nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2010‒11‒13
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. La teoria economica del fattore imprenditoriale. Note a margine di alcune letture suggerite - The economic theory of the entrepreneurial factor. Notes on a small reading list By Massimo Florio
  2. Ecological, Heterodox and Neoclassical Economics: Investigating the Differences By Spash, Clive L.; Ryan, Anthony M.
  3. The Puzzle of Social Preferences By Jordi Brandts; Enrique Fatas
  4. Combining the contributions of behavioral economics and other social sciences in understanding taxation and tax reform By James, Simon
  5. What’s wrong with the world? Rationality! A critique of economic anthropology in the spirit of Jean Gebser By Pogany, Peter
  6. There Will Be Money By Luis Araujo; Bernardo Guimaraes
  7. Measuring Economic Insecurity and Vulerability as Part of Economic Well-Being: Concepts and Context By Lars Osberg
  8. Development of the overconfidence measurement instrument for the economic experiment By Michailova, Julija
  9. Climate Change and Game Theory By Wood, Peter John
  10. Legitimate Punishment, Feedback, and the Enforcement of Cooperation By Marco Faillo; Daniela Grieco; Luca Zarri
  11. Emotional Prosperity and the Stiglitz Commission By Oswald, Andrew J

  1. By: Massimo Florio (DEAS, Universit di Milano)
    Abstract: This note discusses some contributions and ideas on the role of entrepreneurs in Economics, from Adam Smith to the Austrian tradition. The paper observes that there are different forms of entrepreneurship and that realism is needed to understand the social availability of entrepreneurship across types of organisations.
    Keywords: Entrepreneurship, Firms’s Size, History of Economic Ideas
    JEL: L26 L25 B00
    Date: 2010–06–30
  2. By: Spash, Clive L.; Ryan, Anthony M.
    Abstract: How heterodox are ecological economists and how ecological are heterodox economists? How do both differ, if at all, from neoclassical economists when addressing environmental problems? In 2009 we probed such questions by conducting an international survey at economic conferences on the environment and sustainability. This paper reports on surveys conducted at conferences of the European Society for Ecological Economics, the European Association of Environmental and Resource Economics, and the Association of Heterodox Economists. A key aim was to gain insight into the extent to which ecological economics can be described as a distinct field of research from orthodox environmental and resource economics. Conflict within the field has meant a prevalence of neoclassical articles and thought mixed in amongst more heterodox work. The question then arises are those participating in ecological economics ideologically and methodologically similar to those schools of thought falling under the heterodox economic umbrella or the orthodox? In addressing this question problems are identified with economic understanding of environmental problems and the lack of communication across schools and disciplines. Suggestions are made as to how we might, as a community of concerned scholars and activists, move forward.
    Keywords: Ecological economics; heterodox; neoclassical; methodology; ideology
    JEL: B40 Q0 B59
    Date: 2010–10–29
  3. By: Jordi Brandts (Universitat Autònoma de Barcelona and Instituto de Análisis Económico (CSIC)); Enrique Fatas (Universidad de València)
    Abstract: We present a brief overview of the experimental economics literature on social preferences. In numerous experiments, economically incentivized subjects are willing to sacrifice part of their material earnings to compensate the kind behavior of others, or will be willing to reciprocate at a non-negligible cost, or even pay a positive price for punishing the behavior of selfish individuals. All these actions are labeled as social in economics because there is no apparent way to reconcile them with any reasonable form of pure self-interest. We focus on social dilemma games and want to communicate two main messages. First, research in experimental economics has produced abundant evidence that illustrates the social components of people’s preferences. Second, social sanctions of different types play an important role in facilitating cooperative behavior.
    Date: 2010–10–01
  4. By: James, Simon
    Abstract: This paper extends previous work presented at the SABE/IAREP conference at St Mary’s University, Halifax (James, 2009). In the earlier paper it was shown that conventional economic theory is used to make the case for tax reform but does not always adequately incorporate all the relevant factors. However, an approach based on behavioral economics can make the difference between success and failure. In this paper the contributions of other social sciences are also included. Taxation is a particularly appropriate subject to explore the integration of the social sciences since they have all devoted considerable attention to it. It can be seen that different social sciences suggest a range of variables that might be taken into account in addition to those included in mainstream economics. Other social sciences also offer different methodological approaches and consider the possibility of different outcomes of the fiscal process. The paper concludes that it is not easy to integrate the social sciences in a single approach to the study of tax and tax policy. There may also be the risk of encouraging inappropriate integration - researchers operating outside their expertise can produce results that are not helpful. However, comparing the contribution of behavioral economics with those of the social sciences more generally, it can be seen that behavioral economics can offer a framework within which these areas can be examined. Indeed, it may be a useful channel to add the contributions of other social sciences to mainstream economic research.
    Keywords: behavioral economics; social sciences; taxation; tax reform
    JEL: H20 H30 H71 H3
    Date: 2010–08
  5. By: Pogany, Peter
    Abstract: Jean Gebser (1905-1973) was a multidisciplinary thinker whose ideas about human consciousness and the future inspire the following five vantage points for the heterodox critique of contemporary economic anthropology: (1) Characteristic attributes of consciousness and those of the environment surrounding the individual are equivalent, eliminating the possibility of single-minded, seamless, rational control, especially during macrohistoric phase transitions; (2) Diaphaneity as a mode of deep and comprehensive understanding (an approach that excludes latching on to any selectively focused explanation) will be needed to deal effectively with emerging global resource and environmental problems; (3) Costs in the form of irreversibly accumulating inaccessible energy shadows our evolving civilization, which our cultural conditioning portrays as pure progress; (4) Rationality, as the most laudable motivation for individuals, business firms and nations, has led to an unfounded techno-fetish; and, for various reasons, it fuels accelerated movement toward collective self-destruction; (5) Signs of chaos (not the harmless and controllable kind found in standard economic literature) corroborate the notion that we have entered a new period of macrohistoric phase transition as interpreted by the thermodynamic comprehension of universal history.
    Keywords: Jean Gebser;global economy;universal history;resource constraints;entropy law;bifurcation;chaos theory;
    JEL: N01 P00 Z10 P51 B29 Q01 Z13
    Date: 2010–11–05
  6. By: Luis Araujo; Bernardo Guimaraes
    Abstract: A common belief among monetary theorists is that monetary equilibria are tenuous due to theintrinsic uselessness of fiat money (Wallace (1978)). In this article we argue that thetenuousness of monetary equilibria vanishes as soon as one introduces a small perturbation inan otherwise standard random matching model of money. Precisely, we show that the sheerbelief that fiat money may become intrinsically useful, even if only in an almost unreachablestate, might be enough to rule out nonmonetary equilibria. In a large region of parameters,agents' beliefs and behavior are completely determined by fundamentals.
    Keywords: Fiat money, autarky, equilibrium selection
    JEL: E40 D83
    Date: 2010–09
  7. By: Lars Osberg (Department of Economics, Dalhousie University)
    Keywords: economic insecurity; vulnerability; economic well-being; economic security; social protection; welfare state
    Date: 2010–11–04
  8. By: Michailova, Julija
    Abstract: In this article results of the two experiments, aimed at the development of the instrument (test) that would enable construction of the comprehensive measure of individual overconfidence for the use in economic overconfidence experiments, are presented. Instrument was obtained in a two-stage procedure. In the first experimental phase, a pilot test, consisting of fifty general-knowledge questions of the unknown difficulty, was conducted to divide the items into three difficulty levels: hard, average-difficulty and easy questions. The second phase was aimed at verification of the replicability of results. Statistical tests supported the existence of the hard-easy effect, verified the success of categorization of questions into three levels of difficulty, and showed that gender was not associated with overconfidence in the developed instrument. The average group overconfidence measures obtained from both experimental phases did not differ from each other significantly. Instrument’s internal consistency was found to be good and acceptable for the use in social research. Compared to the tests used in the foregoing economic experiments, the obtained test is believed to result in the improvement of the overconfidence measurement quality.
    Keywords: overconfidence; instrument development; experiment.
    JEL: C43 C99 C42 C80
    Date: 2010
  9. By: Wood, Peter John
    Abstract: This survey paper examines the problem of achieving global cooperation to reduce greenhouse gas emissions. Contributions to this problem are reviewed from non-cooperative game theory, cooperative game theory, and implementation theory. Solutions to games where players have a continuous choice about how much to pollute, games where players make decisions about treaty participation, and games where players make decisions about treaty ratication, are examined. The implications of linking cooperation on climate change with cooperation on other issues, such as trade, is examined. Cooperative and non-cooperative approaches to coalition formation are investigated in order to examine the behaviour of coalitions cooperating on climate change. One way to achieve cooperation is to design a game, known as a mechanism, whose equilibrium corresponds to an optimal outcome. This paper examines some mechanisms that are based on conditional commitments, and could lead to substantial cooperation.
    Keywords: Climate change negotiations, game theory, implementation theory, coalition formation, subgame perfect equilibrium, Environmental Economics and Policy,
    Date: 2010–05
  10. By: Marco Faillo (Department of Economics, University of Trento); Daniela Grieco (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona))
    Abstract: In the framework of a finitely repeated public goods game with costly punishment options, we introduce a novel restrictive setup where a principle of legitimacy holds, in the sense that only virtuous behavior (that is, being a high contributor) allows one to gain access to sanctioning opportunities (‘entitlement’) and only wrongful behavior (that is, being a low contributor) makes one a potential target of peer punishment (‘desert’). As a consequence, acting virtuously guarantees that it will not be possible to be punished by less virtuous subjects (‘immunity’). These restrictions, by allowing for ‘legitimate punishment’ only, rule out by construction so called antisocial punishment as well as vengeful behavior. Moreover, we manipulate the amount of information over others’ contributions that subjects receive before making their punishment decisions. Our preliminary results show that restrictions lead to an increase of cooperation levels and virtuous restrictions combined with detailed feedback on peers’ contribution significantly increase contribution levels and make cooperation sustainable over time.
    Keywords: Experimental Economics, Public Good Games, Costly Punishment, Cooperation, Legitimacy, Immunity
    JEL: C72 C91 C92 D23 D72
    Date: 2010–11
  11. By: Oswald, Andrew J (Warwick Business School, University of Warwick)
    Abstract: This paper argues -- in line with the proposals of the recent Stiglitz Commission on the Measurement of Economic Performance and Social Progress -- that we should now be measuring a nation’s emotional prosperity rather than its economic prosperity (that is, we ought to focus on the level of mental well-being not the number of pounds in people’s bank accounts). The paper reviews recent ideas in this field. It also describes seven recent studies that, worryingly, suggest that emotional prosperity may be declining through time. For labour-market specialists, a key question for future research is how much this downward trend can be traced back to increased pressures in working life. That question currently remains open.
    Keywords: Well-being ; biomarkers ; GHQ ; happiness ; Easterlin paradox JEL Classification: I1 ; I3
    Date: 2010

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