nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2011‒05‒30
nine papers chosen by
Erik Thomson
University of Manitoba

  1. Rhetoric and Conceptual Problems in Economics: the Case of General Equilibrium Theory By Michele Gori; Vinicio Guidi
  2. Die Rezeption der John Maynard Keynes Manuskripte von 1904 bis 1911. Anregungen für die deutschsprachige Diskussion By Muchlinski, Elke
  3. Time for behavioral political economy? An analysis of articles in behavioral economics By Berggren, Niclas
  4. The impact of the termination rule on cooperation in a prisoner's dilemma experiment By Normann, Hans-Theo; Wallace, Brian
  5. On the notion of ecological justice By Stefanie Glotzbach
  6. Moral Impossibility in the Petersburg Paradox : A Literature Survey and Experimental Evidence By Tibor Neugebauer
  7. Friedman's monetary economics in practice By Edward Nelson
  8. Imagined futures. Fictionality in economic action By Beckert, Jens
  9. L'importance des langues et des mots dans la comparaison : traduction et controverses By Jean-Claude Barbier

  1. By: Michele Gori (Dipartimento di Matematica per le Decisioni); Vinicio Guidi (Dipartimento Scienze Economiche)
    Abstract: The rhetorical perspective of science claims that scientific truths are what scientists agree is true on the basis of intellectual standards socially determined by the scientific tradition. According to that perspective, models are just rhetorical arguments used by economists in order to affect beliefs of the reference scientific community. Then, looking at the economic practice, we undertake a preliminary analysis of the criteria used by economists to assess and compare economic models. In particular, we argue that economists attach a great importance to the capability of models to solve problems of conceptual type. That allows to better understand how important is the role that general equilibrium theory has had and still has in economics and to rebut some criticisms made to the theory.
    Keywords: scientific rhetoric, general equilibrium theory, economic models
    JEL: A12 B41 D50
    Date: 2011
  2. By: Muchlinski, Elke
    Abstract: This paper provides textual evidence of Keynes's writing and composing on issues which are linked to philosophy, moral science and economics. As a philosopher Keynes was concerned with contemporary discussion on knowledge, probability, judgment and methods of reasoning. He participated in the Bloomsbury Group. He developed a distinct view on ethics, egoism, individual and conventional judgment, animal spirits and responsibility. He denied that expectations can be reduced to mathematical calculation. He developed ways to theorize about uncertainty, confidence and the future. The project Keynes as a philosopher is of great importance in English-and French-speaking discourses. Unfortunately it has not been received and recognized in German discourses. --
    Keywords: philosophy,ethics,theory of probability,theory of knowledge,animal spirits,Bloomsbury Group,uncertainty versus risk,economic methodology and language
    Date: 2011
  3. By: Berggren, Niclas (The Ratio Institute)
    Abstract: This study analyzes leading research in behavioral economics to see whether it contains advocacy of paternalism and whether it addresses the potential cognitive limitations and biases of the policymakers who are going to implement paternalist policies. The findings reveal that 20.7% of the studied articles in behavioral economics propose paternalist policy action and that 95.5% of these do not contain any analysis of the cognitive ability of policymakers. This suggests that behavioral political economy, in which the analytical tools of behavioral economics are applied to political decision-makers as well, would offer a useful extension of the research program.
    Keywords: Behavioral economics; Anomalies; Rationality; Homo economicus; Public choice
    JEL: D78
    Date: 2011–05–19
  4. By: Normann, Hans-Theo; Wallace, Brian
    Abstract: Cooperation in prisoner's dilemma games can usually be sustained only if the game has an infinite horizon. We analyze to what extent the theoretically crucial distinction of finite vs. infinite-horizon games is reflected in the outcomes of a prisoner's dilemma experiment. We compare three different experimental termination rules in four treatments: a known finite end, an unknown end, and two variants with a random termination rule (with a high and with a low continuation probability, where cooperation can occur in a subgame-perfect equilibrium only with the high probability). We find that the termination rules do not significantly affect average cooperation rates. Specifically, employing a random termination rule does not cause significantly more cooperation compared to a known finite horizon, and the continuation probability does not significantly affect average cooperation rates either. However, the termination rules may influence cooperation over time and end-game behavior. Further, the (expected) length of the game significantly increases cooperation rates. The results suggest that subjects may need at least some learning opportunities (like repetitions of the supergame) before significant backward induction arguments in finitely repeated game have force. --
    Keywords: Prisoner's dilemma,Repeated games,Infinite-horizon games,Experimental economics
    JEL: C72 C92 D21 D43
    Date: 2011
  5. By: Stefanie Glotzbach (Sustainability Economics Group, Leuphana University of Lüneburg, Germany)
    Abstract: The increasing loss of ecosystem services severely affects life perspectives of today’s poor and future persons. Thus, governing the use of ecosystem services in an intragenerational and intergenerational just way is an urgent issue. I develop a conception of ecological justice that establishes the specific link between justice and ecosystem services, and argue that specific demands on a conception of ecological justice follow from determining ecosystem services as objects of justice. Showing that Rawls’ “A Theory of Justice” (1971) can consistently meet the identified demands, I verify that it is an appropriate theory for deriving a conception of ecological justice.
    Keywords: ecological justice, ecosystem services, global justice, intergenerational justice, environmental ethics.
    JEL: Q56 Q57 Q19
    Date: 2011–05
  6. By: Tibor Neugebauer (Luxembourg School of Finance, University of Luxembourg)
    Abstract: The Petersburg paradox has led to much thought for three centuries. This paper describes the paradox, discusses its resolutions advanced in the literature while alluding to the historical context, and presents experimental data. In particular, Bernoulli’s search for the level of moral impossibility in the Petersburg problem is stressed; beyond this level small probabilities are considered too unlikely to be relevant for judgment and decision making. In the experiment, the level of moral impossibility is elicited through variations of the gamble-length in the Petersburg gamble. Bernoulli’s conjecture that people neglect small probability events is supported by a statistical power analysis.
    Keywords: Petersburg paradox; economic history; bounded rationality; significance level; experimental economics
    JEL: B3 C44 C9 D8 G1 N0
    Date: 2010
  7. By: Edward Nelson
    Abstract: This paper views the policy response to the recent financial crisis from the perspective of Milton Friedman's monetary economics. Five major aspects of the policy response are: 1) discount window lending has been provided broadly to the financial system, at rates low relative to the market rates prevailing pre-crisis; 2) the Federal Reserve's holdings of government securities have been adjusted with the aim of putting downward pressure on the path of several important interest rates relative to the path of short-term rates; 3) deposit insurance has been extended, helping to insulate the money stock from credit market disruption; 4) the commercial banking system has received assistance via a recapitalization program, while existing equity holders have borne losses; and 5) an interest-on-reserves system has been introduced. These five elements of the policy response are in keeping with those that would arise from Friedman's framework, while a number of the five depart appreciably from other prominent benchmarks (such as the Bagehot-Thornton prescription for discount rate policy, and New Keynesian approaches to stabilization policy). One notable part of the policy response, the TALF initiative, draws largely on frameworks other than Friedman's. But, in important respects, the overall monetary and financial policy response to the crisis can be viewed as Friedman's monetary economics in practice.
    Date: 2011
  8. By: Beckert, Jens
    Abstract: Starting from the assumption that decision situations in economic contexts are characterized by fundamental uncertainty, the paper argues that the decision-making of intentionally rational actors is anchored in fictions. 'Fictionality' in economic action is the inhabitation in the mind of an imagined future state of the world and the beliefs in causal mechanisms leading to this future state. Actors are motivated in their actions by the imagined future and organize their activities based on these mental representations. Since these representations are not confined to empirical reality, fictionality is also a source of creativity in the economy. Fictionality opens up a way to an understanding of the microfoundations of the dynamics of the economy. The paper develops the notion of fictional expectations and applies it to investments, consumption and money. The last part relates the notion of fiction to calculation and social macrostructures as two other devices of decision-making and hints at the relevance of fictionality for the macrodynamics of capitalism. -- Entscheidungshandeln in wirtschaftlichen Kontexten findet unter Bedingungen fundamentaler Ungewissheit statt. Ausgehend von dieser Annahme argumentiert das Papier, dass Entscheidungen intentional rationaler Akteure in Fiktionen verankert sind. 'Fiktionalität' umfasst die Vorstellungen des zukünftigen Zustands der Welt und der kausalen Mechanismen, die zu diesem Zustand führen. Akteure werden durch diese Imaginationen der Zukunft motiviert und organisieren ihre Handlungen auf ihrer Grundlage. Da die Vorstellungen nicht an die empirische Realität gebunden sind, ist Fiktionalität auch eine Quelle der Kreativität. Fiktionalität eröffnet so einen Weg zum Verständnis der Mikrofundierung wirtschaftlicher Dynamik. Das Papier entwickelt das Konzept der fiktionalen Erwartungen und wendet es auf Investitionen, Konsum und Geld an. Im letzten Teil wird das Verhältnis von Fiktionen zur Rolle von Kalkulation und sozialen Makrostrukturen in der Entscheidungsfindung erörtert und die Relevanz von Fiktionalität für die Makrodynamik des Kapitalismus angedeutet.
    Date: 2011
  9. By: Jean-Claude Barbier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: La comparaison internationale des politiques est, de façon cruciale, liée à la pratique de la traduction pour deux raisons qui s'interpénètrent : la compréhension comparée des politiques ne peut faire abstraction du rôle central que joue la langue dans tout exercice de la politique, d'une part ; de l'autre, l'investigation des sciences sociales ne peut, sans dommage grave, s'abstenir d'interroger les langues des pays que le chercheur cherche à comprendre, et à comparer entre eux. L'importance de la dimension linguistique de l'enquête comparative approfondie est explorée à propos de l'exemple des politiques sociales. Une enquête particulière illustre cette importance. Il s'agit de la réforme de la protection sociale qu'on a qualifiée de workfare ou ailleurs d'activation. La réforme a fait du bruit des deux côtés de l'Atlantique et la traduction défectueuse a conduit, depuis 10 ans, à des controverses dommageables. Plus généralement, cet exemple permet de considérer ce qu'on peut considérer comme une réticence de la comparaison internationale des politiques sociales - et, sans doute, plus largement, de l'analyse des politiques en sociologie et en science politique - à poser sérieusement la question des différences culturelles et de la variété des cultures politiques.
    Keywords: Comparaison internationale, workfare, politiques d'activation de la protection sociale, traduction.
    Date: 2011–04

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