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on History and Philosophy of Economics |
| By: | Boldyrev, Ivan A.; Herrmann-Pillath, Carsten |
| Abstract: | In his Idea of Justice, Amartya Sen compares the two basic approaches to evaluate institutions, transcendental institutionalism and realization-focused comparisons. Referring to Smith's Impartial Spectator, he argues in favour of the latter and proposes the principle of Open Impartiality. However, this cannot solve the tension between universalism and contextualization of values that Sen therefore inherits from Smith. Based on recent Hegel scholarship, we argue that some of the difficulties can be resolved, considering the role Smith played in the development of Hegel's thinking. Hegel's concept of recognition plays an essential role in establishing the possibility of impartiality both on the level of consciousness and on the level of institutional intersubjectivity. Hegel's critique of Kants formalist ethics (also considered as transcendental institutionalism by Sen), his analysis of the civil society in the Philosophy of Right, especially his focus on associations and estates, can serve as a model for making Sen's focus on public discourse theoretically more concise and pragmatically feasible. Hegel shows that universalistic attitudes can only emerge in specific institutional contexts. -- |
| Keywords: | Theory of Moral Sentiments,Sen,Hegel,recognition,civil society,associations,public discourse |
| JEL: | B12 B25 B52 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:193&r=hpe |
| By: | Rtischev, Dimitry |
| Abstract: | Evolution of preferences models often assume that all agents display and observe preferences costlessly. Instead, we endogenize mindsight (to observe preferences) and transparency (to show preferences) as slightly costly mechanisms that agents may or may not possess. Unlike in the costless models, we show that universal rule-rationality, mindsight and transparency do not constitute an equilibrium but universal act-rationality, mind-blindness, and opaqueness do. We also find that rule-rationality, mindsight, and transparency may exist in evolved populations, albeit only in a portion of the population whose size fluctuates along an orbit around a focal point. We apply our results to Ultimatum and Trust games to explore how costly and optional mindsight may affect economic performance in interactions among evolved agents. |
| Keywords: | evolution of preferences; act-rationality; rule-rationality; ultimatum game; trust game |
| JEL: | D83 C73 D87 |
| Date: | 2012–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40890&r=hpe |
| By: | Ho Fai Chan (QUT); Benno Torgler (QUT) |
| Abstract: | An academic award is method by which peers offer recognition of intellectual efforts. In this paper we take a purely descriptive look at the relationship between becoming a Fellow of the Econometric Society and receiving the Nobel Prize in economics. We discover some interesting aspects: of all 69 Nobel Prize Laureates between 1969 and 2011, only 9 of them were not also Fellows. Moreover, the proportion of future Nobel winners among the Fellows has been quite high throughout time and a large share of researchers who became Fellows between the 1930s and 1950s became Nobel Laureates at a later stage. On average, researchers become Fellows relatively early in their career (14.9 years after their PhD) and those who were subsequently made Nobel Laureates become Fellows earlier than other researchers. Interestingly, Harvard and MIT have been the dominant PhD granting institutions to generate Fellows and Nobel Laureates in the past. |
| Keywords: | Fellows of the Econometric Society, Nobel Laureate, economics of science, awards. |
| JEL: | D71 A14 |
| Date: | 2012–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:291&r=hpe |
| By: | Friedman, Daniel; Cason, Timothy N; Hopkins, Ed |
| Keywords: | Economics, experiments, learning, mixed equilibrium, continuous time |
| Date: | 2012–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt6947v2f5&r=hpe |
| By: | OECD |
| Abstract: | An examination of payments issues is taking place in the context of the review of the OECD’s 1999 guidelines on e-commerce. This report looks at what might need to be amplified or revised to enhance consumer trust and adoption of new and emerging online and mobile payment mechanisms. It reflects contributions made by national delegations, business and civil society. |
| Date: | 2012–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:204-en&r=hpe |
| By: | Dominique Torre (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université de Nice Sophia Antipolis (UNS)) |
| Abstract: | Paul Einzig was born in 1897 in Brasov but comes to London in 1919. From 1920, he begins to write articles for scienti c reviews, especially The Economic Journal, while he contributes more regularly to The Financial News, The Financial Times or The Banker. From this period to his death in 1973, he writes also many books, on very diverse subjects but devoted for the major part to monetary analysis and international nance. This paper concentrates on two subjects recurrently developed by Paul Einzig. The rst is the analysis of forward exchange market where Einzig observes anomalies in the covered interest rates parity. These observations, in accordance with those of Keynes, initiate a long controversy - still not closed -, on the origin of these anomalies. The second subject is less technical and more fundamental: what are in practice the respective properties of the di erent possible external exchange regimes? Einzig provides all his life long historical and analytical arguments to the reader interested in this question. He observes and comments regularly and in detail the crises and failures of di erent monetary arrangements. These observations and analyzes are still useful at a time when, after many years of trust in the corner solutions (free otation and monetary unions) the international community nds necessary to elaborate adequate regulations for the Eurozone policy-mix, or to control the excessive instability of the international capital flows. |
| Keywords: | Paul Einzig, covered interest rates parity, Gold Exchange Standard, free flotation, Romania |
| Date: | 2012–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00726126&r=hpe |
| By: | Hollow, Matthew |
| Abstract: | This article looks in more depth at the different ways in which ideas about cashless societies were articulated and explored in pre-1900 utopian literature. Taking examples from the works of key writers such as Thomas More, Robert Owen, William Morris and Edward Bellamy, it discusses the different ways in which the problems associated with conventional notes-and-coins monetary systems were tackled as well as looking at the proposals for alternative payment systems to take their place. Ultimately, what it shows is that although the desire to dispense with cash and find a more efficient and less-exploitable payment system is certainly nothing new, the practical problems associated with actually implementing such a system remain hugely challenging. This paper was written for the Cashless Society Project, an interdisciplinary and international effort to add some historical and analytical perspectives to discussions about the future of money, banking and payments. For more information, see http://cashlesssociety.wordpress.com/. |
| Keywords: | utopian; cashless; money; pre-1900 |
| JEL: | E42 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40780&r=hpe |
| By: | Eric Smith (Santa Fe Institute); Martin Shubik (Cowles Foundation, Yale University) |
| Abstract: | The basic two-noncooperative-equilibrium-point model of Diamond and Dybvig is considered along with the work of Morris and Shin utilizing the possibility of outside noise to select a unique equilibrium point. Both of these approaches are essentially nondynamic. We add an explicit replicator dynamic from evolutionary game theory to provide for a sensitivity analysis that encompasses both models and contains the results of both depending on parameter settings. |
| Keywords: | Multiple equilibria, Runs, Replicator dynamics, Sensitivity analysis |
| JEL: | C73 D84 E59 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1869&r=hpe |
| By: | Auerbach, Paul (Kingston University London); Sotiropoulos, Dimitris P. (Kingston University London) |
| Abstract: | In the early twentieth century, a range of writers produced visions of a socialist economy whose distinguishing characteristic was an allocation of resources using a ‘technical’ perspective. In the 1930s, Oskar Lange took up the challenge of Ludwig von Mises’ claim of the ‘impossibility’ of constructing a socialist economy on such an engineering basis. He readily acceded to the need for efficiency calculations to be made in value terms rather than using purely natural or engineering criteria, but claimed that these values could emerge without a market for capital goods, and without private ownership of capital. Friedrich Hayek replied stressing the dynamic aspects of competition in the context of the capital market; the latter is to be seen as a discovery procedure wherein production possibilities must not be taken for granted. Thus, socialist calculation is impossible because of the absence of those markets for capital and risk that evaluate the success or failure of different investment decisions under capitalism. Appraising this debate, we emerge with two findings. First, Lange's contribution was based on a one-sided, static conception of the capitalist economy, and therefore of the construction of a socialist alternative. Second, the Austrian approach only surreptitiously concedes the key role of finance in its defence of the dynamic properties of capitalism. And yet it is the very gyrations and instability emerging from the financial sector in capitalism that was one of the central factors motivating the search for an alternative engineering method of allocation in the first place. The latter point invites us to reconsider the place of finance in various schools of economics in mainstream thinking. |
| Keywords: | Lange; von Mises; Hayek; risk; finance |
| JEL: | B24 B25 B26 |
| Date: | 2012–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kngedp:2012_006&r=hpe |
| By: | Dissanayake, D.M.N.S.W. |
| Abstract: | Each and every individual require money not only for day today activities but also for investment needs as well. Having the investment might be the correct explanation for an individual since by this he is able to get the improved life for his prospect. Basically this assessment discusses some theoretical underpinnings of savings and investments. These two notions are topical contexts in behavioral research. Basically the notion of investment theory comprises with theories such as Efficient Market Hypothesis, Greater Fool Theory, Fifty Percent Principle, Odd Lot Theory, Rational Expectations Theory, Prospect Theory (Loss-Aversion Theory), and the Short Interest Theory. Investment strategies can be classified into four categories, namely; the fundamental approach, the psychological approach, the academic approach and the electric approach. A detailed analysis has given pertaining to those approaches. Further a detailed analysis has also given pertaining to the UK tax regime on investments. |
| Keywords: | Investments; Investment theories; Savings; Taxation regime |
| JEL: | E22 O16 H2 |
| Date: | 2012–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40855&r=hpe |
| By: | Sushama Murty (Department of Economics, University of Exeter) |
| Abstract: | We identify the disposability properties of a production technology resulting from the simultaneous play of nature's emission-generating mechanism and the firm's intended production activities. Our axioms define a "by-production" technology (BPT), which has a novel functional representation and can be decomposed into a standard neo-classical intended-production technology and a nature's emission generation set. |
| Keywords: | theory of production, emission-generating production technologies, free input and output disposability, weak disposability, costly disposability, functional representations of multi-output production technologies. |
| JEL: | D20 D24 Q50 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:1202&r=hpe |
| By: | Herrmann-Pillath, Carsten |
| Abstract: | The paper proposes to ground the taxonomy of economic systems on the identification of strongly performative institutions as distinctive features. I analyse performativity on the basis of the Aoki model of institutions, enriched by current approaches to performativity, which I combine with Searle's notion of a status function. Performativity is conceived as resulting from the conjunction of public representations (sign systems) and behavioral dispositions which channel strategic interactions among actors such that certain sets of institutions are reproduced recurrently. I apply this approach on the case of financial capitalism and analyze three strongly performative institutions, the accounting standards (IFRS), managerial incentive systems and intellectual property rights. -- |
| Keywords: | performativity,distributed cognition,status functions,taxonomy of economic systems,financial capitalism |
| JEL: | B41 P00 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:194&r=hpe |
| By: | Kaizoji, Taisei |
| Abstract: | The aim of this paper is to demonstrate that dynamic paths in a model of discrete choice with social interactions, which have been developed by Brock and Durlauf (1999, 2001a, 2001b, 2006), converge some self-consistent equilibrium. To this aim, we propose an asynchronous model of discrete-choice with social interaction2 , in which the only individual selected cyclically is updated. |
| Keywords: | binary choice; social interactions; stability of self-consistent equilibrium; asynchronous model |
| JEL: | D71 C44 C02 C45 C25 D85 |
| Date: | 2012–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38730&r=hpe |
| By: | Philip A. Curry (Department of Economics, University of Waterloo); John E. Roemer (Departments of Political Science and Economics, Yale University) |
| Abstract: | In Nash equilibrium, agents are autarchic in their optimization protocol, whereas in Kantian equilibrium, they optimize in an interdependent way. Typically, researchers into the evolution of homo economicus treat preferences as being determined by selective adaptation, but hold fixed the optimization protocol as autarchic. Here, we ask whether natural selection might choose the optimizing protocol to be either autarchic or interdependent. That is, will Kantian players, for whom the stable concept is Kantian equilibrium drive Nash players (for whom the stable concept is Nash equilibrium) to extinction, or otherwise? The answer depends upon whether players can signal their type to others. |
| JEL: | C73 C62 D64 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1206&r=hpe |
| By: | John Lynham (Department of Economics, University of Hawaii at Manoa, USA) |
| Abstract: | A unique database was created that describes the methods used to allocate shares in nearly every major catch share fishery in the world. The main approaches used to allocate catch shares include: (i) auctions, (ii) equal allocation, (iii) historical catch records and (iv) vessel- or gear-based rules. 54% of the major catch share fisheries in the world allocated the Total Allowable Catch (TAC) on the basis of historical catch records, 3% used auctions, and 6% used equal sharing rules. 37% used a combination of methods, including vessel-based rules. 91% of the fisheries in the database allocated some fraction of the TAC on the basis of historical catch. These results confirm the widely-held belief that nearly all catch share programs have “grandfathered” private access to fishery resources. This publicly available database should be a useful reference tool for policymakers, academics, and others interested in catch shares management in Hawai‘i and across the globe. |
| Keywords: | catch shares, ITQ, allocation, auction |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201219&r=hpe |
| By: | Barbos, Andrei |
| Abstract: | We study an optimal timing decision problem where an agent endowed with a risky investment opportunity trades the benefits of waiting for additional information against a potential loss in first-mover advantage. The players' clocks are de-synchronized in that they learn of the investment opportunity at different times. Previous literature has uncovered an inverted-U shaped relationship between a player's equilibrium expected expenditures and the measure of his competitors. This result no longer holds when the increase in the measure of players leads to a decrease in the degree of clock synchronization in the game. We show that the result reemerges if information arrives only at discrete times, and thus, a player's strategic beliefs are updated between decision times in a measurably meaningful way. |
| Keywords: | Clock Games; Timing Games; Preemption |
| JEL: | D90 D80 |
| Date: | 2012–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40846&r=hpe |
| By: | Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Nielsen, Ulrik H. (University of Copenhagen); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration); Tyran, Jean-Robert (University of Vienna) |
| Abstract: | It has been shown that participants in the dictator game are less willing to give money to the other participant when their choice set also includes the option to take money. We examine whether this effect is due to the choice set providing a signal about entitlements in a setting where entitlements initially may be considered unclear. We find that the share of positive transfers depends on the choice set even when there is no uncertainty about entitlements, and that this choice-set effect is robust across a heterogenous group of participants recruited from the general adult population in Denmark. The findings are consistent with dictator giving partly being motivated by a desire to signal that one is not entirely selfish or by a desire to follow a social norm that is choice-set dependent. |
| Keywords: | Dictator game; motivation; choice |
| JEL: | C91 D63 |
| Date: | 2012–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2012_014&r=hpe |
| By: | Haomiao Yu (Department of Economics, Ryerson University, Toronto, Canada) |
| Abstract: | In this paper, I characterize point-rationalizability in large non-anonymous games with three dierent formulations of societal responses, and also propose an implicit dynamic process that is informed by Guesnerie's eductive notions. Given the introspection and 'mentalizing' that the point-rationalizability notions presuppose, a motivation behind the work is to examine their viability in situations where the terms rationality and full information can be given a more parsimonious, and thereby more analytically viable, expression. |
| Keywords: | Large games, Nash equilibria, point-rationalizability, closed under rational behavior (curb), societal response, distribution, integration, transformed statistics. |
| JEL: | C62 C72 D50 D80 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:rye:wpaper:wp030&r=hpe |
| By: | Erik Stam; Jan Lambooy |
| Abstract: | In this paper we investigate the spatial aspects of the conditions of entrepreneurship on the one hand, and the consequences of entrepreneurship on the other hand. The consequences are the effects of individual interactions that may lead to the emergence of complex systems that are largely the "result of human action, but not of human design" (Hayek, 1967). These emergent systems have spatial coordinates and localized effects on the growth of knowledge and economic activity. The emergent systems - new organizations, institutions, industrial clusters, cities, and regions - in turn form the context for subsequent entrepreneurial actions. We show the strengths and opportunities of Austrian economics for the indeterminate dynamic analysis of entrepreneurship and evolving selection environments, and the spatial aspects of these processes and structures. We explicitly investigate the bridge between evolutionary economic geography and Austrian economics. The paper is structured as follows: in the second section, we introduce Austrian as well as evolutionary geographic treatments of entrepreneurship. In the third section we investigate entrepreneurship and its conditions of space and place. In the fourth section, we elaborate on the urban aspects of the conditions of entrepreneurship as it is approached in evolutionary theories. The fifth section centers on the spatial aspects of the consequences of entrepreneurship, with a particular focus on its impact on urban and regional development. |
| Keywords: | entrepreneurship, space, place, evolutionary economic geography, Austrian economics, regional development |
| JEL: | B52 B53 L26 M13 R11 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1211&r=hpe |
| By: | Johnson, Noel D; Koyama, Mark |
| Abstract: | This paper investigates the relationship between the historical process of legal centralization and increased religious toleration by the state. We develop a model in which legal centralization leads to the criminalization of the religious beliefs of a large proportion of the population. This process initially leads to increased persecution, but, because these persecutions are costly, it eventually causes the state to broaden the standards of orthodox belief and move toward religious toleration. We compare the results of the model with historical evidence drawn from two important cases in which religious diversity and state centralization collided in France: the Albigensian crusades of the thirteenth century and the rise of Protestant belief in the sixteenth century. Both instances sup- port our central claim that the secularization of western European state institutions during the early-modern period was driven by the costs of imposing a common set of legal standards on religiously diverse populations. |
| Keywords: | State Capacity; Religion; Secularization; Heresy; Legal Capacity; France |
| JEL: | H10 Z12 P48 K42 N43 |
| Date: | 2012–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40887&r=hpe |
| By: | Heller, Yuval |
| Abstract: | Experimental evidence suggest that people only use 1-3 iterations of strategic reasoning, and that some people systematically use less iterations than others. In this paper, we present a novel evolutionary foundation for these stylized facts. In our model, agents interact in finitely repeated Prisoner's Dilemma, and each agent is characterized by the number of steps he thinks ahead. When two agents interact, each of them has an independent probability to observe the opponent's type. We show that if this probability is not too close to 0 or 1, then the evolutionary process admits a unique stable outcome, in which the population includes a mixture of “naive” agents who think 1 step ahead, and “sophisticated” agents who think 2-3 steps ahead. |
| Keywords: | Indirect evolution, cognitive hierarchy, bounded forward-looking, Prisoner's Dilemma, Cooperation |
| JEL: | D03 C73 |
| Date: | 2012–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40714&r=hpe |
| By: | Ismayilov, H.; Potters, J.J.M. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: We implement a trust game in which the trustee can write a free-form pre-play message for the trustor. The main twist in our design is that there is a 50% probability that the message is delivered to the trustor and a 50% probability that the message is replaced by an empty sheet. We find that even when messages are not delivered trustees who make a promise are significantly more likely to act trustworthy than those who do not make a promise. This suggests that a promise has a commitment value which is independent of its impact on the trustor. Interestingly, we also find that both trustees who make a promise and those who do not make a promise are more likely to be trustworthy if their message is delivered to the trustor. This means that communication increases trustworthiness irrespective of the content of messages. |
| Keywords: | Promises;communication;trust;beliefs;experimental economics. |
| JEL: | C91 D03 D82 L15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2012064&r=hpe |