nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2011‒09‒16
sixteen papers chosen by
Erik Thomson
University of Manitoba

  1. Economic Emergence: an Evolutionary Economic Perspective By John Foster; J. Stan Metcalfe
  2. Increasing returns and stability By Kakarot-Handtke, Egmont
  3. The impact of economics blogs By McKenzie, David; Ozler, Berk
  4. A new look at Marx' refutation of Ricardo's refutation of the labor theory of value. By Kepa M. Ormazabal
  5. On the Smooth Ambiguity Model: A Reply By Peter Klibanoff; Massimo Marinacci; Sujoy Mukerji
  6. "Central Banking in an Era of Quantitative Easing" By Andrew Sheng
  7. Homo oeconomicus vs. homo academicus - provocări și dileme din perspectiva globalizării By Hălăngescu, Constantin I.
  8. Sharing the surplus in games with externalities within and across issues By Effrosyni Diamantoudi; Inés Macho-Stadler; David Pérez-Castrillo; Licun Xue
  9. An extension of the Sensmaking-Intuition Model (SIM) by defining ethics: an answer to Sonenshein. By Olivier Charpateau
  10. The power to tax By Estrada, Fernando
  11. Trust, Reciprocity and Rules By Thomas A. Rietz; Eric Schniter; Roman M. Sheremeta; Timothy W. Shields
  12. Cooperative games with incomplete information: Some open problems By Françoise Forges; Roberto Serrano
  13. Re-Thinking Reputation By Andrew Mell
  14. The conflict between general equilibrium and the Marshallian cross By Zaman, Asad; Saglam, Ismail
  15. Maurice Allais, itinéraire d’un économiste français. By Sterdyniak, Henri
  16. Man is the only animal that trips twice over the same stone By Lorca-Susino, Maria

  1. By: John Foster; J. Stan Metcalfe
    Abstract: The standard neoclassical approach to economic theorizing excludes, by definition, economic emergence and the related phenomenon of entrepreneurship. We explore how the most economic of human behaviours, entrepreneurship, came to be largely excluded from mainstream economic theory. In contrast, we report that evolutionary economists have acknowledged the importance of understanding emergence and we explore the advances that have been made in this regard. We go on to argue that evolutionary economics can make further progress by taking a more 'naturalistic' approach to economic evolution. This requires that economic analysis be fully embedded in complex economic system theory and that associated understandings as to how humans react to states of uncertainty be explicitly dealt with. We argue that 'knowledge,' because of the existence of uncertainty is, to a large degree 'conjectural' and, thus, is closely linked to our emotional states. Our economic behaviour is also influenced by the reality that we, and the systems that we create, are dissipative structures. Thus, we introduce the notions of 'energy gradients' and 'knowledge gradients' as essential concepts in understanding economic emergence and resultant economic growth.
    Keywords: Length 34 pages
    Date: 2011–06
  2. By: Kakarot-Handtke, Egmont
    Abstract: Increasing returns are an incontrovertible fact since Adam Smith hailed them as the very originators of wealth, yet they play havoc with general equilibrium. They fit, in marked contrast, nicely into the structural axiomatic framework. This indicates that it is worthwhile to replace the behavioral axioms of standard economics by objective structural axioms. These are in the present paper applied to the question of how increasing returns affect the systemic interrelations in the pure consumption economy. To invite a reality check the logical implications of the structural employment equation are set in relation to three well-known statistical relationships.
    Keywords: New framework of concepts; Structure-centric; Axiom set; Verdoorn’s law; Phillips curve; Okun’s law
    JEL: E24 E23 D24
    Date: 2011–09–02
  3. By: McKenzie, David; Ozler, Berk
    Abstract: There is a proliferation of economics blogs, with increasing numbers of economists attracting large numbers of readers, yet little is known about the impact of this new medium. Using a variety of experimental and non-experimental techniques, this study quantifies some of their effects. First, links from blogs cause a striking increase in the number of abstract views and downloads of economics papers. Second, blogging raises the profile of the blogger (and his or her institution) and boosts their reputation above economists with similar publication records. Finally, a blog can transform attitudes about some of the topics it covers.
    Keywords: Tertiary Education,E-Business,Economic Theory&Research,Information Security&Privacy,Agricultural Knowledge&Information Systems
    Date: 2011–08–01
  4. By: Kepa M. Ormazabal (UPV/EHU)
    Abstract: In this paper, I would like to bring back to light the forgotten critique of Marx to the widely accepted view that Ricardo succeeded in refuting the universal validity of the labor theory of value in "Principles", chapter 1, sections IV and V. By the hand of Marx, I contend that the arguments of Ricardo are unsuccessful. Nothing of what Ricardo says in his "Principles" implies anything for the question as to whether or not value consists in objectified labor. The problem that Ricardo faces in "Principles". chapter I sections IV and V, without being aware of it, is all about the distribution of profit and, consequently, about the distribution of an already created value through a system of competitive money prices, but not a problem about the creation on the nature of value, which are the themes of the labor (and note wages) theory of value.
    Keywords: labor theory of value, Ricardo, Marx
    Date: 2011–09–08
  5. By: Peter Klibanoff; Massimo Marinacci; Sujoy Mukerji
    Abstract: We find that Epstein (2010)'s Ellsberg-style thought experiments pose, contrary to his claims, no paradox or difficulty for the smooth ambiguity model of decision making under uncertainty developed by Klibanoff, Marinacci and Mukerji (2005). Not only are the thought experiments naturally handled by the smooth ambiguity model, but our reanalysis shows that they highlight some of its strengths compared to models such as the maxmin expected utility model (Gilboa and Schmeidler (1989)). In particular, these examples pose no challenge to the model's foundations, interpretation of the model as affording a separation of ambiguity and ambiguity attitude or the potential for calibrating ambiguity attitude in the model.
    Date: 2011
  6. By: Andrew Sheng
    Abstract: This paper reviews the key insights of Hyman P. Minsky in arguing why finance cannot be left to free markets, drawing on the East Asian development experience. The paper suggests that Minsky's more complete stock-flow consistent analytical framework, by putting finance at the center of analysis of economic and financial system stability, is much more pragmatic and realistic compared to the prevailing neoclassical analysis. Drawing upon the East Asian experience, the paper finds that Minsky's analysis has a system-wide slant and correctly identifies Big Government and investment as driving employment and profits, respectively. Specifically, his two-price system can aid policymakers in correcting the systemic vulnerability posed by asset bubbles. By concentrating on cash-flow analysis and funding behaviors, Minsky's analysis provides the link between cash flows and changes in balance sheets, and therefore can help identify unsustainable Ponzi processes. Overall, his multidimensional analytical framework is found to be more relevant than ever in understanding the Asian crisis, the 2008 global financial crisis, and policymaking in the postcrisis world.
    Keywords: Financial Economics; Keynes; Keynesian; Post-Keynesian; Government Policy and Regulation
    JEL: E12 G28
    Date: 2011–09
  7. By: Hălăngescu, Constantin I.
    Abstract: Structured as an essay, this workpaper aims to present sui generis one point of view on the relationship between two models of the social-human typology in the context of globalization: homo oeconomicus and homo academicus. Being only a starting point for futher research into a tripartite structure, the paper preliminary presents views on views of MAN’s multivalent positions between vocation and the adaptation to globalization flows, the dilemmas and paradoxes between the oeconomicus and academicus models which I consider inherent into a higher education’s biography in a globalized world. Developed from hypothesis to conclusion, the assertion that homo academicus is deeply involved in mundus academicus, while homo oeconomicus stimulates in a global manner the whole mundus academicus, generates various approaches in which the economic and the academic either mingle or dissociate, but the conjunction or disjunction cases unavoidably lead to outlining the postulate that no architecture on a world academic map is built without „Development through Innovation and Innovation through Education” and that leads to an absolutely justified interrogation in the globalized present: Will homo academicus be able to adapt to the values of homo oeconomicus, sell its know-how and produce conveniently?
    Keywords: homo oeconomicus; homo academicus; globalisation; internationalisation; high education; economics; knowlegde- based society; knowlegde based economy; brain-power industries; Bologna proces
    JEL: I29 A20 F01 I21 D83
    Date: 2011–09–09
  8. By: Effrosyni Diamantoudi; Inés Macho-Stadler; David Pérez-Castrillo; Licun Xue
    Abstract: We consider environments in which agents can cooperate on multiple issues and externalities are present both within and across issues. We propose a way to extend (Shapley) values that have been put forward to deal with externalities within issues to games where there are externalities within and across issues. We characterize our proposal through axioms that extend the Shapley axioms to our more general environment.
    Keywords: externalities, cooperative game theory, Shapley value, linked issues.
    JEL: C71 D62
    Date: 2011–08–01
  9. By: Olivier Charpateau (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris Dauphine - Paris IX)
    Abstract: Sonenshein based his Sensmaking-Intuition Model of ethical decision on a critical approach the rational models. In his model, sens-making for the ethical issue construction and the intuitive process of decision are the central articulations. But the model doesn't give a clear definition of ethics, suggesting that all ethical decisions can be evaluate on a scale of individual or collective behavior. But this scale doesn't represent the multiplicity of ethical orientations. I review the most important philosophical ethicals systems and expose the implications on the Sonenshein's model. I propose some modifications and suggest orientations for future researches.
    Keywords: Sensmaking-Intuition Model, ethical decision model, business ethics
    Date: 2011–08–12
  10. By: Estrada, Fernando
    Abstract: This article describes the argumentative structure of Hayek on the relationship between power to tax and redistribution. It is observed throughout its work giving special attention to two works: The Constitution of Liberty (1959) and Law, Legislation and Liberty, vol3; The Political Order of Free People, 1979) Hayek describes one of the arguments most complete information bout SFP progressive tax systems (progressive tax). According to the author the history of the tax progressive system, works against such a tax model and deploys a variety of arguments in his favorite spot by critics: liberal democracy.
    Keywords: Power to Tax; Redistribution; Government; Progressive Tax; Democracy; Hayek
    JEL: E62 O23 E64 B1 E2 B2 E6 E60
    Date: 2011–09–06
  11. By: Thomas A. Rietz (Henry B. Tippie College of Business, University of Iowa); Eric Schniter (Economic Science Institute, Chapman University); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); Timothy W. Shields (Argyros School of Business and Economics, Chapman University)
    Abstract: In the absence of enforceable contracts, many economic and personal interactions rely on trust and reciprocity. Research shows that although this reliance often works well, sometimes it breaks down. Simple rules mandating minimum standards on reciprocation prevent the most egregious trust violations, but may also undermine behavior that would have otherwise produced higher overall economic welfare. We test the efficacy of exogenously imposed minimum return rules using experimental trust games. We find that rules fail to increase trust and trustworthiness. Thus low minimum standards significantly decrease economic welfare. Although sufficiently restrictive rules restore welfare, trust and trustworthy behavior never returns.
    Keywords: trust games, experiments, reputation, information, reciprocity
    JEL: C72 C91 D72
    Date: 2011
  12. By: Françoise Forges (l'Université Paris-Dauphine); Roberto Serrano (Brown University and IMDEA Social Sciences Institute)
    Abstract: This is a brief survey describing some of the recent progress and open problems in the area of cooperative games with incomplete information. We discuss exchange economies, cooperative Bayesian games with orthogonal coalitions, and issues of cooperation in non-cooperative Bayesian games.
    Keywords: strategic externalities; informational externalities; exchange economies; cooperative games with orthogonal coalitions; non-cooperative bayesian games
    JEL: C71 C72 D51 D82
    Date: 2011–09–01
  13. By: Andrew Mell
    Abstract: Economic models of reputation make strong assumptions about the information available to players. In particular, it is assumed that they know the entire history of the game to date. Such models can seldom reproduce the cycling of reputations we observe in the real world. We build a model of reputation with more realistic assumptions about the partial knowledge of the history that would be available and how it might be used. This new approach can explain cycles in reputations.
    Keywords: Reputation, monitoring, expectations formation
    JEL: D82 D84
    Date: 2011
  14. By: Zaman, Asad; Saglam, Ismail
    Abstract: This paper illustrates on a simple model of production economy how the concept of partial equilibrium can be in an unresolvable conflict with the general equilibrium.
    Keywords: Demand curve; Partial equilibrium; General equilibrium
    JEL: D01
    Date: 2010–09
  15. By: Sterdyniak, Henri (Centre de recherche en économie de Sciences Po)
    Abstract: L’oeuvre de Maurice Allais est abondante et protéiforme. Elle comporte des travaux d’économie théorique et d’économie appliquée comme des ouvrages de politique économique. Dans les années 1940, il établit rigoureusement les fondements de la théorie microéconomique néo-classique. C’est pour ces « contributions pionnières à la théorie des marchés et de l’utilisation efficace des ressources » qu’il obtient, 40 ans plus tard, le prix Nobel d’économie en 1988. En 1952 il remet en cause la théorie de la décision en avenir incertain, apparaissant ainsi comme le précurseur de la finance comportementale. Puis, il s’égare dans les arcanes de la « théorie héréditaire, relativiste et logistique de la demande de monnaie », s’isolant ainsi de la communauté scientifique internationale. Ses analyses le conduisent à préconiser, au nom du libéralisme, une réforme monétaire (le « 100 % monnaie »), l’attribution à l’Etat de toutes les rentes (par un impôt sur le capital) et l’indexation de toutes les créances. Après son prix Nobel, il se consacre à la lutte contre la mondialisation libérale et la construction européenne libre-échangiste, combat dont le lien avec ses travaux scientifiques ne va pas de soi.
    Keywords: Théorie néo-classique ; monétarisme ; mondialisation;
    JEL: B3
    Date: 2011
  16. By: Lorca-Susino, Maria
    Abstract: Since mid-2009 the world has been experiencing a feeble economic recovery that has been halted by an increase in oil prices which have negatively affected the recovery. History has taught us that the world has developed thanks to major industrial revolutions which have foster economic growth. The first industrial revolution took place in the 19th century when engineers started using refined coal which helped the first step of industrialization. The second major economic revolution came in the 20th century when the world moved forward due to the development of the petroleum industry with fuel oil and gasoline as a source of energy. The world’s industrial performance and economic growth in the 21st century is still stuck on fuel oil and gasoline a limited resource which has become a source of political and economic instability.
    Keywords: Oil crisis; economics; political turmoil
    JEL: Q43
    Date: 2011–07–10

This nep-hpe issue is ©2011 by Erik Thomson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.