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on History and Philosophy of Economics |
| By: | Herrmann-Pillath, Carsten |
| Abstract: | Combining different new approaches to human behavior in neuroeconomics, the cognitive sciences and institutional economics, this paper sketches the fundamentals of a naturalistic theory of economic order. In this endeavour, the argument follows the track laid down by Hayek's comprehensive thinking about institutions and the economy, but provides new and more detailed causal accounts of the central mechanisms that link institutions and neurocognitive patterns. Based on an analytical framework to substantive institutions that has been recently proposed by Aoki, I present Hayek's theory of culture in terms of modern conceptions of performativity and distributed cognition. As a result, I introduce the concept of institutionally guided behavioral patterns, which is a modern restatement of concepts such as Veblen's habits of thought. This approach is applied on the institution of money, analyzing its emergence as a cognitive novelty that activates universal neuronal embodiments of the human penchant for social exchange and reciprocity. Against this background I argue that the naturalistic approach to economic order favours a perspective on economic policy that emphasizes cultural aspects, in particular, the formation of individual identities in different societal groups that create ethical commitments. Again, this argument is based on recent insights of the brain sciences and intends to offer an alternative to the recent proposals of a Libertarian Paternalism that have also taken insights from behavioral economics and neuroeconomics as a starting point. I show that my line of thinking can be traced back to Adam Smith, as far as the conjunction of his views in the Theory of Moral Sentiment and the Wealth of Nations is concerned. -- |
| Keywords: | Hayek,brain and mind,culture and institutions,Aoki,language,money,dual selves,identity,Adam Smith |
| JEL: | B41 B52 D02 D87 P0 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:180&r=hpe |
| By: | Peter Wagner |
| Abstract: | Are 'modern societies' necessarily democratic societies and capitalist (or: market) societies? This is what most of the social sciences of the post-Second World War period have assumed, while only some strands of critical, often Marx-inspired approaches contested this connection. This essay briefly reconsiders the link between democracy and capitalism both in theoretical and historical terms to then advance a hypothesis about the current constellation of political and economic modernity which seems to be marked by a paradox. On the one hand, both democracy, apparently spreading through 'waves of democratization', and capitalism, as the outcome of economic globalization, seem to be without alternative. On the other hand, current capitalism is highly crisis-ridden and democracy, at least in Europe, witnesses strong signs of disaffection. In this light, the essay proposes to see the current constellation as the outcome of a democratic crisis of capitalism during the 1970s. The reasoning proceeds in five steps. First, we will reconsider theories that have assumed that there is a strong conceptual connection between democracy and capitalism. Secondly, we will briefly review the history of the relation between modern capitalism and modern democracy from their beginnings until the 1970s to refine the ideas about such conceptual link. These two steps, thirdly, will allow for an interim conclusion to understand the double crisis of the 1970s, of both capitalism and democracy, an understanding that opens the path to two observations – the fourth and fifth steps – on the current condition of global capitalism and the alleged global movement of democratisation. First, the developments of the past four decades can be seen as a transformation of capitalism in reaction to democratic demands. Extrapolating from this insight, second, one may ask whether there is not a basic tension between economic and political modernity, given the evident difficulty of keeping political citizenship connected to socio-economic citizenship. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:44&r=hpe |
| By: | Julian C. Jamison |
| Abstract: | In economic situations a player often has preferences regarding not only his or her own outcome but also regarding what happens to fellow players, concerns that are entirely apart from any strategic considerations. While this can be modeled directly by simply writing down a player's final preferences, these are commonly unknown a priori. In many cases it is therefore both helpful and instructive to explicitly model these interactions. This paper, building on a model due to Bergstrom (1989, 1999), presents a simple structure in the context of game theory that incorporates the "synergies" between players. It is powerful enough to cover a wide range of such interactions and model many disparate experimental and empirical results, yet it is straightforward enough to be used in many applied situations where altruism, or a baser motive, is implied. |
| Keywords: | Human behavior ; Game theory ; Altruism |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:11-15&r=hpe |
| By: | Herrmann-Pillath, Carsten |
| Abstract: | In recent extensions of the Darwinian paradigm into economics, the replicator-interactor duality looms large. I propose a strictly naturalistic approach to this duality in the context of the theory of institutions, which means that its use is seen as being always and necessarily dependent on identifying a physical realization. I introduce a general framework for the analysis of institutions, which synthesizes Searle's and Aoki's theories, especially with regard to the role of public representations (signs) in the coordination of actions, and the function of cognitive processes that underly rule-following as a behavioral disposition. This allows to conceive institutions as causal circuits that connect the population-level dynamics of interactions with cognitive phenomena on the individual level. Those cognitive phenomena ultimately root in neuronal structures. So, I draw on a critical restatement of the concept of the meme by Aunger to propose a new conceptualization of the replicator in the context of institutions, namely, the replicator is a causal conjunction between signs and neuronal structures which undergirds the dispositions that generate rule-following actions. Signs, in turn, are outcomes of population-level interactions. I apply this framework on the case of money, analyzing the emotions that go along with the use of money, and presenting a stylized account of the emergence of money in terms of the naturalized Searle-Aoki model. In this view, money is a neuronally anchored metaphor for emotions relating with social exchange and reciprocity. Money as a meme is physically realized in a replicator which is a causal conjunction of money artefacts and money emotions. -- |
| Keywords: | Generalized Darwinism,institutions,replicator/interactor,Searle,Aoki,naturalism,memes,emotions,money |
| JEL: | B52 D02 D87 E40 Z1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:182&r=hpe |
| By: | Nicholas Ziros |
| Abstract: | This article characterizes the set of correlated equilibria that result from open negotiations, which players make prior to playing a strategic game. A negotiation-proof correlated equilibrium is defined as a correlated strategy in which the negotiation process among all of the players prevents the formation of any improving coalitional deviation. Additionally, this notion of equilibrium is adapted to general games with incomplete information. |
| Keywords: | Correlated equilibrium, coalitions, negotiation, incomplete information |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:14-2011&r=hpe |
| By: | Bos, Frits |
| Abstract: | This paper describes the history of the national accounts starting from the incidental estimates by Petty, King and Davenant in the seventeenth century. The period 1930-1950 was a revolution in terms of the roles and uses of the national accounts, e.g. the discovery of input-output analysis, purchasing power parities and macro-econometric modelling and the Keynesian revolution in economic thinking. Most of these new uses also reinforced each other. These uses were also closely linked to the economic circumstances: the economic crisis of the thirties, the Second World War and the need for recovery afterwards stimulated an active role of the government. In 1947, for the first time a report on national accounting concepts was published by the UN. Some years later, the first official guidelines were published. Since then, national accounting theory and practice have increasingly been dominated by these guidelines. The period since the Second World War can thus best be labelled as 'the era of the international guidelines'. Many innovations in national accounting have been made since the Second World War. After gaining wider acceptance and maturity, a great deal of them has been included in the guidelines and some others have not. Since the Second World War, the national accounts statistics published by countries all over the world have changed drastically in scope, concepts, frequency and detail. These developments in national accounts practice do not have a straightforward relationship to the international guidelines. Due to the European Unification, the supply of national accounts in Europe has been improved dramatically. |
| Keywords: | History of national accounts; History of input-output analysis; Kuznets; Petty; King; Davenant; Vauban; Quesnay; Fleetwood; Boisguillebert; Keynes; Hicks; Frisch; van Cleeff; Clark; Meade; Stone; Tinbergen; Lindahl; Goldsmith; Copeland; History of international guidelines of national accounting |
| JEL: | O47 C82 B1 E01 E60 O11 O20 B2 B41 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35391&r=hpe |
| By: | Naqvi, Nadeem |
| Abstract: | This paper compares the theory of value and distribution of Arrow and Debreu [1954] with that of Sraffa [1960]. I consider such versions of the two models that capture their salient features, without aiming at the greatest possible generality, so as to isolate the precise nature of the differences between the two conceptions of the same economic reality, and inter alia, to quarantine both the sources and the entailments of the differences in the two theories that respectively purport to determine the values of commodities and distribution of income in society. Both theories are complete and consistent. Sraffa’s model is based exclusively on factual information, so it achieves less in terms of determining endogenous variables. The Arrow-Debreu is based on counterfactual information regarding additional production scenarios that are unobserved, in addition to the factual information that Sraffa has, so it achieves more by way of determination of endogenous variables. In terms of entailments, in Sraffa's theory there is an insufficiency of determinants in the economic grounds of society, thereby requiring the political component of society to also play an influential role in the joint determination of values and distribution. In the Arrow-Debreu model this determination is made complete solely in the economic sphere of society, rendering this theory purely economic, rather than political-economic, as in Sraffa. Both the information content difference at source, and the purely-economic versus political-economic difference in the entailments of what it takes to determine values and distribution, render the two theories radically different. In addition, (1) the prices in the two theories are different both in terms of definitions and values, and (2) since Sraffa’s model has only one set of numbers on the observed production of commodities by means of commodities and labor for a single year, it is impossible to define constant returns to scale, while in the Arrow-Debreu model, this property is admissible, and possible to define, because their model’s information base is sufficiently larger than Sraffa’s. Further, Sraffa’s theory is invariant to (a) the interpretation of prices – market-clearing, long-period, or whatever, (b) multiplicity of profit rates across industries, instead of a uniform rate of profit, and (c) presence or absence of general aggregate demand functions for commodities, and is (d) more general than the Arrow-Debreu theory because it is based on weaker assumptions, in the sense of a strictly smaller information set, so that it is only to be expected that the Arrow-Debreu theory would be capable of determining more endogenous variables in the model of an economy. (416 words) |
| Keywords: | theory of value; income distribution; general equilibrium; capital; constant returns to scale; rate of profit |
| JEL: | E25 D33 E11 D51 |
| Date: | 2011–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35312&r=hpe |
| By: | James Andreoni; Justin M. Rao; Hannah Trachtman |
| Abstract: | What triggers giving? We explore this in a randomized natural field experiment during the Salvation Army's annual campaign. Solicitors were at one or both of two main entrances to a supermarket, making the solicitation either easy or difficult to avoid. Additionally, solicitors were either silent, or asked "please give" to passersby. We observed over 17,000 passings over four days, and found dramatic avoidance of the solicitors, but only during a direct ask. Furthermore, asking increased donations 75%. Across all conditions, seeking the solicitor was exceedingly rare. The results do not support static views of altruism, such as inequity aversion, and instead highlight the importance of social cues and psychological features of the giver-receiver interaction. We argue that avoidance could evidence a lack of altruism or self-control strategy to deal with empathic reflexes to give. |
| JEL: | D03 D64 H41 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17648&r=hpe |
| By: | Todd R. Kaplan (Department of Economics, University of Haifa, Israel.); Bradley J. Ruffle Author-X-Name-Bradley J. (Department of Economics, Ben-Gurion University, Beer Sheva, Israel.) |
| Abstract: | We introduce a two-player, binary-choice game in which both players have a privately known incentive to enter, yet the combined surplus is highest if only one enters. Repetition of this game admits two distinct ways to cooperate: turn taking and cutoffs, which rely on the player’s private value to entry. A series of experiments highlights the role of private information in determining which mode players adopt. If an individual’s entry values vary little (e.g., mundane tasks), taking turns is likely; if these potential values are diverse (e.g., difficult tasks that differentiate individuals by skill or preferences), cutoff cooperation emerges. |
| JEL: | C90 Z13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bgu:wpaper:1105&r=hpe |
| By: | Jan Heufer |
| Abstract: | This article analyses a game where players sequentially choose either to become insiders and pick one of finitely many locations or to remain outsiders. They will only become insiders if a minimum distance to the next player can be assured; their secondary objective is to maximise the minimal distance to other players. This is illustrated by considering the strategic behaviour of men choosing from a set of urinals in a public lavatory. However, besides very similar situations (e.g. settling of residents in a newly developed area, the selection of food patches by foraging animals, choosing seats in waiting rooms or lines in a swimming pool), the game might also relevant to the problem of placing billboards attempting to catch the attention of passers-by or similar economic situations. In the non-cooperative equilibrium, all insiders behave as if they cooperated with each other and minimised the total number of insiders. It is shown that strategic behaviour leads to an equilibrium with substantial underutilization of available locations. Increasing the number of locations tends to decrease utilization. The removal of some locations which leads to gaps can not only increase relative utilization but even absolute maximum capacity. |
| Keywords: | Efficient design of facilities; location games; privacy concerns; strategic entry prevention; unfriendly seating arrangement; urinal problem |
| JEL: | C70 H89 R12 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0293&r=hpe |
| By: | Jo, Tae-Hee |
| Abstract: | Corporate social responsibility (CSR) is in vogue in recent times. It has been widely received by socially concerned people in business, academia, and NGOs that CSR would lend support to the improvement in social welfare and the protection of environment. However, the question that whether corporations are socially responsible or corporations should behave responsibly is beside the point from the heterodox economic perspective. The proper question to pose is how corporations manipulate the social by means of CSR. Drawing upon the heterodox theory of the business enterprise along with the social provisioning perspective, I argue that the business corporation has always acted in a socially responsible manner by generating ethical-political-cultural values, norms, and beliefs that legitimize whatever the business corporation does is socially responsible. In this respect, CSR is a market-based means to control the social provisioning process by way of creating an illusionary image of corporations and, thereby, hiding the ruthless acquisitive drive and the exploitation of human beings and nature. |
| Keywords: | Corporate social responsibility; social provisioning process; the business enterprise; social welfare |
| JEL: | D21 B50 D60 G30 |
| Date: | 2011–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35367&r=hpe |
| By: | Bernard M.S. van Praag (University of Amsterdam); Erik J.S. Plug (University of Amsterdam) |
| Date: | 2011–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110173&r=hpe |
| By: | Mathieu Renaud (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon Sorbonne) |
| Abstract: | Si il y a de l'inédit dans le fait de prendre pour objet les écrits méthodologiques de Malinvaud, on ne peut évidemment pas faire l'économie d'une présentation quelque peu approfondie. La nécessité de ce travail préalable répond à une exigence de contextualisation du corpus étudié : il s'agit de donner à voir ce qui se joue par ces écrits, en présentant quelques éléments qui serviront largement les objectifs de notre exposé. L'introduction générale fera alors office de mise en perspective. Dans un premier temps, on expose ce qui participe - matériellement - de l'objet : rappeler la trajectoire intellectuelle et institutionnelle d'Edmond Malinvaud, situer la place des écrits méthodologiques dans son oeuvre, présenter les contours et les limites du corpus de textes considéré. Dans un second temps, on s'attache plus spécialement à commenter le statut de ces écrits : rendre compte de leur dispersion, donner à voir les motivations explicites de Malinvaud, et étudier la manière avec laquelle ce dernier s'est inséré dans le champ de la méthodologie économique. |
| Date: | 2011–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:dumas-00648974&r=hpe |