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on History and Philosophy of Economics |
| By: | Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | In cooperative games, the core is the most popular solution concept, and its properties are well known. In the classical setting of cooperative games, it is generally assumed that all coalitions can form, i.e., they are all feasible. In many situations, this assumption is too strong and one has to deal with some unfeasible coalitions. Defining a game on a subcollection of the power set of the set of players has many implications on the mathematical structure of the core, depending on the precise structure of the subcollection of feasible coalitions. Many authors have contributed to this topic, and we give a unified view of these different results. |
| Keywords: | TU-game; Solution concept; Core; Feasible coalition; Communication graph; Partially ordered set |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00803233&r=hpe |
| By: | Da Silva, Sergio |
| Abstract: | Group thinking is the notion that animals do those things that maximize the chance of survival of their species. It is wrong because natural selection does not favor what is good for the group or the species; it favors what is good for the individual. Here, I show through examples how group thinking also pervades economics. In connection with the fallacy of group thinking, I also discuss how economics fails to ground itself in the underlying knowledge provided by biology. I also argue that economists need to redirect their conventional approach to study group behavior. Current macroeconomics is reductionist while the route followed by biology, physics, and chemistry was to resort to a different approach when focusing on macro systems made up of a large number of heterogeneous micro units. The group level pattern self-organizes as it is not encoded directly in the individual-level rules. And here the right mathematical models can help deduce hidden connections between the interactions of individuals and the patterns that emerge at the group level. |
| Keywords: | group thinking, biology, economics |
| JEL: | B41 D7 Y8 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:45660&r=hpe |
| By: | KOHLER, Stefan |
| Abstract: | Two deviations of alternating-offer bargaining behavior from economic theory are observed together, yet have been studied separately. Players who could secure themselves a large surplus share if bargainers were purely self-interested incompletely exploit their advantage. Delay in agreement occurs even if all experimentally controlled information is common knowledge. This paper rationalizes both regularities coherently by modeling heterogeneous social preferences, either self-interest or envy, of one bargaining party as private information in a three period game of bargaining and preference screening and signaling. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:euiflo:urn:hdl:1814/23782&r=hpe |
| By: | Francoise Forges (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - CNRS : UMR7534 - Université Paris IX - Paris Dauphine, LEDa - Laboratoire d'Economie de Dauphine - Université Paris IX - Paris Dauphine); Antoine Salomon (LEM - Laboratoire d'Économie Moderne - Université Paris II - Panthéon-Assas : EA4442) |
| Abstract: | We consider Bayesian games, with independent private values, in which uniform punishment strategies are available. We establish that the Nash equilibria of the Bayesian infinitely repeated game without discounting are payoff equivalent to tractable separating (i.e., completely revealing) equilibria and can be achieved as interim cooperative solutions of the initial Bayesian game. We also show, on a public good example, that the set of Nash equilibrium payoffs of the undiscounted game can be empty, while limit Nash equilibrium payoffs of the discounted game, as players become infinitely patient, do exist. |
| Keywords: | Bayesian game, incentive compatibility, independent private values, individual rationality, infinitely repeated game, public good |
| Date: | 2013–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00803919&r=hpe |
| By: | Georg Schwesinger (University of Bremen) |
| Abstract: | This paper sheds new light on the concept of selection in evolutionary economics. The interpretation of natural evolution has experienced significant changes in the last decades, while these developments have been often ignored by economists. This is especially true for the concept of selection, a key concept in many evolutionary approaches. In economics as well as in biology, selection is seen as a central mechanism, which mediates for example the spread of information and innovation, the coordination of groups of agents and the optimization of their behavior. In this article we are aiming to explore the actual significance of selection as a major explanatory principle in economics. Starting with an analysis of a modern and modified understanding of the selection mechanism in nature we will draw some conclusions for its use in economics. |
| Keywords: | Selection, Bioeconomics, Evo-Devo, Cultural Evolution, Multilevel Selection, Economic Theory |
| JEL: | B15 B40 B52 D03 |
| Date: | 2013–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-014&r=hpe |
| By: | Nicholas Stern |
| Abstract: | The principal purpose of this paper is to set out a framework for combining economic and ethical analyses of climate change in the context of the science. The science of climate change indicates thatbusiness-as-usual implies substantial risks of temperatures not seen on the planet for tens of millions of years, with consequences that could lead to the movement of hundreds of millions of people and thus possibly severe and prolonged conflict. Risks on this scale take us far outside the familiar policy questions and standard, largely marginal, techniques commonly used by economists; they raise deep questions about ethical perspectives beyond those traditionally captured in analyses of Pareto efficiency or social welfare functions. Climate change is absolutely central to economic policy-making around the world and we must therefore ask carefully how we can put economics and ethics to work to tackle the questions posed by the science and by our past, current and future patterns of economic growth and emissions. |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp84&r=hpe |
| By: | Hadrien Gouze (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | Dans Un nouveau modèle économique (1999a), Sen déclare : "Si les mérites du marché sont aujourd'hui largement reconnus, les raisons pour lesquelles nous souhaitons son existence ne sont pas assez expliquées" (Sen, 1999a, p. 154). Cette phrase contient deux aspects. D'une part, la première partie, qui donne un jugement plutôt favorable au marché, peut paraître étonnante au regard de la volonté de Sen de proposer une voie alternative à l'économie traditionnelle en prônant la "nécessité d'un examen critique du rôle des marchés" (op.cit., p. 168). D'autre part, la deuxième partie de la phrase identifie un manque : celui de la justification des raisons pour lesquelles nous recourrons au marché. C'est pour cela que Sen établit un argumentaire pour justifier le recours au mécanisme de marché concurrentiel dans l'analyse économique. En fait, les deux aspects de cette phrase peuvent être traités et analysés de manière complémentaire. L'argumentation de Sen pour justifier l'existence et le recours au marché se scinde en deux : d'une part, le marché est justifié par Sen au sein d'une argumentation de philosophie politique directement inspirée de Smith (1776) pour le penchant à l'échange, de Marx (1867) pour qui l'apparition du contrat de travail est constitutif de la liberté des individus d'entrer sur le marché du travail et de Hayek (1944) condamnant le planisme et l'absence de marchés ; d'autre part, Sen se fonde sur une justification purement économique autour des deux "théorèmes de l'économie du bien-être". Ce deuxième volet de l'argumentation contraste avec le premier dans la mesure où le marché n'est plus vu comme la possibilité de satisfaire le simple désir de participer à un échange mais comme la possibilité d'aboutir à une situation optimale au sens de Pareto. Ces deux volets participent d'une démarche sénienne consistant à "faire discuter l'économie et la philosophie ou l'éthique" (Bonvin et Farvaque, 2008, p. 17). En effet, cette séparation entre deux volets d'argumentation n'est que formelle car Sen va les allier au sein d'un raisonnement consistant à démontrer qu'il est possible d'aboutir à une situation qui soit optimale au sens de Pareto, non pas en termes d'utilités mais de libertés. Sen intègre de cette manière la liberté, correspondant à ce qu'il appelle le versant éthique de l'économie, à un raisonnement économique, correspondant au versant mécaniste de l'économie. Sen propose donc une manière originale d'articuler sa conception de la justice et l'efficacité marchande. La question qui se pose est donc celle de savoir de quelle manière Sen opère cette articulation et comment il se place vis-à-vis de traditions antérieures de conciliation entre justice et marché. Notre démarche consiste donc à suivre la manière dont Sen entend concilier la justice et l'efficacité et à la comparer à d'autres conceptions telles que celles de Walras, de Arrow et Debreu (auteurs auxquels Sen se réfère explicitement) et de Varian (avec la justice comme non-envie). |
| Keywords: | Amartya Sen, marché financier |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:dumas-00802133&r=hpe |
| By: | Paul Fourchard (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | Dans le chapitre dix-neuf de la Théorie générale, Keynes justifie l'hypothèse de rigidité nominale présente dans le reste de son ouvrage en fournissant des arguments visant à démontrer que la flexibilité des salaires ne permet pas à l'économie d'atteindre le plein-emploi. Les arguments fournis par Keynes dans ce chapitre sont de nature dynamiques et Tobin, dans son article "Keynesians models of recession and depression" défend l'idée que le meilleur moyen de rendre compte de la théorie de Keynes est de le faire dans un cadre de "déséquilibre dynamique" qui vise à montrer que les mécanisme d'ajustements marchands ne permettent pas de résorber une situation de déséquilibres et de chômage (Tobin, 1975). L'objectif de notre mémoire est de montrer qu'il est également possible d'adopter une telle optique à l'égard de certaines analyses de Kalecki. Nous voudrions faire apparaître le fait qu'il existe dans l'oeuvre de Kalecki une théorie originale de la dynamique de l'emploi et des salaires, qui se construit progressivement au cours des années 1930 et 1940. L'idée que la flexibilité des salaires ne permet pas d'assurer la stabilité du plein emploi, dont nous verrons qu'elle est présente chez Kalecki dès 1932 bien qu'il ne la démontre rigoureusement qu'en 1944, est étroitement liée, comme chez Keynes, à la justification de l'hypothèse de rigidité nominale des salaires. Cette hypothèse est présente dans l'ensemble de la théorie de la demande effective et des cycles de Kalecki (Assous et Lopez, 2007). Nous verrons en effet que ce dernier considère, comme Keynes, que la rigidité nominale des salaires ne saurait être une cause du chômage, mais qu'elle est au contraire un remède à un chômage encore plus élevé et un moyen de stabiliser l'économie autour d'un certain niveau d'emploi. |
| Keywords: | Michał Kalecki, plein emploi, système de paiement des salaires |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:dumas-00802131&r=hpe |
| By: | Färe, Rolf (Dept. of Economics, Oregon State University); Grosskopf, Shawna (Dept. of Applied Economics, Oregon State University); Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics); Marklund, Per-Olov (CERUM); Zhou, Wenchao (CERUM) |
| Abstract: | The production of desirable (good) outputs is frequently accompanied by unintended production of undesirable (bad) outputs. If two or more of these undesirable outputs are produced as byproducts, one may ask: ‘Which bad is worst?’ By worst we mean which bad inhibits the production of desirable outputs the most if it is regulated. We develop a model based on Leif Johansen’s capacity framework by estimating the capacity limiting effect of the bads. Our model resembles what is referred to as the von Liebig Law of the Minimum, familiar from the agricultural economics literature. To illustrate our model we apply our approach to a firm level data set from the Swedish paper and pulp industry. |
| Keywords: | von Liebig Law of the Minimum; DEA; emissions; regulation |
| JEL: | D24 Q01 Q50 |
| Date: | 2013–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2013_002&r=hpe |
| By: | Konrad, Kai A.; Kovenock, Dan |
| Abstract: | We study an all-pay contest with multiple identical prizes ("lifeboat seats"). Prizes are partitioned into subsets of prizes ("lifeboats"). Players play a twostage game. First, each player chooses an element of the partition ("a lifeboat"). Then each player competes for a prize in the subset chosen ("a seat"). We characterize and compare the subgame perfect equilibria in which all players employ pure strategies or all players play identical mixed strategies in the first stage. We find that the partitioning of prizes allows for coordination failure among players when they play nondegenerate mixed strategies and this can shelter rents and reduce rent dissipation compared to some of the less efficient pure strategy equilibria. |
| Keywords: | all-pay contest; multiple prizes; rent dissipation; lifeboat |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenar:13962&r=hpe |
| By: | Ngo Van Long; Fabien Prieur; Klarizze Puzon; Mabel Tidball |
| Abstract: | We propose a new methodology exploring Markov perfect equilibrium strategies in differential games with regime switching. Speciffically, we develop a general game with two players having two kinds of strategies. Players choose an action that in fluences the evolution of a state variable, and decide on the switching time between alternative and consecutive regimes. Compared to the optimal control problem with regime switching, necessary optimality conditions are modiffied for the first-mover. When choosing her optimal switching strategy, this player considers her impact on the other player's actions and welfare, vice versa. In order to deter- mine the optimal timing between regime changes, the notion of erroneous timing is introduced and necessary conditions for a particular timing to be erroneous are derived. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:13-06&r=hpe |
| By: | Gurdal, Mehmet Y.; Ozdogan, Ayca; Saglam, Ismail |
| Abstract: | Recent experimental studies find excessive truth-telling and excessive trust in one sender/one receiver cheap talk games with an essentially unique and babbling equilibrium. We extend this setup by adding a second sender into the play and study the behavior of the players both theoretically and experimentally. We examine games where senders are assumed to communicate with the receiver either simultaneously or sequentially as well as a game where the receiver chooses one of these two communication methods. The theoretical predictions for truth-telling, non-conflicting messages observed and trust frequencies are the same for both the simultaneous and sequential plays; however, we observe systematic differences between the treatments of these plays. While the truth-telling frequencies stay above the theoretical prediction of the one half during all the experiments, the nature of truth-telling seems to differ between sequential and simultaneous plays. Under simultaneous communication, the messages of senders are non-conflictive more than half of the time, while the non-conflicting messages are significantly more likely to be correct than not. The frequency of non-conflicting messages is lower under sequential plays due to the tendency of the second sender to revert the message of the first sender. We observe that subjects who prefer to get non-conflicting messages prefer simultaneous mode of communication more often. When acting as senders, these subjects also adjust their truth-telling frequencies so as to generate conflictive messages. |
| Keywords: | Strategic information transmission; truth-telling; trust; sender-receiver game. |
| JEL: | C72 C90 D83 |
| Date: | 2013–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:45727&r=hpe |
| By: | Pierre Dockès (TRIANGLE - Triangle : action, discours, pensée politique et économique - CNRS : UMR5206 - Université Lumière - Lyon II - Institut d'Études Politiques [IEP] - Lyon - École Normale Supérieure - Lyon - Université Jean Monnet - Saint-Etienne) |
| Abstract: | Dès le début des années 1970, Charles Albert Michalet analysait les firmes multinationales et leur rôle dans la mondialisation, et en 1976 paraissait Le capitalisme mondial aux Presses universitaires de France. Dans l'esprit du temps, il avait alors repensé de façon critique les grandes thèses de l'impérialisme pour tester leur adéquation aux transformations en cours. Dès 2002, dans Qu'est-ce que la mondialisation, et surtout en 2007, dans Mondialisation, la grande rupture, Charles Albert Michalet avait eu l'intuition de ce qu'il nommait " l'impérialisme à l'envers ", celui de jeunes économies émergentes, par une forme de " dialectique du maître et de l'esclave " inspirée de Hegel. C'est ce concept d' " impérialisme à l'envers " que nous explorons de nouveau ici, en l'illustrant notamment par l'étude du cas de la Chine d'aujourd'hui. |
| Keywords: | mondialisation ; capitalisme ; |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00794613&r=hpe |
| By: | Ali Kabiri |
| Abstract: | The NYSE boom of the 1920s ended with the infamous crash of October 1929 and subsequent collapse in common stock prices from 1929-1932. Most approaches have suggested an overvaluation of 100%, usually dating from mid-1927 to September 1929.Excessive speculation based on high real earnings growth rates from 1921-8, amid a euphoric “new age” for the US economy, has been given as the cause. However, the 1920s witnessed the emergence of new ideas emanating from new research on the long-term returns to common stocks (Smith, 1924). The research identified a large premium on common stocks held over the long term compared to corporate bonds. This, in turn led to the formation of new investment vehicles that aimed to hold diversified stock portfolios over the long run in order to earn the large equity risk premium. Whilst such an approach was capable of earning substantial excess returns over bonds, new ideas derived from the research led to a change in stock valuations. The paper reconstructs fundamental values of NYSE stocks from long run dividend growth and stock volatility data, and demonstrates why such a change in theoretical values was unjustified. Investors switched to valuing stocks according to a new theory, which ignored the compensation for stock return volatility, which made up the Equity Risk Premium (ERP), on the assumption that “retained earnings” were the source of the observed ERP. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgsps:sp218&r=hpe |