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on History and Philosophy of Economics |
| By: | Ho Fai Chan; Bruno S. Frey; Jana Gallus; Benno Torgler |
| Abstract: | Despite the social importance of awards, they have been largely disregarded by academic research in economics. This paper investigates whether a specific, yet important, award in economics, the John Bates Clark Medal, raises recipients’ subsequent research activity and status compared to a synthetic control group of nonrecipient scholars with similar previous research performance. We find evidence of positive incentive and status effects that raise both productivity and citation levels. |
| Keywords: | Awards, incentives, research, John Bates Clark Medal, synthetic control method |
| JEL: | A13 C23 M52 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:111&r=hpe |
| By: | Buchholz, Wolfgang; Schymura, Michael |
| Abstract: | The evaluation of long-term effects of climate change in cost-benefit analysis has a long tradition in environmental economics. Since the publication of the Stern Review in 2006 the debate about the appropriate discounting of future welfare and utility levels was revived and the most renowned scholars of the profession participated in this debate. In two recent contributions in Environmental and Resource Economics, there was dispute about intertemporal welfare economics between Partha Dasgupta and John Roemer about the correct interpretation of the topic. The aim of this work is to bring together economic and philosophical reasoning about justice and intergenerational equity in the context of climate change. So we adopt the normative view in order to present the most important ethical issues that, particularly in the context of climate policy, are most relevant for the choice of intertemporal discounting. Subsequently we explore whether ethical considerations may also be helpful to justify pure social discounting per se. -- |
| Keywords: | Intertemporal ethics,Distribution,Discounting,Climate Change |
| JEL: | Q53 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13008&r=hpe |
| By: | Barnett, Andy (Auburn University); Yandle, Bruce (Clemson University); Naufal, George S (American University of Sharjah) |
| Abstract: | Despite being a fixture of everyday life in the Arab world, wasta, which may be thought of as special influence by members of the same group or tribe, has received little attention from social scientists. Our casual empiricism suggests that wasta is an important determinant of how economic activities are organized and resources are allocated in Middle Eastern societies, yet economists, even those who specialize in work related to the Middle East, have not addressed the issue of wasta. With this paper we provide a modest beginning to filling that void. Specifically, we use the history of wasta, Hayek's concept of extended order and Coase's work on the nature of the firm to draw inferences regarding the existence of wasta and its persistence in Arab societies. |
| Keywords: | cronyism, wasta, firm, Hayek, Coase, Middle East, social capital |
| JEL: | D21 K20 N45 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7201&r=hpe |
| By: | Barry Cynamon (Weidenbaum Center on the Economy, Government, and Public Policy, Washington University in St. Louis); Steven Fazzari (Department of Economics, Washington University in St. Louis); Mark Setterfield (Department of Economics, Trinity College) |
| Abstract: | The Great Recession was deep and the subsequent recovery has been slower than most economists predicted. This article summarizes the message of a recent book that presents perspectives from a group of Keynesian economists who warned prior to 2007 of dangerous trends that could lead to these unfavorable outcomes. We discuss how the debt-fueled consumer boom leading up to the Great Recession was unsustainable and how rising inequality has compromised demand generation during the feeble recovery. We conclude the article by considering how public policy must respond in coming years. |
| Keywords: | Great Recession, Great Moderation, economic recovery, Keynesian macroeconomics |
| JEL: | E21 E25 E61 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:tri:wpaper:1303&r=hpe |
| By: | Peter Duersch; Joerg Oechssler; Burkhard Schipper (Department of Economics, University of California Davis) |
| Abstract: | We characterize the class of symmetric two-player games in which tit-for-tat cannot be beaten even by very sophisticated opponents in a repeated game. It turns out to be the class of exact potential games. More generally, there is a class of simple imitation rules that includes tit-for-tat but also imitate-the-best and imitate-if-better. Every decision rule in this class is essentially unbeatable in exact potential games. Our results apply to many interesting games including all symmetric 2x2 games, and standard examples of Cournot duopoly, price competition, public goods games, common pool resource games, and minimum effort coordination games. |
| Keywords: | Imitation, tit-for-tat, decision rules, learning, exact potential games, symmetric games, repeated games, relative payoffs, zero-sum games |
| JEL: | C72 C73 D43 |
| Date: | 2013–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:13-1&r=hpe |
| By: | Kleppe, J.; Reijnierse, J.H.; Sudhölter, P. (Tilburg University, Center for Economic Research) |
| Abstract: | If the excesses of the coalitions in a transferable utility game are weighted, then we show that the arising weighted modifications of the well-known (pre)nucleolus and (pre)kernel satisfy the equal treatment property if and only if the weight system is symmetric in the sense that the weight of a subcoalition of a grand coalition may only depend on the grand coalition and the size of the subcoalition. Hence, the symmetrically weighted versions of the (pre)nucleolus and the (pre)kernel are symmetric, i.e., invariant under symmetries of a game. They may, however, violate anonymity, i.e., they may depend on the names of the players. E.g., a symmetrically weighted nucleolus may assign the classical nucleolus to one game and the per capita nucleolus to another game. We generalize Sobolev’s axiomatization of the prenucleolus and its modification for the nucleolus as well as Peleg’s axiomatization of the prekernel to the symmetrically weighted versions. Only the reduced games have to be replaced by suitably modified reduced games whose definitions may depend on the weight system. Moreover, it is shown that a solution may only satisfy the mentioned sets of modified axioms if the weight system is symmetric. |
| Keywords: | TU game · Nucleolus · Kernel |
| JEL: | C71 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013007&r=hpe |
| By: | Andreas M. Hefti |
| Abstract: | This paper investigates the relationship between uniqueness of Nash equilibria and local stability with respect to the best-response dynamics in the cases of sum-aggregative and symmetric games. If strategies are equilibrium complements, local stability and uniqueness are the same formal properties of the game. With equilibrium substitutes, local stability is stronger than uniqueness. If players adjust sequentially rather than simultaneously, this tends towards making a symmetric equilibria of symmetric games more stable. Finally, the relationship between the stability of the Nash best-response dynamics is compared to the stability of the response-dynamics induced by aggregate-taking behavior. |
| Keywords: | Contraction mapping, stability, uniqueness, aggregate-taking behavior, dominance solvability, symmetric games |
| JEL: | C72 D43 L13 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:112&r=hpe |
| By: | Michael A. Valenti; Olivier G. Giovannoni |
| Abstract: | This paper presents a review of the literature on the economics of shared societies. As defined by the Club de Madrid, shared societies are societies in which people hold an equal capacity to participate in and benefit from economic, political, and social opportunities regardless of race, ethnicity, religion, language, gender, or other attributes, and where, as a consequence, relationships between the groups are peaceful. Our review centers on four themes around which economic research addresses concepts outlined by the Club de Madrid: the effects of trust and social cohesion on growth and output, the effect of institutions on development, the costs of fractionalization, and research on the policies of social inclusion around the world. |
| Keywords: | Shared Societies; Economic Inclusion; Institutions; Economic Growth; Income Distribution |
| JEL: | D31 O11 O43 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_755&r=hpe |
| By: | Bobtcheff, Catherine (Toulouse School of Economics (CNRS, LERNA)); Bolte, Jérôme (Toulouse School of Economics (GREMAQ)); Mariotti, Thomas (Toulouse School of Economics (CNRS, GREMAQ, IDEI)) |
| Abstract: | We model academic competition as a game in which researchers ¯ght for priority. Researchers privately experience breakthroughs and decide how long to let their ideas mature before making them public, thereby establishing priority. In a two-researcher, symmetric environment, the resulting preemption game has a unique equilibrium. We study how the shape of the breakthrough distribution affects equilibrium maturation delays. Making researchers better at discovering new ideas or at developing them has contrasted effects on the quality of research outputs. Finally, when researchers have different innovative abilities, speed of discovery and maturation of ideas are positively correlated in equilibrium. |
| Keywords: | Academic Competition, Preemption Games, Private Information. |
| JEL: | C73 D82 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26783&r=hpe |
| By: | Donald A. R. George (University of Edinburgh) |
| Abstract: | This paper analyses RE macromodels from the methodological perspective. It proposes a particular property, robustness, which should be considered a necessary feature of scienti?cally valid models in economics, but which is absent from many RE macromodels. To restore this property many macroeconomists resort to detailed and implausible assumptions, which take their models a long way from simple Rational Expectations. The paper draws attention to the problems inherent in the technique of local linearisation and concludes by proposing the use of nonlinear models, analysed globally. |
| Date: | 2013–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:217&r=hpe |
| By: | Alaric Bourgoin (Centre de Sociologie de l'Innovation, Mines ParisTech); Nicolas Bencherki (Polytechnic Institute of New York University) |
| Abstract: | Sketches a pragmatist model of authority by studying the case of a consultant faced with the issue of establishing his authority in the actual context of a consulting assignment, and showing how the consultant invokes various “figures” that lend weight to his actions. |
| Keywords: | authority; boundaries; consultancy; ethnography; client relationship |
| JEL: | M14 M42 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:emn:wpaper:029&r=hpe |
| By: | David Pontille (Centre de Sociologie de l'Innovation, Mines ParisTech); Didier Torny (Risques, Travail, Marchés, État (RiTME), INRA (UR 1323)) |
| Abstract: | From a perspective informed by science and technology studies, the authors propose to establish a general diagnosis on the regulation of publication practices and suggest methods of analysis by drawing on old and recent cases that have been questionning research integrity. |
| Keywords: | science and technology studies; sciences; research; researcher; article; journal; peer-reviewing; prevention; biomedical information; reliability |
| JEL: | I28 I15 Z13 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:emn:wpaper:031&r=hpe |
| By: | Nina Boyarchenko; Mario Cerrato; John Crosby; Stewart Hodges |
| Abstract: | Faced with the problem of pricing complex contingent claims, an investor seeks to make his valuations robust to model uncertainty. We construct a notion of a model- uncertainty-induced utility function and show that model uncertainty increases the investor's effective risk aversion. Using the model-uncertainty-induced utility function, we extend the "No Good Deals" methodology of Cochrane and Saa-Requejo [2000] to compute lower and upper good deal bounds in the presence of model uncertainty. We illustrate the methodology using some numerical examples. |
| Keywords: | Asset pricing theory; Good deal bounds; Knightian uncertainty; Model uncertainty; Contingent claim pricing. model-uncertainty-induced utility function |
| JEL: | G12 G13 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2013_04&r=hpe |
| By: | Haas, Armin; Onischka, Mathias; Fucik, Markus |
| Abstract: | In the past decades, risk management in the financial community has been dominated by data-intensive statistical methods which rely on short historical time series to estimate future risk. Many observers consider this approach as a contributor to the current financial crisis, as a long period of low volatility gave rise to an illusion of control from the perspectives of both regulators and the regulated. The crucial question is whether there is an alternative. There are voices which claim that there is no reliable way to detect bubbles, and that crashes can be modeled as exogenous black swans. Others claim that dragon kings, or crashes which result from endogenous dynamics, can be understood and therefore be predicted, at least in principle. The authors suggest that the concept of Bayesian risk management may efficiently mobilize the knowledge, comprehension, and experience of experts in order to understand what happens in financial markets. -- |
| Keywords: | risk management,financial market regulation,Bayesian inference,Black Swan,risk assessment |
| JEL: | C11 G32 D81 G18 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201311&r=hpe |
| By: | Mearsheimer, John J. (University of Chicago); Walt, Stephen M. (Harvard University) |
| Abstract: | Theory creating and hypothesis testing are both important elements of social science. Unfortunately, in recent years the balance between theory creation/refinement and the testing of empirical hypotheses has shifted sharply toward the latter. This trend is unfortunate, because insufficient attention to theory can lead to misspecified models and overreliance on misleading measures of key concepts. In addition, the poor quality of much of the data in IR makes it less likely that these efforts will produce useful cumulative knowledge. The shift away from theory and towards hypothesis testing is due mostly to the professionalization of academia, and this trend is likely to continue unless there is a collective decision to alter prevailing academic incentives. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp13-001&r=hpe |