nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒07‒17
six papers chosen by
Erik Thomson
University of Manitoba

  1. Guilbaud's Theorem : an early contribution to judgment aggregation. By Daniel Eckert; Bernard Monjardet
  3. Decision-making Procedures: A General Theory and Its Field Experimental Test By Aldashev, Gani; Kirchsteiger, Georg; Sebald, Alexander
  4. Communication, Advice and Beliefs in an Experimental Public Goods Game By Ananish Chaudhuri; Pushkar Maitra; Susan Skeath
  5. Linking Individuals and Societies By Jasso, Guillermina
  6. WEAKNESS OF WILL By Elias Khalil

  1. By: Daniel Eckert (Institute of Public Economics - University of Graz); Bernard Monjardet (Centre d'Economie de la Sorbonne)
    Abstract: In a paper published in 1952, the French matematician Georges-Théodule Guilbaud has generalized Arrow's impossibility result to the "logical problem of aggregation", thus anticipating the literature on abstract aggregation theory and judgment aggregation. We reconstruct the proof of Guilbaud's theorem, which is also of technical interest, because it can be seen as the first use of ultrafilters in social choice theory.
    Keywords: Arrow's theorem, aggregation rule, judgment aggregation, logical connexions, simple game, ultrafilter.
    JEL: D71
    Date: 2009–06
  2. By: Guang-Zhen Sun
    Abstract: First of all, one point seems in order regarding the title: this article is not intended to be comprehensive in its coverage. Rather, it focuses on a deliberately and highly selected body of studies on the division of labor ranging from ancient Greeks to WWII as represented by those reproduced in Sun (2005a), with particular attention paid to what I believe has been relatively unknown even among economists of specialization. A more systematic examination, covering hundreds of studies on the division of labor by ancient Greeks, ancient Chinese, medieval Islamic scholars, medieval Latin scholasticists and Anglo-Europeans of recent centuries is found in Sun (2005b). But what is the (commonly accepted definition of) division of labor? The one that Peter Groenewegen uses for the entry “division of labor†in New Palgrave’s Dictionary of Economics (1987, p.901) may be accepted by overwhelmingly most, if not all, economists: “The division of labor may be defined as the division of a process or employment into parts, each of which is carried out by a separate person.†That is, individuals cooperate, consciously or not, to undertake a divisible process or employment. As such, there naturally emerge two fundamental questions: Why, and how does the separation of employment among persons bear upon important economic and social consequences? In fact, the studies to be surveyed below that emerged over twenty-five centuries or so up to WWII basically centre round the above questions. We will first of all map out the evolution of ideas about division of labor up to the classical political economy in Sections I and II. For the body of economic analysis was considerably enriched since then, with different schools/perspectives simultaneously developing and sometimes competing with one another, we will focus on three themes, explored respectively by three most influential schools that have made contributions of lasting value to the economics of the division of labor. Section III examines the idea of mutual interdependence between increasing returns to the division of labor and the extent of the market originating from Smith, substantiated by Wakefield, Mill, Marshall and culminating in Young (1928). Section IV focuses on the division of labor in society and the division of labor in manufacture, on which Marx offers important insights, foreshadowing some modern theories of the firm well into 1990s. Analyses of unfavorable sociological consequences of the division of labor are also briefly surveyed in this section. Section V examines literature on the overarching theme of the spontaneous order, which can be traced back to Mandeville and was later on elaborated by the Scottish Enlightenment men, and the Austrians especially Hayek. Indeed, the Austrians not only developed a general theory of the spontaneous order but also applied it to analyses of many issues that are concomitant with the division of labor, in particularly the origin of money and the socio-economics of dispersed knowledge. Finally, Section VI concludes.
    JEL: L85
    Date: 2009–05
  3. By: Aldashev, Gani; Kirchsteiger, Georg; Sebald, Alexander
    Abstract: It is a persistent finding in psychology and experimental economics that people's behavior is not only shaped by outcomes but also by decision-making procedures. In this paper we develop a general framework capable of modelling these procedural concerns. Within the context of psychological games we define procedures as mechanisms that influence the probabilities of reaching different endnodes. We show that for such procedural games a sequential psychological equilibrium always exists. Applying this approach within a principal-agent context we show that the way less attractive jobs are allocated is crucial for the effort exerted by agents. This prediction is tested in a field experiment, where some subjects had to type in data, whereas others had to verify the data inserted by the typists. The controllers' wage was 50% higher than that of the typists. In one treatment the less attractive typists' jobs were allocated directly, whereas in the other treatment the allocation was done randomly. As predicted, random allocation led to higher effort levels of the typists than direct appointment.
    Keywords: Appointment Procedures; Procedural Concerns; Psychological Game Theory
    JEL: A13 C70 C93 D63
    Date: 2009–07
  4. By: Ananish Chaudhuri; Pushkar Maitra; Susan Skeath
    Abstract: We study the efficacy of horizontal versus vertical social learning processes in a public goods game. In one treatment, subjects about to play the game can make nonbinding common knowledge announcements about their intentions while, in another, subjects do not communicate directly with group members but receive common knowledge advice from the previous generation of players. A third treatment has subjects play with neither communication nor advice. We find that groups that engage in peer communication achieve much lower levels of contribution to the public good than do groups that receive advice. We attribute this finding in part to the fact that some subjects in the communication treatment opted to make no announcement during the communication phase of play.
    Keywords: Voluntary contributions mechanism, Advice, Communication, Beliefs, Experiments.
    JEL: C92 C33 C34
    Date: 2009–06
  5. By: Jasso, Guillermina (New York University)
    Abstract: How do individuals shape societies? How do societies shape individuals? This paper develops a framework for studying the connections between micro and macro phenomena. The framework builds on two ingredients widely used in social science − population and variable. Starting with the simplest case of one population and one variable, we systematically introduce additional variables and additional populations. This approach enables simple and natural introduction and exposition of such operations as pooling, matching, regression, hierarchical and multilevel modeling, calculating summary measures, finding the distribution of a function of random variables, and choosing between two or more distributions. To illustrate the procedures we draw on problems from a variety of topical domains in social science, including an extended illustration focused on residential racial segregation. Three useful features of the framework are: First, similarities in the mathematical structure underlying distinct substantive questions, spanning different levels of aggregation and different substantive domains, become apparent. Second, links between distinct methodological procedures and operations become apparent. Third, the framework has a potential for growth, as new models and operations become incorporated into the framework.
    Keywords: micro-macro link, justice, comparison, status, power, identity, happiness, personal quantitative characteristics, personal qualitative characteristics, deductive theory, probability distributions, lognormal distribution, Pareto distribution
    JEL: C02 C16 D31 D6 D7 D8 J71
    Date: 2009–07
  6. By: Elias Khalil
    Abstract: The dominant view regards weakness of will an anomaly facing the standard theory of rationality. The paper argues the opposite: What is anomalous is that weakness of will is not pervasive enough. In a simple model, the paper shows that weakness of will is the dominant strategy in a game between current self and future self. This leads to the motivating question of the paper: Why is weakness of will is not pervasive—given that precommitment and punishment are not sufficiently pervasive to remedy the weakness of will? The paper argues that the answer lies in what Adam Smith calls the “propriety†mechanism: Humans demand self-respect and, hence, exercise self-command over appetites and emotions.
    Keywords: property of others (justice); property of future self (prudence); decision-action gap (weakness of will); mechanisms (precommitment and propriety); trust; appetites and emotions; libertarian paternalism.
    JEL: D0
    Date: 2009–06

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