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on History and Philosophy of Economics |
| By: | Robert J. Shiller (Cowles Foundation, Yale University); Virginia M. Shiller (Child Study Center, Yale University) |
| Abstract: | While leading figures in the early history of economics conceived of it as inseparable from philosophy and other humanities, there has been movement, especially in recent decades, towards its becoming an essentially technical field with narrowly specialized areas of inquiry. Certainly, specialization has allowed for great progress in economic science. However, recent events surrounding the financial crisis support the arguments of some that economics needs to develop forums for interdisciplinary interaction and to aspire to broader vision. |
| Keywords: | Economic methodology, Specialization, Behavioral economics, Psychology, Rational expectations, Economics as a moral science, Pareto criterion, Interdisciplinary, Journal of Economic Perspectives |
| JEL: | B4 B41 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1788&r=hpe |
| By: | Schilirò, Daniele |
| Abstract: | The essay analyzes the decision process in economics and its relationship with the concept of rationality starting from the theory of rational choice, that is, a systemic approach based on the formal axiomatic method applied mainly in the microeconomic field, which has become the heart of neoclassical economics. The work also focuses on the important contribution of the cognitive economics to the concept of rationality and, consequently, of criticism that this theoretical approach moves to the standard economic theory in the definition of choices, indicating a systematic discrepancy between theory and empirical evidence. Moreover, the analysis puts forward the topic of rational expectations, as the rationality of expectations concerns the preferences, and also because the hypothesis of rational expectations has characterized the development of modern macroeconomics and influenced the issue of the efficient use of information by the economic agents. This work wants to highlight, using a very little formal language, the complexity of the choice process and the unsolved relationship between economic and psychological dimensions of such a process, but at the same time it wants to argue that the economic theory as a whole is far away today from an abstract conception perfectly rational and fully informed individuals which choose without making mistakes. |
| Keywords: | decisione; razionalità; incertezza; aspettative |
| JEL: | D84 D01 |
| Date: | 2011–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29477&r=hpe |
| By: | Hasan, Zubair |
| Abstract: | This paper clarifies some misinterpretations of three foundational concepts in mainstream economics from Islamic viewpoint. These are scarcity of resources, pursuit of self-interest and maximizing behavior of economic agents. It argues that stocks of resources that God has provided are inexhaustible. But important is the availability of resources out of stocks to mankind. Availability is a function of human effort and the state of knowledge about resources over time and space. In that sense resources are scarce in relation to multiplicity of human wants for Islamic economics as well. Self-interest must be distinguished from selfishness. The motive operates on both ends of human existence: mundane and spiritual. Its pursuit does not preclude altruism from human life. Counter interests keep balance in society and promote civility. Islam recognizes the motive as valid. Maximization relates to quantifiable ex ante variables. Uncertainty of future outcomes of actions makes maximization a heuristic but useful analytical tool. The concept is value neutral. What is maximized, how and to what end alone give rise to moral issues. Modified in the light of Shari’ah requirements the three concepts can provide a firmer definition for Islamic economics centered on the notion of falah. |
| Keywords: | Scarcity; self-interest; maximization; Islamic Economics; israf; Shri'ah; heuristics |
| JEL: | B10 A22 B21 B13 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29414&r=hpe |
| By: | Rowena Pecchenino (Department of Economics Finance and Accounting, National University of Ireland, Maynooth); |
| Abstract: | Hope plays an important role in all individuals’ lives both today and in the future. While hope and hopelessness are important concepts and the subjects of much theorizing in psychology, theology, philosophy, political science, nursing, as well as in literature and the arts, it is absent from economics. This silence on hope is notable since hope is fundamentally at the centre of choice, especially intertemporal choice, which is at the centre of economic analysis. To place hope at the centre of intertemporal choice, it is important to clearly define what hope is and what it is not. What hope is not is constant. Hope is not optimism; hope is not unfounded dreams divorced from reality; hope is not irrational. I distil what hope is from its characterization in a number of different disciplines. A comparison of characterizations identifies a number of commonalities and common definitions. Using the derived set of definitions, I incorporate hope into economic analysis, consider what implications hope has for the modelling of choice and for economic behaviour, and discuss whether hope is implicitly imbedded in or has been abandoned, to our eternal cost, by economics. |
| Keywords: | Hope, rational choice, goal orientation, expectations, faith |
| JEL: | B40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n217-11.pdf&r=hpe |
| By: | Aadland, David; Shaffer, Sherrill |
| Abstract: | Economists have generally ignored the notion that perceived time may differ from clock time. Borrowing from the behavioral psychology literature, we investigate the case of time compression whereby perceived time passes more quickly than actual time. A framework is presented to embed time compression in economic models. We then apply the principle to a standard lifecycle permanent income model with endogenous labor. Time compression provides an alternative explanation of why older individuals, even those without declining labor productivity, may choose to reduce their work effort. |
| Keywords: | Time Compression; Discounting; Lifecycle Permanent Income Model; Retirement |
| JEL: | D91 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29298&r=hpe |
| By: | Mohieddine Rahmouni (GREThA, CNRS, UMR 5113); Murat Yildizoglu (GREQAM, CNRS, UMR 6579) |
| Abstract: | The aim of this paper is to present the theoretical literature dedicated to the analysis of the motivations and the determinants of firms\' technological innovations. To this end, we follow a strategy of presentation that starts with the simplest possible framework in which the innovation can occur (Robinson Crusoe economy), and that encompasses gradually richer economic contexts. The discussion is hence organized in a progressive logic, ranging from purely individual motivations and conditions of innovations (in the case of Robinson, alone on his island), towards the more complex case where the innovative activities take place in an international framework, under particular institutional configurations, depending on the considered countries. The intermediate stages successively introduce the following economic phenomena: demand, sectoral dimensions, competition, public authorities, and finally, international competition. |
| Keywords: | Technological innovation, Industrial economics, Evolutionary economics |
| JEL: | O12 O30 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-10&r=hpe |
| By: | Stenberg, Anders (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | The classical twin model has often been used to determine whether variation in outcomes such IQ, schooling and other behavioral traits, originate from genetic endowments or environmental factors. Despite some heavy criticism from prominent scholars, the model has recently reappeared in highly ranked economics journals to perhaps spark off a revival of the method. This article seeks to specify the assumptions which generate the apparently profound divide in viewpoints. A general problem is that most authors do not properly discuss the underlying assumptions of the twin model. It has partly led to a disarray of thoughts, concrete examples are provided, since the interpretation of the results and the risk for misleading interpretations are not spelled out. Therefore, perhaps surprisingly, a brief account of the theories behind the main assumptions of the twin model provides a useful contribution. |
| Keywords: | genes; environments |
| JEL: | H50 J62 |
| Date: | 2011–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2011_004&r=hpe |
| By: | Aadland, David; Finnoff, David; Huang, Kevin X.D. |
| Abstract: | In this paper, we investigate the nature of rational expectations equilibria for economic epidemiological models. Unlike mathematical epidemiological models, economic epidemiological models can produce regions of indeterminacy or instability around the endemic steady state. We consider SI, SIS, SIR and SIRS versions of economic compartmental models and show how well-intentioned public policy may contribute to disease instability and uncertainty. |
| Keywords: | economic epidemiology; equilibria; dynamics; disease; indeterminacy; rational expectations |
| JEL: | D1 I1 |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29299&r=hpe |
| By: | Carfì, David; Ricciardello, Angela |
| Abstract: | In this paper we define the canonical mixed extension of a decision form game. We motivate the necessity to introduce this concept and we show several examples about the new concept. In particular we focus our study upon the mixed equilibria of a finite decision form game. Many devel- opments appear possible for applications to economics, physics, medicine and biology in those cases for which the systems involved do not have natural utility functions but are only capable to react versus the external actions. |
| Keywords: | Decision form game; mixed extension. |
| JEL: | C79 C02 C7 C73 C72 |
| Date: | 2011–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28971&r=hpe |
| By: | Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Rudolf Berghammer (Computer-Aided Program Development - Institute of Computer Science - Christian-Albrechts-Universität zu Kiel); Harrie De Swart (Faculteit Wijsbegeerte-Logica en taalanalyse - Universiteit van Tilburg); Stefan Bolus (Computer-Aided Program Development - Institute of Computer Science - Christian-Albrechts-Universität zu Kiel) |
| Abstract: | Simple games are a powerful tool to analyze decision - making and coalition formation in social and political life. In this paper, we present relation-algebraic models of simple games and develop relational specifications for solving some basic problems of them. In particular, we test certain fundamental properties of simple games and compute specific players and coalitions. We also apply relation algebra to determine power indices. This leads to relation-algebraic specifications, which can be evaluated with the help of the BDD-based tool RelView after a simple translation into the tool's programming language. In order to demonstrate the visualization facilities of RelView, we consider an example of the Catalonian Parliament after the 2003 election. |
| Keywords: | Relation algebra ; RelView ; simple game ; winning coalition ; swinger ; dominant player ; central player ; power index |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00574767&r=hpe |
| By: | Schilizzi, Steven |
| Abstract: | Distributional equity concerns are often at least as important as economic efficiency and ecological sustainability in environmental and natural resource management policies. Until recently, however, economists have shied away from tackling equity issues, primarily because equity appeared as a slippery concept, varying across people and circumstances. This study takes this context-dependence of equity judgments as a starting point and shows that such dependence, far from being random, is systematic. A series of controlled laboratory treatments with University students were designed to investigate the role on distributional equity judgments of such context factors as knowledge of oneâs position in society, how the existence of equity-efficiency tradeoffs can affect equity judgments, and the importance of material incentives compared with hypothetical situations, where âin principleâ judgments are called for. Key results include the relative discriminating power of context factors, the hierarchy of context-dependence, the dissymmetry between support and opposition to equity principles, and the impact of different wealth endowments on equity judgments. A number of common beliefs are found not to be substantiated by our experimental findings. |
| Keywords: | Equity, fairness, resource allocation, environmental policy, experimental economics, welfare economics, public choice, Institutional and Behavioral Economics, Public Economics, C92, D03, D63, H23, Q56, Q58, |
| Date: | 2011–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwauwp:100887&r=hpe |
| By: | Hervé Dumez (CRG - Centre de recherche en gestion - CNRS : UMR7655 - Polytechnique - X) |
| Abstract: | Les recherches qualitatives se veulent souvent exploratoires : elles entendent inventer des concepts, proposer de nouvelles notions et théories. Dans le même temps, pour interpréter les données, elles manient des concepts existants. Mais bien souvent, les notions utilisées ou proposées apparaissent floues, mal définies, n‟éclairant rien parce qu‟éclairant trop de choses. La question surgit donc : qu'est-ce qu'un concept ? En quoi les ressources, la cognition distribuée, les capacités dynamiques, les two-sided markets, la co-innovation, les acteurs-tiers, l'apprentissage organisationnel, les coûts de transaction peuvent-ils être appelés concepts ? La question est concrète : les notions que nous manions dans une recherche sont-elles susceptibles d'expliquer les phénomènes que cette recherche se propose d'expliquer, ou en quoi ne sont-elles que des étiquettes mises sur les phénomènes et ne constituent-elles que des pseudo-explications ? Le texte qui suit vise à rester à ce niveau concret, en évitant les débats épistémologiques abstraits sur la nature de l'explication scientifique. Il entend donner au chercheur, apprenti ou confirmé, des éléments de réflexion sur sa pratique et l'aider à mener un travail critique et positif sur sa démarche. Une première approche du concept à partir d‟une représentation simple sera présentée. Puis un approfondissement de la démarche à partir de huit critères proposés par Gerring. Dans une troisième partie, en s'inspirant de Wittgenstein, on se demandera s'il n‟est pas possible de penser sans concept ou en dehors des concepts. |
| Keywords: | Recherche qualitative; concept; dénomination; compréhension; extension; Ludwig Wittgenstein; John Gerring |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00574166&r=hpe |
| By: | Hervé Dumez (CRG - Centre de recherche en gestion - CNRS : UMR7655 - Polytechnique - X) |
| Abstract: | Marie-José Avenier (CERAG, Grenoble) réagit sur les questions épistémologiques soulevées dans le précédent numéro en défendant le paradigme constructiviste. Pour elle, il s'agit bien d'un paradigme même si elle distingue différents types de constructivisme, fondé sur des hypothèses concernant l'origine de la connaissance. Une réponse est faite à sa critique, notamment sur cette notion de paradigme et ses fondements. |
| Keywords: | paradigme épistémologique; positivisme; interprétativisme; constructivisme; recherche qualitative; |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00574147&r=hpe |
| By: | Palley, Thomas; SHAIKH, ANWAR M; Madrick, Jeff |
| Abstract: | Thomas Palley argues that the causes of the “Great Recession†are not primarily to be found in the asset bubble that was allowed to inflate in the housing market and in the financial sector. The bubbles actually reflect the longer-term basis for stagnation that originate in the macro-economic structure of the US. He presents two major dimensions of these structural problems. The first problem is the entrenchment of a “neoliberal†growth model that is hegemonic in the minds of politicians and the economics establishment that became orthodoxy in the 1980s. He then considers the second obstacle to creating a virtuous circle of demand and full employment. Secondly, Palley finds that the US model of economic engagement with the world’s other economies is flawed. He ends his presentation with an alternative policy recommendation that inverts the power of corporations in favor of workers. Crisis is an inherent, inevitable, feature of capitalism in the findings of Anwar Shaikh. He demonstrates this historically by outlining its recurrence from at least two centuries of experience. Moreover, the crises are not limited to just one nation but are system-wide events. The current recession rises out of the generalized leveling off of the profit rate in the early 1980s that was achieved by driving down wages but increasing productivity. Moreover, the cost of capital has been historically low and, thus, particularly important for fueling financial bubbles. He concludes that there is little reason to believe that wages might be able to return to a greater balance with productivity growth given the power of capitalists and the growing army of reserve labor. Jeff Marick trains his lens on the corruption of Wall Street and the lack of governmental regulation of the financial sector as the two most important causes of the Great Recession. The incentives for Wall Street were at odds with a self-sustaining economy. Short-term gains, huge bonuses and gaming the sector were given priority over fiducially prudent decisions for the long-term health of financial institutions and the economy as a whole. These incentives grew out of deregulation beginning with the Reagan administration, a lack of micro-economic analysis stemming from a Grenspanian ideology of banker probity, and mass delusion that economy would continue to churn along. Madrick points to recurrent market failures from the fall of junk bond kings, to the Savings and Loans collapses, to recurrent crisis in the 1990s and the blowout of the high-tech bubble at the century’s turn. Despite these warnings, the government refused to be diligent and allowed for ever-greater financial chicanery to be built with the goal of enriching corporate executives at the expense of the rest of the economy. |
| Date: | 2011–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:issres:1869473&r=hpe |