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on History and Philosophy of Economics |
| By: | Marco Mariotti (University of St Andrews); Roberto Veneziani (Queen Mary, University of London) |
| Abstract: | We analyse the liberal ethics of non-interference applied to social choice. Two liberal principles capturing non-interfering views of society, inspired by J.S. Mill's conception of liberty are examined, which capture the idea that society should not penalise agents after changes in their situation that do not affect others. Two paradoxes of liberal approaches are highlighted. First, it is shown that a restricted view of non-interference, as reflected in the Individual Damage Principle, together with some standard axioms in social choice leads straight to welfare egalitarianism. Second, it is proved that every weakly paretian social welfare ordering that satisfies a general principle of noninterference must be dictatorial. Both paradoxes raise important issues for liberal approaches in social choice and political philosophy. |
| Keywords: | Liberalism, Noninterference, Equality, Impossibility |
| JEL: | D63 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp653&r=hpe |
| By: | Hagendorf, Klaus |
| Abstract: | This paper is the first part of a Marxian critique of the theory of the firm, focusing on the analysis of labour values. Starting from Adam Smith's example of the deer hunter marginal analysis is introduced, culminating in the derivation of the Labour Value Function as the supply curve of the competitive firm in terms of labour values. The analysis is based on a new definition of labour value, which is Marxian in spirit and respects explicitly production conditions and by this becomes an integral part of modern mathematical optimization methods not found in Marx. The analysis offers a further development and coherent interpretation of Marx's value theory. The analysis is limited to the case of the competitive firm. |
| Keywords: | Marxian economics; labour theory of value; value theory; marginal analysis; microeconomics; theory of the firm; marginal cost; the labour value function; supply function;Adam Smith; |
| JEL: | B51 D21 D46 B12 A13 B14 D41 B24 |
| Date: | 2009–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18698&r=hpe |
| By: | Roberto Veneziani (Queen Mary, University of London); Naoki Yoshihara (Hitotsubashi University) |
| Abstract: | This paper critically analyses the strongly subjectivist approach to exploitation theory recently proposed by Matsuo ([7]), in the context of general convex economies with heterogeneous agents. It is proved that the Fundamental Marxian Theorem is not preserved in his subjectivist approach, contrary to Matsuo's claims, and that no meaningful subjectivist exploitation index can be constructed. It is argued that a minimal objectivism is necessary in exploitation theory, whereby subjective preferences do not play a direct, definitional role. An alternative objectivist approach is briefly analysed, which is related to the 'New Interpretation' ([1]; [3]). It is argued that it captures the core intuitions of exploitation theory and it provides appropriate indices of individual and aggregate exploitation. Further, it is shown that it preserves the FMT in general economies. |
| Keywords: | Exploitation, Subjective preferences, Fundamental Marxian Theorem, General convex cone economies |
| JEL: | D31 D46 D63 E11 B51 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp654&r=hpe |
| By: | Franco Donzelli (University of Milano) |
| Abstract: | In his economic writings Jevons insists on the allegedly fundamental role played by the so-called "laws of supply and demand" in his theory of exchange; yet no demand-and-supply analysis is actually employed in deriving such theory, as developed in Chapter 4 of The Theory of Political Economy (TPE). This is all the more puzzling in the light of the following two facts: 1) in his 1868 correspondence with Jevons, Fleeming Jenkin provides a complete geometrical solution of the exchange equilibrium problem based on the use of demand and supply curves, but his suggestion is wholly neglected by Jevons in the first edition of TPE (1871); 2) in his 1874 open letter to Jevons, Walras explicitly criticizes his correspondent for his defective treatment of the "laws of supply and demand", suggesting an alternative analytical solution of the exchange problem based on the use of demand and supply functions; yet Jevons entirely disregards Walras's remarks in preparing the second edition of TPE (1879). This paper compares Jevons's, Jenkin's and Walras's approaches to the exchange equilibrium problem, explaining the analytical and epistemological reasons that underlie Jevons's neglect of his correspondents' criticism and advice. |
| Keywords: | Jevons, Jenkin, Walras, equilibrium, disequilibrium, demand and supply, theory of exchange, |
| Date: | 2009–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:bep:unimip:1086&r=hpe |
| By: | John Duffy; Felix Munoz-Garcia (School of Economic Sciences, Washington State University) |
| Abstract: | This paper investigates how the introduction of social preferences affects players’ equilibrium behavior in both one-shot and infinitely repeated versions of the Prisoner’s Dilemma game. We first show that defection survives as the unique equilibrium of the stage game if at least one player is not too concerned about inequity aversion. Second, we demonstrate that in the infinitely repeated version of the game, fairness concerns operate as a “substitute: for time discounting, as fairness helps sustain cooperation for lower discount factors. We then extend our results to more general simultaneous-move games, and more general preferences. Furthermore, we examine how the introduction of incomplete information about players’ social preferences can help in the selection of the efficient cooperative outcome. Finally, we point out the implications of our findings for the design and analysis of experiments involving repeated games. In particular, repeated game equilibria which are thought to be supported by sufficiently large discount factors, may in fact be sustained by a combination of discounting and social preference parameters, an observation that may help rationalize recent experimental findings. |
| Keywords: | Prisoner’s dilemma; Repeated games; Inequity aversion; Time discounting; Time discounting; Social Preferences |
| JEL: | C72 C73 H43 D91 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:munoz-4&r=hpe |
| By: | Swee-Hoon Chuah (Nottingham University Business School) |
| Abstract: | In contrast to current literature which mainly identifies relationships between particular economic behaviours and specific attitudes suggestive of those behaviours, we explore the potential of general human values for explaining economic behaviour. In particular, we investigate whether behaviours observed in binary-choice lotteries, time discounting, public good, ultimatum, dictator and trust game experiments can be explained by Schwartz’s theory of universal human values. We find that the values have explanatory power in relation to strategic, but not parametric, behaviours. We discuss this finding in terms of the sociology of values and suggest that situations involving human interactions provide the most conducive context for the expression of values. We also find that different subsets of the values relate to different strategic behaviours, indicating that there is no redundancy in their explanatory power. |
| Keywords: | Values, behaviour, survey, experiments |
| JEL: | C72 C91 D81 |
| Date: | 2010–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:bbr:workpa:6&r=hpe |
| By: | Nicholas Stern (IG Patel Professor of Economics and Government at the LSE and Chairman of the Grantham Research Institute on Climate Change and the Environment) |
| Abstract: | In the last twenty years economics has created much of lasting value and real potential: it has been a very fertile period. But economics has also suffered from what I shall term „collective amnesia? covering whole areas of public policy. And on policy and the role of government it has, embarrassingly in my view, swayed with the political winds to the detriment of both our profession and to outcomes. Both the amnesia and the political bending have contributed to the economic crisis of the last year or two and to hostility towards the profession. My purpose here is first to lament the amnesia on theories of public policy in imperfect economies, in short the subject of public economics, to describe the bending of public policy analysis to political vogue, and to indicate some of the consequences. I then describe some of the mechanics of the processes described, in terms of choice of models and patterns of teaching. Finally, I use the example of climate change to illustrate some of the consequences of the amnesia, as well as of the political influence. |
| Keywords: | Public Policy, Climate Change |
| JEL: | H |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.106&r=hpe |
| By: | Oswald, Andrew J. (University of Warwick); Proto, Eugenio (University of Warwick); Sgroi, Daniel (University of Warwick) |
| Abstract: | The paper provides evidence that happiness raises productivity. In Experiment 1, a randomized trial is designed. Some subjects have their happiness levels increased, while those in a control group do not. Treated subjects have 12% greater productivity in a paid piece-rate Niederle-Vesterlund task. They alter output but not the per-piece quality of their work. To check the robustness and lasting nature of this kind of effect, a complementary Experiment 2 is designed. In this, major real-world unhappiness shocks – bereavement and family illness – are studied. The findings from (real-life) Experiment 2 match those from (random-assignment) Experiment 1. |
| Keywords: | labor productivity, emotions, well-being, happiness, positive affect, experimental economics |
| JEL: | J24 C91 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4645&r=hpe |
| By: | Waldenström, Daniel (Research Institute of Industrial Economics (IFN)); Di Vaio, Gianfranco (University of Perugia); Weisdorf, Jacob (University of Copenhagen) |
| Abstract: | This study analyses determinants of citation success among authors publishing in economic history journals. Bibliometric features, like article length and number of authors, are positively correlated with the citation rate up to a certain point. Remarkably, publishing in top-ranked journals hardly affects citations. In regard to author-specific characteristics, male authors, full professors and authors working economics or history departments, and authors employed in Anglo-Saxon countries, are more likely to get cited than others. As a ‘shortcut’ to citation success, we find that research diffusion, measured by number of presentations and people mentioned in acknowledgement, boosts the citation rate. |
| Keywords: | Bibliometrics; Citation Analysis; Citation Success; Economic History; Scientometrics; Poisson Regression |
| JEL: | A10 A11 A14 N10 |
| Date: | 2010–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0819&r=hpe |
| By: | Reinoud Joosten |
| Abstract: | We present two new notions of evolutionary stability, the truly evolutionarily stable state (TESS) and the generalized evolutionarily stable equilibrium (GESE). The GESE generalizes the evolutionarily stable equilibrium (ESE) of Joosten [1996]. An ESE attracts all nearby trajectories monotonically, i.e., the Euclidean distance decreasing steadily in time. For a GESE this property should holds for at least one metric. The TESS generalizes the evolutionarily stable strategy (ESS) of Maynard Smith & Price [1973]. A TESS attracts nearby trajectories too, but the behavior of the dynamics nearby must be similar to the behavior of the replicator dynamics near an ESS. Both notions are defned on the dynamics and immediately imply asymptotical stability for the dynamics at hand, i.e., the equilibrium attracts all trajectories sufficiently nearby. We consider this the relevant and conceptually right approach in defining evolutionary equilibria, rather than defining a static equilibrium notion and search for appropriate dynamics guaranteeing its dynamic stability. Moreover, the GESE and the TESS take similar positions as the ESE and ESE do in relation to other equilibrium and fixed point concepts in general. |
| Keywords: | evolutionary stability, evolutionary game theory Length 27 pages |
| JEL: | A12 C62 C72 C73 D83 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2009-16&r=hpe |
| By: | Yoshihara, Naoki; Veneziani, Roberto |
| Abstract: | In subsistence economies with general convex technology and rational optimising agents, a new, axiomatic approach is developed, which allows an explicit analysis of the core positive and normative intuitions behind the concept of exploitation. Three main new axioms, called Labour Exploitation in Subsistence Economies, Relational Exploitation, and Feasibility of Non-Exploitation, are presented and it is proved that they uniquely characterise a definition of exploitation conceptually related to the so-called “New-Interpretation” (Dumenil, 1980; Foley, 1982; Dumenil at el., 2009), which focuses on the unequal distribution of (and control over) social labour, and on individual well-being freedom and the self-realisation of men. Then, the main results of Roemer’s (1982, 1988) classical approach and all the crucial insights of exploitation theory are generalised, proving that every agent’s class and exploitation status emerges in the competitive equilibrium, that there is a correspondence between an agent’s class and exploitation status, and that the existence of exploitation is inherently linked to the existence of positive profits. |
| Keywords: | Justice, Exploitation, Class, Convex Economies |
| JEL: | D63 D51 C62 B51 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ccesdp:23&r=hpe |
| By: | Funk, Matt |
| Abstract: | This paper introduces a game-theoretical framework for The Problem of Sustainable Economic Development, axioms which help clarify the problem itself, and, reductio ad absurdum, falsify many widely-held economic, evolutionary, and ecological principles. This brief communiqué lays the foundation for evolutionary stable economic development and survival strategies – strategies which foster international cooperation, global threat mitigation, food & energy security, long-distance dispersibility, and thus, ultimately, the long-term survival of the human species. |
| Keywords: | sustainable economic development; tragedy of the commons; noncooperative games; natural selection; global threats; food security; national security; human survival |
| JEL: | B40 Q57 C72 |
| Date: | 2009–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19442&r=hpe |
| By: | Shaikh, Salman |
| Abstract: | This paper discusses the ethical void in Capitalism which does not look prominent in welfare societies and states. But, its effects become more eminent in tough economic conditions and more so in developed regions where economic relationships by themselves will not result in win-win situation for all parties concerned in a Capitalist economy. Unbridled pursuit of self interest, moral relativism, inventive-led economic choices and apathy to communal responsibilities would lead to a society where economic interests become the sole basis of maintaining and sustaining relationships. This inner void of identity and purpose at individual level and social void in the form of a stratified society bound together only for economic interests can be better filled with incorporating religion. Humans are much more than utility driven species, they are capable of using both instrumental and critical reasons to differentiate right from wrong and need reinforcement to adopt virtues influenced by an inner urge other than material interests as in Capitalism. This inner urge can be rekindled by looking beyond utility maximization to re-acknowledge the fundamental identity that humans are moral being than just an instrument for material advancement. |
| Keywords: | Interest free economy; Interest free finance; Capitalism; Business Ethics; Islamic Ethics; Morality; Idealism; Moral Relativism. |
| JEL: | Z12 A13 A14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19699&r=hpe |
| By: | McCloskey, Deirdre |
| Abstract: | Trade reshuffles. No wonder, then, that it doesn’t work as an engine of growth—not for explaining the scale of growth that overcame the West and then the Rest 1800 to the present. Yet many historians, such as Walt Rostow or Robert Allen or Joseph Inikori, have put foreign trade at the center of their accounts. Yet the Rest had been vigorously trading in the Indian Ocean long before the Europeans got there—indeed, that’s why the West wanted to get there. Trade certainly set the prices that British industrialists faced, such as the price of wheat or the interest rate. But new trade does not put people to work, unless they start unemployed. If they are, then any source of demand, such as the demand for domestic service, would be as important as the India trade. Foreign trade is not a net gain, but a way of producing importables at the sacrifice of exportables. The Harberger point implies that static gains from trade are small beside the 1500% of growth to be explained, or even the 100% in the first century in Britain. Trade is anyway too old and too widespread to explain a uniquely European—even British—event. One can appeal to “dynamic” effects, but these too can be shown to be small, even in the case of the gigantic British cotton textile industry. And if small causes lead to large consequences, the model is instable, and any old thing can cause it to tip. Ronald Findlay and Kevin O’Rourke favor foreign trade on the argument that power led to plenty. But domination is not the same thing as innovation. In short, the production possibility curve did not move out just a little, as could be explained by trade or investment or reshuffling. It exploded, and requires an economics of discovery, not an economics of routine exchanges of cotton textiles for tea. |
| Keywords: | foreign trade; engines of growth; industrial revolution; economic growth; Britain |
| JEL: | B10 N10 |
| Date: | 2009–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19723&r=hpe |