nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒08‒08
seven papers chosen by
Erik Thomson
University of Manitoba

  1. Die Krise der Wirtschaft: Auch eine Krise der Wirtschaftswissenschaften? By Gebhard Kirchgassner
  2. On the Truly Noncooperative Game of Life on Earth: In Search of the Unity of Nature & Evolutionary Stable Strategy By Funk, Matt
  3. Beauty Contested. How much of Keynes’ remains in Behavioural Economics Beauty Contests? By Alessandro Lanteri; Anna Carabelli
  4. In Memory of Dr. Ali Al-Gritly (1913-1982): His Views on Egypt’s Experience with Socialism By Yamada, Toshikazu
  5. Carl Menger and Friedrich von Wieser on the role of knowledge and beliefs By Agnès Festré
  6. The Resolution Game - A Multiple Selves Perspective By Dimitri Migrow; Matthias Uhl
  7. Punishment with Uncertain Outcomes in the Prisoner’s Dilemma By Peter Duersch; Maroš Servátka

  1. By: Gebhard Kirchgassner
    Abstract: Is the economic and financial crisis also a crisis of Economics? From different perspectives, today there is rather harsh criticism of Economics as a Social Science. In this paper, first, some of the recent failures of Economics are discussed. Then some of the criticisms are taken up that are less convincing, in particular criticisms of the application of the economic model of behaviour, the mathematisation of Economics and the principle of value freedom. The ap-propriate role of the government as well as of competition is discussed, and also which other consequences should be drawn for Economics as a science but also for economic policy. Fi-nally, we debate whether there is, besides the economic crisis, really as crisis of Economics as well.
    Keywords: Economic Crisis; Financial Crisis; Economic Theory; Role of the Govern-ment; Mathematics; Value Freedom; Pension System
    JEL: A10 H10
    Date: 2009–07
  2. By: Funk, Matt
    Abstract: The theory presented here was developed to address the problem of the long-term survival of the human species. This paper tables axioms which fruitfully model The Problem of Sustainable Economic Development, a theoretical framework which, reductio ad absurdum, falsifies many widely-held economic, evolutionary, and ecological principles, including the central thesis of ‘ecological economics’. This brief communiqué lays the foundation for an evolutionary stable, sustainable economic development strategy, and, thus, fosters national security, international cooperation, global threat mitigation, and, ultimately, survival of the human species.
    Keywords: Human survival; sustainable economic development; noncooperative games; problem of induction; natural selection; astrophysical and planetary phænomena; global threat mitigation; evolutionary stable strategy
    JEL: Q50 C20 Z10
    Date: 2009–07–04
  3. By: Alessandro Lanteri; Anna Carabelli
    Abstract: In one of the most famous passages of economic literature, John Maynard Keynes (1936, p.156) likens the stock market to a beauty contest in which the winners are those who anticipate the average opinion. Recently there have been attempts at investigating the BC experimentally (Nagel 1995, Duffy & Nagel 1997, Ho et al. 1998, Bosch-Domenech et al. 2002, Güth et al. 2002). In Experimental Beauty Contests, participants choose a real number from a closed interval, e.g. I [0,100]. Whoever picks the number closest to p times the average (usuallywith p = 2/3) is the winner of a monetary reward. An experiment like this is dominance solvable: the process of iterated elimination of dominated strategies leads to the unique and stable equilibrium at which every player chooses zero, and every player wins. Keynes’ metaphor, on the other hand, referred to a situation in which not all participants can win, so that the goal of individual investors and speculators must be “to outwit the crowd” (p. 152). Despite the differences, the Keynesian theory of decision under uncertainty tallies with the behaviour observed in Experimental Beauty Contests.
    Keywords: Beauty Contest, Behavioural Economics, Keynes, Reasoning.
    JEL: B31 C9 D81
    Date: 2008–06
  4. By: Yamada, Toshikazu
    Abstract: This essay reexamines the great contributions made by Dr. Ali Al-Gritly to Egypt. He was the finance minister for a short period at the beginning of the 1950s and later was appointed as chairman of the Bank of Alexandria. In 1966, he completed a book (Al-Gritly [1966 (1974)]) on the economic history of Egypt. However, the book was banned from publication due to irresistible circumstances. At that time, with Arab Socialism on the ascendance, his views on certain policies were not welcomed by the top political hierarchy. In 1974, the book was finally allowed to be published, and he wrote and published another book in 1977 (Al-Gritly [1977]) on the development of the Open Door Policy and the new economic policies accompanying it.
    Keywords: Egypt, Economic history, Economic policy, Socialism, Al-Grity, Ali, Socialist transformation, Family planning, Democratic socialism
    JEL: P27 B31 E5 H1 O2 O3 P21
    Date: 2009–03
  5. By: Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: ?
    Keywords: Knowledge ; philosophical roots of knowledge ; economic traditions
    Date: 2009
  6. By: Dimitri Migrow (University of Regensburg, Economics Department, Chair for International and Monetary Economics); Matthias Uhl (Max Planck Institute of Economics, International Max Planck Research School on Adapting Behavior in a Fundamentally Uncertain World, Jena)
    Abstract: The notion of choice inconsistency is widely spread in the literature on behavioral economics. Several approaches were used to account for the observation that people reverse their choices over time. This paper aims to explain the formation of resolutions regarded as internal self-binding devices. It moves away from anthropocentric neoclassicism and embraces a more atomistic notion of a player by defining intrapersonal agents as strategic actors. The magnitude of state-dependency is seen as a key driver of intrapersonal conflict modelled by the incongruity of the preferences of two opposing agents. The sequential conceptualisation basically allows for experimental testing.
    Keywords: Multiple Selves, Agency, Intrapersonal Conflict, Resolutions, Self-Binding, Self-Control, Commitment
    JEL: C72 D01
    Date: 2009–08–06
  7. By: Peter Duersch; Maroš Servátka (University of Canterbury)
    Abstract: This paper experimentally investigates whether risk-averse individuals punish less if the outcome of punishment is uncertain than when it is certain. Our design includes three treatments: Baseline in which the one-shot prisoner’s dilemma game is played; Certain Punishment in which the prisoner’s dilemma game is followed by a punishment stage allowing subjects to decrease the other player’s payoff by 2 Euros; and Uncertain Punishment in which subjects could decrease the other player’s payoff with a 50% probability by 1 Euro and with a 50% probability by 3 Euros. We find that in all cases the risk-averse subjects are equally likely to cooperate in the prisoner’s dilemma and equally likely to punish in the second stage in either of the two punishment treatments.
    Keywords: Experimental economics; prisoner’s dilemma; punishment; risk aversion; uncertainty
    JEL: C70 C91
    Date: 2009–07–25

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