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on History and Philosophy of Economics |
| By: | Fehr, Dietmar; Huck, Steffen |
| Abstract: | We introduce the notion of strategic awareness in experimental games which captures the idea that subjects realize they are playing a game and thus have to form beliefs about others' actions in order to play well. The concept differs from both, rule understanding and rationality. We then turn to experimental evidence from a beauty contest game where we elicit measures of cognitive ability and beliefs about others' cognitive ability. We show that the effect of cognitive ability is highly non-linear. Subjects' behavior below a certain threshold is indistinguishable from uniform random play and does not correlate with beliefs about others ability. In contrast, choices of subjects who exceed the threshold avoid dominated choices and react very sensitively to beliefs about others cognitive ability. -- In vielen Situationen spielt das Bewusstsein über strategische Komponenten eine wichtige Rolle. In diesem kurzen Artikel führen wir das Konzept von strategic awareness in Experimenten ein. Dieses neue Konzept beschreibt die Fähigkeit von Experimentteilnehmer, strategische Situationen zu erkennen und daher Erwartungen über das Verhalten von anderen zu bilden. Das Konzept unterscheidet sich sowohl von Rationalität als auch vom bloßen Verstehen von den Regeln eines Experiments. Wir demonstrieren das Konzept empirisch mit Hilfe von Daten eines Beauty Contest Games, in dem wir die kognitiven Fähigkeiten der Teilnehmer und ihre Einschätzungen über die kognitiven Fähigkeiten der anderen Teilnehmer erheben. Die Resultate zeigen, dass kognitive Fähigkeiten einen starken nichtlinearen Effekt auf die Entscheidungen in dem Beauty Contest Game haben. Das Verhalten von Experimentteilnehmer, die unter einer bestimmten Schwelle liegen, kann nicht von zufälligen Entscheidungen unterschieden werden und korreliert auch nicht mit deren Einschätzung über die kognitiven Fähigkeiten der anderen Teilnehmer. Im Gegensatz dazu vermeiden Teilnehmer, die über dieser Schwelle liegen, dominierte Entscheidungen und basieren ihre Entscheidungen auf ihrer Einschätzung über die kognitiven Fähigkeiten der anderen Teilnehmer. |
| Keywords: | strategic awareness,cognitive ability,beauty contest |
| JEL: | C7 C9 D0 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2013306&r=hpe |
| By: | Michalis Drouvelis; Nattavudh Powdthavee |
| Abstract: | What determines people's moral judgments of selfish behaviors? Here we study whether people's normative views in trust and gift exchange games, which underlie many situations of economic and social significance, are themselves functions of positive emotions. We used experimental survey methods to investigate people's moral judgments empirically, and explored whether we could influence subsequent judgments by deliberately making some individuals happier. We found that moral judgments of selfish behaviors in the economic context depend strongly on other people's behaviors, but their relationships are significantly moderated by an increase in happiness for the person making the judgment. |
| Keywords: | Happiness, moral judgments, trust games, gift exchange games |
| JEL: | C91 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1231&r=hpe |
| By: | Heller, Yuval |
| Abstract: | A leading solution concept in the evolutionary study of extensive-form games is Selten's (1983) (selten1983evolutionary) notion of limit ESS. We demonstrate that a limit ESS does not imply neutral stability, and that it may be dynamically unstable (almost any small perturbation takes the population away). These problems arise due to an implicit assumption that “mutants” are arbitrarily rare relative to “trembling” incumbents. Finally, we present a novel definition that solves this issue and has appealing properties. |
| Keywords: | Limit ESS, evolutionary stability, extensive-form games. |
| JEL: | C73 |
| Date: | 2013–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48160&r=hpe |
| By: | Nayan, Sabri; Ahmad, Mahyudin; Kadir, Norsiah; Abdullah, Mat Saad |
| Abstract: | Post Keynesian economics is actually macroeconomics in a world of uncertainty and endogenous money. Post Keynesians posit that money supply in a market oriented production economy is endogenous or endogenously determined (rather than exogenous as claimed by Monetarists). Money supply is said to be endogenous if it is determined within the economic system itself. The present paper investigates this theory using a panel dataset of 177 countries from year 1970-2011 utilising dynamic panel data analysis and has found that money supply is endogenous as proposed by Post Keynesian theorists. |
| Keywords: | Post-Keynesians; Endogeneity; Panel Data Analysis; System GMM. |
| JEL: | E12 E51 |
| Date: | 2013–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48716&r=hpe |
| By: | Kakarot-Handtke, Egmont |
| Abstract: | Neither Walrasians nor Keynesians have a clear idea of the fundamental economic concepts income and profit, nor of the interdependence of qualitatively different markets. Critique of these approaches is necessary but not overly productive. A real breakthrough requires a new set of premises because no way leads from the accustomed behavioral assumptions to the understanding of how the economy works. More precisely, the hitherto accepted behavioral axioms have to be replaced by structural axioms. Starting from new formal foundations, this paper gives a comprehensive and consistent account of the objective interrelations of the monetary economy’s elementary building blocks. |
| Keywords: | new framework of concepts; structure-centric; axiom set; income; profit; full employment; price stability; quantitative adaptation; primary markets; secondary markets; financial markets |
| JEL: | B59 D00 E00 |
| Date: | 2013–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48691&r=hpe |
| By: | Daniel Fujiwara |
| Abstract: | Subjective wellbeing data is becoming increasingly popular in economics research. The wellbeing valuation approach uses wellbeing data instead of data gleaned from preferences to attach monetary values to non-market goods. This method could be an important alternative to preference-based valuation methods such as contingent valuation, but there are a number of significant technical deficiencies with the current methodology. It is argued that the current method derives biased estimates of the value of non-market goods. The paper presents Three-Stage Wellbeing Valuation, a new approach to valuation using subjective wellbeing data that solves for the main technical problems and as a result derives estimates of welfare change and value that are consistent with welfare economic theory. As an example, I derive robust values associated with unemployment using the new approach and compare these to biased values derived from the standard wellbeing valuation method. Values derived from Three-Stage Wellbeing Valuation can be used in cost-benefit analysis. |
| Keywords: | subjective wellbeing, non-market valuation, cost-benefit analysis, unemployment, causal inference |
| JEL: | C39 D6 D61 I31 J68 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1233&r=hpe |
| By: | Schiller-Merkens, Simone |
| Abstract: | One challenge facing research on categories is to explain their content and the extent to which they gain meaning from cultural material that originates from moral arenas. This article suggests that categories are an outcome of strategic framing activities by which market members draw on prevalent master frames as cultural material to infuse an emerging market with meaning. It depicts the construction of a market category that emerges at the boundary between the economic sphere of a market and the moral sphere of social movements. A qualitative study of the use of movement master frames in categorizing the market for ethical fashion in the United Kingdom indicates the important role of movements' cultural legacy for the categorization of a moral market. It shows that the master frame of the environmental movement prevails in market categorization. Furthermore, we see that market members tend to adopt movement frames in categorization to discuss solutions rather than to talk about problems. Two propositions are drawn from these findings. First, when market making happens at the boundary of several social movements, market members adopt the master frame mainly of the movement whose activism has already led to changes in the political agenda, in social beliefs and practices in society. Second, framing tactics change when movement frames leave the moral sphere of activist mobilization and enter the economic sphere. While talking about problems has been shown to be as important as the provision of solutions in the movement arena, providing solutions becomes more important when movement frames are adopted in the economic arena of a market. -- Kategorien sind zentrale Bestandteile der kulturellen Strukturierung von Märkten. Eine der Herausforderungen der Kategorienforschung ist es, die Inhalte von Kategorien zu erklären und herauszufinden, wie stark sie durch moralisch geprägte kulturelle Elemente beeinflusst werden. Das Papier stellt Kategorien als Ergebnis strategischer Rahmungsprozesse (framing) vor, wobei Marktakteure einem entstehenden Markt anhand verbreiteter kultureller Deutungsmuster (master frames) Bedeutung verleihen. Es beschreibt die Konstruktion einer Marktkategorie, die an der Grenze zwischen der ökonomischen Sphäre eines Marktes und der moralischen Sphäre sozialer Bewegungen entsteht. Die am Beispiel des Marktes für ethische Mode in Großbritannien durchgeführte qualitative Untersuchung stellt heraus, wie wichtig das kulturelle Vermächtnis sozialer Bewegungen für die Kategorisierung eines moralisch geprägten Marktes ist. Die Ergebnisse der Untersuchung zeigen einerseits die herausgehobene Bedeutung der Umweltbewegung für die Kategorisierung des Marktes. Sie zeigen andererseits die Tendenz der Marktakteure zu einer eher lösungs-denn problemorientierten Rahmungsaktivität: Die Deutungsrahmen sozialer Bewegungen werden zur Kategorisierung herangezogen, um Lösungsansätze zu diskutieren, weniger jedoch, um die zugrunde liegenden Probleme zu benennen. Aus diesen Ergebnissen werden schließlich zwei Thesen abgeleitet. Erstens: Entstehen neue Märkte an der Grenze zu mehreren sozialen Bewegungen, so übernehmen Marktakteure eher den Deutungsrahmen jener Bewegung, deren Aktivismus die politische Agenda, gesellschaftliche Überzeugungen und Praktiken bereits nachhaltig verändert hat. Zweitens: Die Rahmungstaktiken ändern sich mit dem Wechsel der Bewegungsrahmen von der moralischen Sphäre aktivistischer Mobilisierung in die ökonomische Sphäre. Während zur Mobilisierung von Aktivisten die Problemdiskussion als gleichbedeutend mit der Entwicklung von Lösungsansätzen gewertet wird, gewinnt die Präsentation von Lösungen an Bedeutung, sobald die Bewegungsrahmen in den ökonomischen Bereich eines Marktes übertragen werden. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:138&r=hpe |
| By: | Armenak Antynian (University of Venice); Luca Corazzini (University of Padova); daniel.neururer (University of Innsbruck) |
| Abstract: | We study the interplay between contributions and costly punishment in a linear public good game in which subjects differ in the origin of their endowment: for half of the group members, obtaining the endowment is conditional on succeeding in a real effort task, while for the remaining half, it is exogenously granted. Compared to a benchmark treatment with no real effort task, we find no differences in contributions. However, we detect significant differences in punishment between treatments, with subjects in the benchmark being more inclined to punish non-cooperative behaviors. Moreover, in the treatment with heterogeneity of endowment sources, we find that subjects exerting real effort to earn their endowments assign fewer punishing points than those receiving a windfall endowments. |
| Keywords: | Endowment Origin, Linear Public Good Game, Punishment. JEL: D63, H41, C91, C92. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0169&r=hpe |
| By: | Heller, Yuval; Winter, Eyal |
| Abstract: | We study the strategic advantages of following rules of thumb that bundle different games together (called rule rationality) when this may be observed by one's opponent. We present a model in which the strategic environment determines which kind of rule rationality is adopted by the players. We apply the model to characterize the induced rules and outcomes in various interesting environments. Finally, we show the close relations between act rationality and “Stackelberg stability” (no player can earn from playing first). |
| Keywords: | Bounded Rationality, Commitments, Categorization, Value of information. |
| JEL: | C72 D82 |
| Date: | 2013–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48746&r=hpe |