expressed in terms of the mutual determination of rates of capital accumulation and rates of productivity growth. In the final section we elaborate upon the restless nature of innovation-based economic growth and the conditions under which Nicholas Kaldor’s stylised facts are compatible with the Clark-Kuznets stylised facts. We may summarise our perspective quite sharply. What distinguishes modern capitalism is not only its order imposing properties that lead to the self organisation of the economy, but also the self transforming properties that create wealth from knowledge and, in so doing, induce the further development of useful knowledge. The manner in which self-organisation and self-transformation interact in terms of adjustments to the composition of demand, as well as the structure of technology and production, is at the core of this essay
    Date: 2009
  4. By: Abigail Barr; Chris Wallace; Jean Ensminger; Joseph Henrich; Clark Barrett; Alexander Bolyanatz; Juan Camilo Cardenas; Michael Gurven; Edwins Gwako; Carolyn Lesorogol; Frank Marlowe; Richard McElreath; David Tracer; John Ziker
    Abstract: Data from three bargaining games - the Dictator Game, the Ultimatum Game, and the Third-Party Punishment Game - played in 15 societies are presented. The societies range from US undergraduates to Amazonian, Arctic, and African hunter-gatherers. Behaviour within the games varies markedly across societies. The paper investigates whether this behavioural diversity can be explained solely by variations in inequality aversion. Combining a single parameter utility function with the notion of subgame perfection generates a number of testable predictions. While most of these are supported, there are some telling divergencies between theory and data: uncertainty and preferences relating to acts of vengeance may have influenced play in the Ultimatum and Third-Party Punishment Games; and a few subjects used the games as an opportunity to engage in costly signalling.
    Keywords: Bargaining games, Cross-cultural experiments, Inequality aversion
    JEL: C72 C9 Z13
    Date: 2009
  5. By: Nicolas Bouleau (CIRED - Centre international de recherche sur l'environnement et le développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales - Ecole Nationale des Ponts et Chaussées - Ecole Nationale du Génie Rural des Eaux et des Forêts)
    Abstract: Dans le cadre d'un colloque de Cerisy sur le thème de "L'économie de la connaissance et ses territoires" nous étudions le caractère pluraliste de la connaissance et de la connaissance scientifique en particulier. Partant du cas des mathématiques d'abord par les exemples de l'analyse non-standard et des mathématiques japonaise de la période de l'Edo (Sangaku) nous analysons la modélisation comme représentation et interprétation du contexte de l'action d'un agent économique, nous tentons d'approfondir les forces et faiblesses du monisme. Nous dégageons ce que nous appelons le préjugé de supériorité analytique comme principale source de la confusion entre pluralisme et relativisme. Nous analysons finalement l'important phénomène de la bosse de Jules Dupuit lié à tout processus d'économisation, particulièrement en matière de connaissance.
    Keywords: pluralisme; monisme; analyse non-standard; sangaku; relativisme; économie de la connaissance
    Date: 2008–11–15
  6. By: Edward Nelson
    Abstract: This paper analyzes the interaction of Milton Friedman and U.K. economic policy from 1938 to 1979. The period under study is separated into 1938-1946, 1946-1959, 1959-1970, and 1970-1979. For each of these subperiods, I consider Friedman's observations on and dealings with key events, issues, and personalities in U.K. monetary policy and in general U.K. economic policy.
    Keywords: Friedman, Milton ; Economic policy - Great Britain
    Date: 2009
  7. By: Yann Bramoullé; Bernard Fortin
    Abstract: In a social network, agents have their own reference group that may influence their behavior. In turn, the agents' attributes and their behavior affect the formation and the structure of the social network. We survey the econometric literature on both aspects of social networks and discuss the identification and estimation issues they raise.
    Keywords: Social network, peer effects, identification, network formation, pair-wise regressions, separability, mutual consent
    JEL: D85 L14 Z13 C3
    Date: 2009
  8. By: Eric Hilt
    Abstract: In July of 1826, several prominent Wall Street firms abruptly went bankrupt, amid scandalous revelations of fraudulent financial practices by their management. Although mostly forgotten today, these events represented a watershed in the early development of the corporation laws and investor protections governing Wall Street: in the aftermath of the scandals, New York State enacted an extensive package of legislation designed to protect the interests of investors. These statutes were some of the the very first of their kind, and had a lasting influence. This paper analyzes the causes of the failures, and the evolution of the law in response. The analysis highlights the critical role played by scandal-driven legislation in the evolution of investor protections and financial regulations.
    JEL: G18 G3 K22 N21 N81
    Date: 2009–04

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