nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒10‒03
six papers chosen by
Erik Thomson
University of Manitoba

  1. A neurolinguistic approach to performativity in economics By Herrmann-Pillath, Carsten
  2. Entrepreneurship, Evolution and Geography By Erik Stam
  3. Do People Plan? By John Bone; John D Hey; John Suckling
  4. 'Services' in Marxian Economic Thought By Tregenna, F.
  5. The Capability Approach and the Politics of a Social Conception of Wellbeing By Deneulin, Severine; McGregor, James A
  6. The Sources of Happiness: Evidence from the Investment Game By Leonardo Becchetti; Giacomo degli Antoni

  1. By: Herrmann-Pillath, Carsten
    Abstract: In recent sociological studies of markets, especially financial markets, researchers have argued that economics is performative (MacKenzie, Callon et al.). By this they refer to the observation that theories such as the Black-Scholes formula do not simply describe reality, but contributed to the regulatory creation of financial markets in which the agents started to adopt behavioral patterns that correspond to the theory, also relying on artefacts that have been created by the originators of the theory. This notion of performativity fits also other recent uses of language theory in economics, such as the theory of organizational forms in organizational ecology (Carroll and Hannan) or John Searle's theory of institutions. The paper builds on this, especially Searle's approach, and explores the underlying cognitive operations. It is argued that performativity builds on the human capacity to generate new meanings from existing concepts. This is elaborated in the theory of conceptual blending that has been developed by Fauconnier and Turner. For example, blends are a typical phenomenon in the emergence of new business models, such as in the dotcom bubble. The theory of conceptual blending can be based on neuroscientific insights into the operations of the human brain, corresponding to Searle's proposal to ground institutions in neurophysiological dispositions.
    Keywords: Searle's theory of institutions,financial markets,emergence of novelty,conceptual blending,neural theory of metaphor
    JEL: B41 D02 D87
    Date: 2009
  2. By: Erik Stam
    Abstract: This chapter is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The chapter concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography.
    Keywords: entrepreneurship, evolution, geography
    JEL: R0 M13 R11
    Date: 2009–09
  3. By: John Bone; John D Hey; John Suckling
    Abstract: We report the results of an experimental investigation of a key axiom of economic theories of dynamic decision making – namely, that agents plan. Inferences from previous investigations have been confounded with issues concerning the preference functionals of the agents. Here, we present an innovative experimental design which is driven purely by dominance- if preferences satisfy dominance, we can infer whether subjects are planning or not. We implement three sets of experiments: the first two (the Individual Treatments) in which the same player takes decisions both in the present and the future; and the third (the Pairs Treatment) in which different players take decisions at different times. The two Individual treatments differed in that, in one, the subjects played sequentially, while, in the other, the subjects had to pre-commit to their future move. In all contexts, according to economic theory, the players in the present should anticipate the decision of the player in the future. We find that over half the participants in all three experimental treatments do not appear to be planning ahead; moreover, their ability to plan ahead does not improve with experience, except possibly when we force subjects to pre-commit to their future decision. These findings identify an important lacuna in economic theories, both for individual behaviour and for behaviour in games.
    Date: 2007–11
  4. By: Tregenna, F.
    Abstract: The services sector has grown as a share of GDP and employment in most countries in recent years, and there has been increasing interest in understanding this sector and in its growth potential. This article analyses the meaning and nature of the 'services sector' from a Marxian perspective. Marx did not analyse 'services' as such (although he did discuss certain types of activities that are currently classified as services), and 'sectors' are not the units of his economic analysis. From a Marxian approach, an activity needs to be analysed in terms of its location in the circuit of capital and its relationship with the production of surplus-value. The 'services sector' includes activities which are highly heterogeneous in these terms, including activities in which surplus-value is directly produced, activities which facilitate the production of surplus-value elsewhere (or increase the rate at which it is produced), and activities that stand outside of the circuit of capital. Marxian tools of analysis yield particular insights into the nature of various types of service activities, which is helpful in understanding sectoral structure and the potential implications of changes therein.
    Keywords: Marx, services, circulation, surplus-value, sectors, commodities
    JEL: B14 B31 B51 L80
    Date: 2009–09–24
  5. By: Deneulin, Severine; McGregor, James A
    Abstract: The paper discusses the potential and pitfalls of Sen's capability approach. It discusses areas where the capability approach has made a significant contribution to the social sciences. However, the paper argues that the approach fails to thke into account the social construction of meaning. It is these social meanings which gives us a basis from which we know what we value and judge how satisfied we feel about what we are able to achieve. From this viewpoint a person's state of wellbeing (or illbeing) is socially and psychologically co-constituted in specific social and cultural contexts. This entrails that the reality of trade-offs between competing conceptions of wellbeing has to be confronted, and that therefore such social conception of wellbeing is also profoundly political.
    Keywords: capability approach; social wellbeing; reasoning; conflict
    JEL: H1
    Date: 2009–02
  6. By: Leonardo Becchetti (University of Rome Tor Vergata); Giacomo degli Antoni (University of Milan - Bicocca)
    Abstract: The present paper draws on data collected in an investment game plus a questionnaire to investigate whether happiness is affected by circumstances and/or outcomes of the game and to evaluate which motivations or preference structures (self-interested preferences, inequity aversion, altruism, warm glow, social-welfare preferences, trust or reciprocity) may explain such effect. Our result shows that the amount sent has significant and positive effect on trustors’ self-declared happiness. We interpret this finding by arguing that the happiness effect can be explained by the enactment of the “generating” (social welfare enhancing) power of the trustor’s decision. Characteristics of the investment game are such that the trustor has a value creating while the trustee only a redistributive power. This difference may explain why only trustors and not trustees are significantly and positively affected by their giving decision.
    Keywords: Happiness, Investment Game, Social-welfare Preferences
    JEL: C91 D63 A13
    Date: 2009–09

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