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on History and Philosophy of Economics |
| By: | Larry G. Epstein (Department of Economics, Boston University); Kyoungwon Seo |
| Abstract: | We generalize de Finetti’s exchangeable Bayesian model to accommodate ambiguity. As a central motivating example, we consider a policy maker facing a cross-section of markets in which …rms play an entry game. Her theory is Nash equilibrium and it is incomplete because there are multiple equilibria and she does not understand how equilibria are selected. This leads to partial identi…cation of parameters when drawing inferences from realized outcomes in some markets and to ambiguity when considering (policy) decisions for other markets. We model both her inference and choice. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2013-001&r=hpe |
| By: | Sergiu Hart; Andreu Mas-Colell |
| Abstract: | Inspired by the existing work on correlated equilibria and regret-based dynamics in games, we carry out a first exploration of the links between the leading equilibrium concept for (exchange) economies, Walrasian equilibrium, and the dynamics, specifically regret-matching dynamics, of trading games that fit the economic structure and have the property that their pure Nash equilibria implement the Walrasian outcomes. Interestingly, in the case of quasilinear utilities (or "transferable utility"), all the concepts essentially coincide, and we get simple deterministic dynamics converging to Walrasian outcomes. Connections to sunspot equilibria are also studied. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp648&r=hpe |
| By: | Laurent Lehmann; Georg Nöldeke; Jorge Peña (University of Basel) |
| Abstract: | In this paper we unify, simplify, and extend previous work on the evolutionary dynamics of symmetric N-player matrix games with two pure strategies. In such games, gains from switching strategies depend, in general, on how many other individuals in the group play a given strategy. As a consequence, the gain function determining the gradient of selection can be a polynomial of degree N-1. In order to deal with the intricacy of the resulting evolutionary dynamics, we make use of the theory of polynomials in Bernstein form. This theory implies a tight link between the sign pattern of the gains from switching on the one hand and the number and stability properties of the rest points of the replicator dynamics on the other hand. While this relationship is a general one, it is most informative if gains from switching have at most two sign changes, as it is the case for most multi-player matrix games considered in the literature. We demonstrate that previous results for public goods games are easily recovered and extended using this observation. Further examples illustrate how focusing on the sign pattern of the gains from switching obviates the need for a more involved analysis. |
| Keywords: | evolutionary game theory, multi-player matrix games, replicator dynamics, public goods games, gains from switching, polynomials in Bernstein form 2 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2013/13&r=hpe |
| By: | Andrei Kirilyuk (Solid State Theory Department - Institute of Metal Physics of the National Academy of Sciences of Ukraine) |
| Abstract: | We analyse the unreduced, nonperturbative dynamics of an arbitrary many-body interaction process with the help of the generalised effective potential method and reveal the well-specified universal origin of change (emergence), time and evolution in an a priori conservative, time-independent system. It appears together with the universal dynamic complexity definition, where this unified complexity conservation and transformation constitutes the essence of evolution. We then consider the detailed structure of this universal evolutionary process showing its step-wise, "punctuated" character, now provided with the exact mathematical description. Comparing the expected features of a revolutionary complexity transition near a step-like complexity upgrade with the currently observed behaviour of world's social and economic systems, we prove the necessity of complexity revolution towards the superior civilisation level of well-defined nature, the only alternative being an equally dramatic and irreversible degradation, irrespective of efforts applied to stop the crisis at the current totally saturated complexity level. |
| Keywords: | complexity; chaos; self-organisation; fractal; many-body problem; origin of time; revolution of complexity |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00760100&r=hpe |
| By: | Einy, E; Haimanko, O; Moreno, D; Sela, A; Shitovitz, B |
| Abstract: | Under standard assumptions about players’ cost functions, we show that a Tullock contest with asymmetric information has a pure strategy equilibrium. Moreover, when players have a common value and a common state independent linear cost function, a two player Tullock contest in which one player has an information advantage has a unique equilibrium. In this equilibrium both players exert the same expected effort, although the player with information advantage has a greater payoff and wins the prize less frequently than his opponent. When there are more than two players in the contest, an information advantage leads to higher payoffs, but the other properties of equilibrium no longer hold. |
| JEL: | C72 D44 D82 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:econdp:2013-11&r=hpe |
| By: | Stiglitz, Joseph E.; Yifu, Justin; Monga, Celestin |
| Abstract: | This essay is about an important area in which there has been major rethinking -- industrial policy, by which the authors mean government policies directed at affecting the economic structure of the economy. The standard argument was that markets were efficient, so there was no need for government to intervene either in the allocation of resources across sectors or in the choices of technique. And even if markets were not efficient, governments were not likely to improve matters. But the 2008-2009 global financial crisis showed that markets were not necessarily efficient and, indeed, there was a broad consensus that without strong government intervention -- which included providing lifelines to certain firms and certain industries -- the market economies of the United States and Europe may have collapsed. Today, the relevance and pertinence of industrial policies are acknowledged by mainstream economists and political leaders from all sides of the ideological spectrum. But what exactly is industrial policy? Why has it raised so much controversy and confusion? What is the compelling new rationale that seems to bring mainstream economists to acknowledge the crucial importance of industrial policy and revisit some of the fundamental assumptions of economic theory and economic development? How can industrial policy be designed to avoid the pitfalls of some of the seeming past failures and to emulate some of the past successes? What are the contours of the emerging consensus and remaining issues and open questions? The paper addresses these questions. |
| Keywords: | Climate Change Economics,Public Sector Corruption&Anticorruption Measures,ICT Policy and Strategies,Achieving Shared Growth,Economic Theory&Research |
| Date: | 2013–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6628&r=hpe |
| By: | Sergiu Hart; Noam Nisan |
| Abstract: | We consider the complexity of finding a Correlated Equilibrium in an n-player game in a model that allows the algorithm to make queries for players' utilities at pure strategy profiles. Many randomized regret-matching dynamics are known to yield an approximate correlated equilibrium quickly: in time that is polynomial in the number of players, n, the number of strategies of each player, m, and the approximation error, 1/?. Here we show that both randomization and approximation are necessary: no efficient deterministic algorithm can reach even an approximate equilibrium and no efficient randomized algorithm can reach an exact equilibrium. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp647&r=hpe |
| By: | Alain Béraud (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise) |
| Abstract: | Dans le développement des théories de l'équilibre général, Hicks et Allais ont joué un rôle essentiel. On étudie ici les contributions qui furent les leurs respectivement dans Valeur et Capital (1939) et dans le Traité d'économie pure (1943). L'accent est mis sur trois points : la théorie du bien-être, la stabilité de l'équilibre et la construction d'un modèle dynamique |
| Keywords: | équilibre, utilité, optimum, surplus, stabilité |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00868006&r=hpe |
| By: | Frédéric Schneider; Roberto A. Weber |
| Abstract: | We study how the willingness to enter long-term bilateral relationships affects cooperation even when parties have little information about each other, ex ante, and cooperation is otherwise unenforceable. We experimentally investigate a finitely-repeated Prisoner’s Dilemma, allowing players to endogenously select interaction durations. Consistent with prior research, longer interactions facilitate cooperation. However, many individuals avoid long-term commitment, with uncooperative types less likely to commit than conditional cooperators. Endogenously chosen long-term commitment yields higher cooperation rates (98% in one condition) than exogenously imposed commitment. Thus, the willingness to enter into long-term relationships provides a means for fostering - and screening for - efficient cooperation. |
| Keywords: | Repeated games, cooperation, voluntary commitment |
| JEL: | C72 C92 D03 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:130&r=hpe |
| By: | Suter, Peter; Gmür, Markus (VMI) |
| Abstract: | Until today there is a research gap considering the question, what motivates a member to enter or leave a co-op, resp. what are the reasons to stay in a co-operative. The majority of studies about this topic mainly focus on economic factors and the rational behavior of the member. However, co-ops also have other purposes not associated with financial goals. The presented paper is proposing a new perspective on membership in co-operatives, which combines the German-speaking as well as the Anglo-American line of research, and is a first attempt for an interdisciplinary member value approach. The member value approach focuses on the individual member, but does not ignore the co-operative character all the same. Members have got different expectations towards the co-op whereas latent preferences, based on the nine basic needs by Max-Neef (1991), and economic goals must be distinguished. Member value arise as a result of the match between the latent preferences and economic goals of the members and the latent and manifest benefits provided by the co-op, therefore member value is not a statistic, but a dynamic concept. |
| Keywords: | member value; perceived value; basic needs; co-operatives; AGIL-scheme |
| JEL: | A13 L30 L31 Z13 |
| Date: | 2013–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00444&r=hpe |
| By: | Horn, Henrik (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Few EU decisions have caused more international outcry than the extension of the EU Emissions Trading System (ETS) to apply to aviation. The directive was legally challenged by US airlines before a UK court, which referred the case to the European Court of Justice (ECJ) for a preliminary ruling concerning the compatibility of the directive with international law. This paper discusses the argumentation by the ECJ and the Advocate General from an economic perspective. Such an analysis is warranted in light of the fact that the contested measure is an economic regulation, the international laws that are invoked have clear economic objectives, and the ECJ judgment and the opinion by the Advocate General at least partly rely on economic concepts and mechanisms. An economic analysis also seems warranted from a legal point of view since the quality of the judgment and of the opinion presumably depend on the soundness of their economic reasoning. It is found that the argumentation by the legal authorities is highly questionable in important parts, when viewed from an economic perspective. |
| Keywords: | EJC decision on aviation; ETS; Border carbon adjustment |
| JEL: | K31 K32 L93 |
| Date: | 2013–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0980&r=hpe |
| By: | Callaghan, Helen; Hees, Alexandra |
| Abstract: | Jüngere Studien kritisieren die weitverbreitete Gleichsetzung von Wirtschaftsnationalismus und Protektionismus mit der Begründung, dass auch Marktliberalisierung oft mittels nationalistischer Motive gerechtfertigt wird. Wir ergänzen, dass spiegelbildlich dazu die Befürworter von Protektionismus zunehmend marktliberalisierende Motive anführen. Anhand britischer Parlamentsdebatten über Auslandsübernahmen seit 1956 dokumentiert der vorliegende Artikel die protektionistische und liberale Form von Wirtschaftsnationalismus sowie die protektionistische Form von Wirtschaftsliberalismus. Die zeitliche Entwicklung dieser drei Diskursstränge veranschaulicht einen graduellen Wertewandel und ergänzt damit neuere Studien zu Mechanismen kapitalistischer Dynamik um eine diskursive Dimension. Im Gegensatz zu beiden Formen von Wirtschaftsnationalismus wertet protektionistischer Liberalismus offene Märkte nicht als Mittel zur Förderung oder Schwächung des nationalen Interesses. Stattdessen werden offene Märkte zum Selbstzweck, der keiner Rechtfertigung mehr bedarf und sogar Protektionismus legitimieren kann. -- Recent studies challenge the widespread practice of equating economic nationalism with protectionism, by showing that market liberalization is also frequently justified with reference to nationalist motives. We add that, conversely, advocates of protectionism increasingly advance market-liberalizing motives to legitimate their demands. The present article traces the conservative and liberal forms of economic nationalism, as well as the protectionist form of economic liberalism, through British parliamentary debates regarding foreign takeovers from 1956 onward. The observed discursive change illustrates a gradual change in values and thereby informs recent studies on mechanisms of capitalist development. Unlike both forms of economic nationalism, protectionist liberalism does not portray open markets as a means of promoting or undermining the national interest. Instead, open markets become an end in themselves that no longer requires justification and can even serve to legitimate protectionism. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:1314&r=hpe |
| By: | Anna Dimitrova; Katarina Hollan; Daphne Laster; Andreas Reinstaller; Margit Schratzenstaller; Ewald Walterskirchen; Teresa Weiss |
| Abstract: | The research project WWWforEurope undertakes to lie the theoretical and empirical foundations for the embarkment on a new socio-ecological growth path in Europe. The new path underlines the need to guarantee Welfare as a broad universal principle for its population, assuring economic and social prosperity. The new path stresses the value of achieving – what we call – Wealth, a value in which material and immaterial resources are combined with the goal to enrich people‘s lives and to preserve natural resources, nature and bio-diversity. Both cannot be achieved without Work: Europe needs to enable its population to achieve their life satisfaction at the highest level possible and Work is one of the most – if not, the most – fundamental precondition for this. In short, the overarching question the WWWforEurope project attempts to answer is what kind of new European growth and development strategy is necessary and feasible, enabling a socio-ecological transition to high levels of employment, well-being of its citizens, social inclusion, resilience of ecological systems and a significant contribution to the global common goods like climate stability. Thus the project’s central goals are to identify the forces and challenges necessitating deliberations on a new growth path, to define socio-ecological transition, key actors and main obstacles, and to find out how the process of a socio-ecological transition can be initiated, monitored, and accelerated on an institutional level (EU, national and regional level). A central prerequisite to successfully accomplish these central goals is to establish a common understanding of the central questions raised by this undertaking and to create awareness for the project’s systemic and interdisciplinary approach. To this behalf, this paper presents fundamental concepts, terms and definitions relevant for socio-ecological transition. Hereby the paper focuses on the concepts of sustainability, growth, innovation, welfare and well-being, wealth and work. We also look at the various dimensions and definitions of transition/transformation which can be found in the literature, trying to concretise the concept of a socio-ecological transition forming the context and starting point of the WWWforEurope project. The necessity to accomplish a socio-ecological transition represents the starting point and the background against which the concepts and terms addressed in this paper gain their relevance. Economic, environmental and social sustainability and sustainable growth and development, respectively, are the central and final aim of the envisaged socio-ecological transition. Sustainability is an indispensable precondition for societal and individual welfare/well-being. Socio-ecological transition to achieve sustainability requires putting into question the prevailing view on economic growth. While economic growth may help to reduce poverty or unemployment and may thus be positively related with social sustainability, this often implies negative external effects for the environment. Alternative growth concepts are to be explored therefore, which do not consider the economic dimension of sustainability only, but explicitly try to incorporate social and environmental aspects in addition. Several more sustainability-oriented growth concepts have been brought into the discussion more recently. All of them are departing from the empirical fact that with increasing levels of GDP per capita the relation between economic growth and societal as well as individual well-being is weakening and that economic growth on the contrary may even endanger environmental and social sustainability (e.g. due to too little time for family and friends) and thus negatively affect quality of life and well-being. A more sustainable perspective on growth requires a more sustainable view on innovation, as a central driver for growth. Within the context of a socio-ecological transition based on sustainable growth, ecological and social innovation gain in importance vis-à-vis purely profit-oriented innovation. Long-term growth is based on wealth as the productive base of an economy. Sustainable growth and development needs to rest on a comprehensive/inclusive wealth concept taking into account, besides the conventional material assets, also natural capital. Finally, socio-ecological transition will also affect the organisation of work/labour. This paper tries to define and concretise these fundamental concepts and terms. Thus it should provide some kind of lexicon, which serves as starting point and background for the work on the central questions guiding the WWWforEurope project. Wherever possible, the paper should facilitate the agreement on common definitions. It is not the aim of the paper to elaborate tradeoffs in depth and to offer solutions and answers already. It rather strives to motivate all research groups involved in the WWWforEurope project to use and discuss the existing concepts, may they be consistent or just offer a variety of thought. It also attempts at drawing attention to the existence of trade-offs and open questions relevant for the various research areas. Moreover, the paper wants to inspire the search for best (or the identification of not working) practices, and it wants to increase the awareness for existing barriers to change. While the paper is not able to elaborate in depth distributional and gender aspects as crucial cross-cutting issues, it aims at directing attention at them and at inspiring research undertaken in the WWWforEurope project to consider these cross-cutting issues. Finally, the paper does not focus too much on policy issues. It is the aim of the overall project to identify (potential) interlinkages, trade-offs and synergies and to discuss policy options and instruments in details to support a more dynamic, inclusive and ecological growth and development path for Europe. |
| Keywords: | Behavioural economics, beyond GDP, biophysical constraints, ecological innovation, economic growth path, gender, innovation, social innovation, socio-ecological transition, sustainable growth, synergies, wealth |
| JEL: | D6 E02 E61 H11 H51 H52 H53 H54 H55 I31 J11 J16 L16 O31 O43 O44 R11 Q20 Q40 Q50 Q51 Q58 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:9:d:0:i:40&r=hpe |