nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2013‒08‒16
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. The Money of the Mind and the God of Commodities – The real abstraction according to Sohn-Rethel By Cardoso Machado, Nuno Miguel
  2. A Modern Postmodern Urbanism The Systemic Retroactive game (SyR) between Bottom-up and Top-down By D'Acci, Luca
  3. A Reformulation of Libertarian Paternalism By Guilhem Lecouteux
  4. Macro and Micro Spatial Equilibrium By D'Acci, Luca
  5. Reciprocity as an individual difference By Kurt A. Ackermann; Jürgen Fleiß; Ryan O. Murphy
  6. The Objective Benefits of Subjective Well-Being By Jan-Emmanuel De Neve; Ed Diener; Louis Tay; Cody Xuereb
  7. Pre-Reformation Roots of the Protestant Ethic By Andersen, Thomas Barnebeck; Bentzen, Jeanet; Dalgaad, Carl-Johan; Sharp, Paul
  8. What Does the 1930s’ Experience Tell Us about the Future of the Eurozone? By Crafts, Nicholas
  9. Econophysics Research in India in the last two Decades By Asim Ghosh
  10. The Economics of First-Contract Mediation By Dobbelaere, Sabien; Luttens, Roland Iwan
  11. Mean Field Games and Systemic Risk By Rene Carmona; Jean-Pierre Fouque; Li-Hsien Sun

  1. By: Cardoso Machado, Nuno Miguel
    Abstract: According to Sohn-Rethel there is a “secret identity” between commodity form and thought form. Commodity exchange is a real abstraction – embodied in money – and constitutes a social a priori which reflects itself in the conceptual abstraction, i.e., in the abstract thought typical of commodity-producing societies: philosophy (in ancient Greece) and modern science (in capitalism). However, the theory of Sohn-Rethel has a fundamental flaw: its exclusive identification of the real abstraction with the sphere of circulation results in the ontologization of labor which, on the contrary, is a capitalist specificity and the original source of the abstraction in this society.
    Keywords: Sohn-Rethel, real abstraction, commodity form, thought form
    JEL: A11 A12 A13 B24 B31 B41 P1 P10 P51
    Date: 2013
  2. By: D'Acci, Luca
    Abstract: These couple of pages discuss upon the retroactive influence (Systemic Retroactive game, or SyR) between people’s behaviour and environment. The latter is intended as physical environment (type of cities, climate, geography…), normative environment (laws), moral environment (religions, families cultures), values and life styles (politics-economics systems, families and neighbourhood habits). Individual behaviours can generate an emergent phenomenon (Autonomous Post-Emergence, or APE) which becomes ‘independent’ from them even if maintained and changeable from them, and which influences (top-down feedback) the individual behaviours, which influence it, which influences them, which influence it... Market-economy, globalization, religions, cities, political-economics systems, are example of APE. The characters of people and societies are built throughout history by an interconnected mix among geography, climate, trades and chance: all together create a specific economic-moral-religious-political system rather than another, therefore the APE is born and starts its SyR dance with its own creators: is Consumerism created by our consumption needs, or are our consumption needs created by Consumerism? Do religions and political-economic systems create our personal values and uses, or vice versa? In a certain way, it is a mix of both: the APE and its agents influence and mutually change each other in their SyR dance-tension: urbs is the physical result of civitas; in turn urbs influences civitas which influences urbs… The discussion ends by defining a Modern Postmodern vision, mixing the positive contributions of both bottom-up (Postmodern) and top-down (Modern) philosophies.
    Keywords: Complex Systems, Modern Postmodernism, Bottom-up, Top-down, City, Modern Postmodern Urbanism.
    JEL: C70 D01 D03 D70 O18 O20 O21 R00 R14 R38 R50 R52 R58
    Date: 2013–08–03
  3. By: Guilhem Lecouteux (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)
    Abstract: Conventional normative economics is built on the assumption that people act as if seeking to satisfy coherent and a priori preferences. This model has however been challenged by many empirical works highlighting the existence of systematic deviations from the behaviour predicted by the neoclassical theory. The development of behavioural economics therefore questions the validity of the results developed by normative economists. Reconciling behavioural and normative economics needs in particular a clarification of the normative content of economic prescriptions, since it appears that the assumption of rational preferences enabled economists to overstep this question, the different interpretations of the current normative criterion of preference-satisfaction leading in fine to the same prescriptions. In this paper, we want to highlight that libertarian paternalism is probably the most natural solution to the reconciliation problem for neoclassical economists, since its current formulation relies on the existence of a rational homo oeconomicus trapped within each individual. We can however find within the current formulation of libertarian paternalism the same difficulties than the ones of Pareto's theory of the homo oeconomicus. We therefore suggest a reformulation of libertarian paternalism based on a normative criterion of individual autonomy rather than preference-satisfaction, and defend its relevance in the specific context of common-pool resources, by showing that the normative prescriptions generated by our principle of individual autonomy present strong similarities with the institutional design principles of Ostrom (1990) enabling a sustainable management of common-pool resources.
    Keywords: welfare economics, libertarian paternalism, homo oeconomicus, nudge, autonomy, common-pool resources
    Date: 2013–08–07
  4. By: D'Acci, Luca
    Abstract: These pages briefly mention the assumption of indifference between residing in different locations which is embodied in spatial equilibrium. Sometimes, for a person, a pure indifference may result, namely gains and costs (monetary or not) are entirely compensated among locations; but sometimes not, and decisions are made on the basis of an overall gain, which implies that locations are not so indifferent for a specific person, even if they appear in equilibrium from a theoretical point of view. The reasoning ends by proposing the Macro Spatial Equilibrium and the Micro (or Subjective) Spatial Equilibrium.
    Keywords: Cities, Spatial Equilibrium, Urban Economics, Personal Isobenefit Lines, Property Value, Location Decisions, Subjective Spatial Equilibrium.
    JEL: A10 A12 A14 D1 R0
    Date: 2013–08–01
  5. By: Kurt A. Ackermann (Chair of Decision Theory and Behavioral Game Theory, ETH Zurich); Jürgen Fleiß (Institute of Statistics and Operations Research, Karl-Franzens-University Graz); Ryan O. Murphy (Chair of Decision Theory and Behavioral Game Theory, ETH Zurich)
    Abstract: There is accumulating evidence that decision makers are sensitive to the distribution of resources among themselves and others, beyond what is expected from the predictions of narrow self-interest. These social preferences are typically conceptualized as being static and existing independently of information about the other people influenced by a DM’s allocation choices. In this paper we consider the reactivity of a decision makers’s social preferences in response to information about the intentions or past behavior of the person to be affected by the decision maker’s allocation choices (i.e., how do social preferences change in relation to the other’s type). This paper offers a conceptual framework for characterizing the link between distributive preferences and reciprocity, and reports on experiments in which these two constructs are disentangled and the relation between the two is characterized.
    Date: 2013–08–06
  6. By: Jan-Emmanuel De Neve; Ed Diener; Louis Tay; Cody Xuereb
    Abstract: The aim of this paper is to survey the "hard" evidence on the effects of subjective well-being. In doing so, we complement the evidence on the determinants of well-being by showing that human well-being also affects outcomes of interest such as health, income, and social behaviour. Generally, we observe a dynamic relationship between happiness and other important aspects of our lives, with influence running in both directions.
    Keywords: Unemployment, aggregate demand, matching frictions
    JEL: E10 E30 E24 E21
    Date: 2013–08
  7. By: Andersen, Thomas Barnebeck (University of Southern Denmark); Bentzen, Jeanet (University of Copenhagen); Dalgaad, Carl-Johan (University of Copenhagen); Sharp, Paul (University of Southern Denmark)
    Abstract: We hypothesize that cultural appreciation of hard work and thrift,the Protestant ethic according to Max Weber,had a pre-Reformation origin.The proximate source of these values was,according to the proposed theory,the Catholic Order of Cistercians.In support,we first document an impact from the Order on growth within the epicenter of the industrial revolution;English counties that were more exposed to Cistercian monasteries experienced faster productivity growth from the 13th century onwards. Consistent with a cultural influence,this impact is also found after the monasteries were dissolved in the 1530s.Second,we find that the values emphasized by Weber are relatively more pervasive in European regions where Cistercian monasteries were located historically,and that the legacy of the Cistercianscan be detected inpresent-day employment rates across European sub-regions.
    Keywords: Cultural values;Protestant ethic;Economic development
    Date: 2013
  8. By: Crafts, Nicholas (University of Warwick)
    Abstract: If the Eurozone follows the precedent of the 1930s, it will not survive. The attractions of escaping from the gold standard then were massive and they point to a strategy of devalue and default for today’s crisis countries. A fully-federal Europe with a banking union and a fiscal union is the best solution to this problem but is politically infeasible. However, it may be possible to underpin the Euro by a ‘Bretton-Woods compromise’ that accepts a retreat from some aspects of deep economic integration since exit entails new risks of financial crisis that were not present eighty years ago.
    Keywords: economic disintegration; Eurozone; financial repression; gold standard; macroeconomic trilemma; political trilemma
    Date: 2013
  9. By: Asim Ghosh
    Abstract: We discuss here researches on econophysics done from India in the last two decades. The term `econophysics' was formally coined in India (Kolkata) in 1995. Since then many research papers, books, reviews, etc. have been written by scientists. Many institutions are now involved in this research field and many conferences are being organized there. In this article we give an account (of papers, books, reviews, papers in proceedings volumes etc.) of this research from India.
    Date: 2013–07
  10. By: Dobbelaere, Sabien (VU University Amsterdam); Luttens, Roland Iwan (Ghent University)
    Abstract: This paper provides an economic foundation for non-binding mediation to stimulate first collective bargaining agreements, as implemented in British Columbia since 1993. We show that the outcome of first-contract mediation is Pareto efficient and proves immune to the insider-outsider problem of underhiring. We also demonstrate that equilibrium wages and profits under mediation coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.
    Keywords: BC first-contract model, mediation, collective bargaining, union, non-binding contract
    JEL: C71 J51 L20 K12
    Date: 2013–07
  11. By: Rene Carmona; Jean-Pierre Fouque; Li-Hsien Sun
    Abstract: We propose a simple model of inter-bank borrowing and lending where the evolution of the log-monetary reserves of $N$ banks is described by a system of diffusion processes coupled through their drifts in such a way that stability of the system depends on the rate of inter-bank borrowing and lending. Systemic risk is characterized by a large number of banks reaching a default threshold by a given time horizon. Our model incorporates a game feature where each bank controls its rate of borrowing/lending to a central bank. The optimization reflects the desire of each bank to borrow from the central bank when its monetary reserve falls below a critical level or lend if it rises above this critical level which is chosen here as the average monetary reserve. Borrowing from or lending to the central bank is also subject to a quadratic cost at a rate which can be fixed by the regulator. We solve explicitly for Nash equilibria with finitely many players, and we show that in this model the central bank acts as a clearing house, adding liquidity to the system without affecting its systemic risk. We also study the corresponding Mean Field Game in the limit of large number of banks in the presence of a common noise.
    Date: 2013–08

This nep-hpe issue is ©2013 by Erik Thomson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.