nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2014‒03‒01
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. Ricardo’s Discovery of Comparative Advantage Revisited By Christian Gehrke
  2. Richard Titmuss: Forty years on By Howard Glennerster
  3. Islam and Human Development By Shaikh, Salman
  4. Fair and unfair punishers coexist in the Ultimatum Game By Pablo Branas-Garza; Antonio M. Espin; Benedikt Herrmann
  5. The economic behaviour of doctors: medical altruism without an ethic? By Philippe Batifoulier; Nicolas Da Silva
  6. Economics Is a Science of Time Saving: The First Tentative Model By Drew Zhu
  7. Yes, it’s the economy, stupid, but is it demand or supply? By De Grauwe, Paul
  8. An overview on the non-newtonian calculus and its potential applications to economics By Diana Filip; Cyrille Piatecki
  9. Pourquoi conduit-on à droite ? Une investigation historique dans la genése d'un conflit de normes By Cyrille Piatecki
  10. In defense of a non-newtonian economic analysis By Diana Filip; Cyrille Piatecki
  11. Awareness of Unawareness: A Theory of Decision Making in the Face of Ignorance By Edi Karni; Marie-Louise Vierø

  1. By: Christian Gehrke (University of Graz)
    Abstract: In an influential paper entitled “David Ricardo’s Discovery of Comparative Advantage”, which was published in HOPE (Vol. 34, 2002), Roy J. Ruffin attempted to reconstruct the circumstances of Ricardo’s discovery of the law of comparative advantage. Ruffin’s article has inspired a number of further contributions (see, e.g., Aldrich 2004, Maneschi 2004, 2008, Ruffin 2005, Morales-Meoqui 2011) on the precise nature, logical structure, and analytical significance of Ricardo’s formulation of the law of comparative advantage in international trade theory. The present paper shows that Ruffin’s reconstruction of Ricardo’s discovery of the law of comparative advantage, and in particular his interpretation of Ricardo’s letters to Malthus and James Mill of October 1816, encounters a number of serious problems. When the context of Ricardo’s statements is properly taken into account, and the premises and implications of Ruffin’s hypothesis, according to which those statements refer to international prices, are carefully scrutinized, his novel interpretation is seen to lack plausibility. Moreover, it is shown that Ruffin’s contention that modeling assumptions and analytical results of neoclassical trade theory such as “factor price equalization”, the “Lerner symmetry theorem”, or the “Stolper-Samuelson theorem” can be discerned in Ricardo’s chapter “On Foreign Trade” cannot be sustained.
    Date: 2014–02
  2. By: Howard Glennerster
    Abstract: Richard Titmuss was one of the world's leading public analysts and philosophers. He was highly influential in shaping the post-war welfare state and created the subject we now call social policy. What would he make of the present state of welfare? This lecture reflects on the man and the times which shaped his ideas. What is his legacy forty years on from his death? Which of his ideas have lasted and which have proved less durable? What gaps were there in his world view?
    Keywords: social policy, Titmuss, well-being
    JEL: I38
    Date: 2014–02
  3. By: Shaikh, Salman
    Abstract: The paper aims to present the Islamic appraisal of established theories in academic literature of development economics, both in classical and neo-classical economics. The paper also explains the Islamic concept of human development and shows it to be more welfare maximizing to humans in their entire life span which includes afterlife. The paper extensively reviews the development literature in mainstream economics and Islamic economics. The paper also uses basic mathematical formulation to explain the concepts. The paper explains the Islamic concept of human development and shows it to be more welfare maximizing to humans and to society. It discusses how Islam is not the source of underdevelopment in Muslim countries and cites the external factors responsible for underdevelopment besides weak internal administration, commitment and management. The paper is one of the few attempts to cite and critically appraise specific development theories from Islamic perspective.
    Keywords: Development Economics, Growth Economics, Economic Development, Poverty, Income Inequality, Income Distribution
    JEL: I3 L38 O1
    Date: 2014–01–01
  4. By: Pablo Branas-Garza (Business School, Middlesex University London); Antonio M. Espin (GLOBE,Universidad de Granada; Departamento de Teoría e Historia Económica, Universidad de Granada); Benedikt Herrmann (Behavioural Economics Team, Institute for Health and Consumer Protection, Joint Research Centre, European Commission)
    Abstract: Fairness norms are crucial in understanding the emergence and enforcement of large-scale cooperation in human societies. The most widely applied framework in the study of human fairness is the Ultimatum Game (UG). In the UG, a proposer suggests how to split a sum of money with a responder. If the responder rejects the proposer’s offer, both players get nothing. Rejection of unfair offers is considered to be a form of punishment implemented by fair-minded individuals, who are willing to sacrifice their own resources in order to impose the fairness norm. However, an alternative interpretation is equally plausible: punishers might actually be using rejections in a competitive, spiteful fashion as a means to increase their relative standing. This hypothesis is in line with recent evidence demonstrating that “prosocial” and “antisocial” punishers coexist in other experimental games. Using two large-scale experiments, we explore the nature of UG punishers by analyzing their behavior in a Dictator Game. In both studies, we confirm the coexistence of two entirely different sub-populations: prosocial punishers, who behave fairly as dictators, and spiteful (antisocial) punishers, who are totally unfair. Such a result is fundamental for research on the foundations of punishment behavior employing the UG. We discuss how focusing only on the fairness-oriented part of human behavior might give rise to misleading conclusions regarding the evolution of cooperation and the behavioral underpinnings of stable social systems.
    Date: 2014–01
  5. By: Philippe Batifoulier; Nicolas Da Silva
    Abstract: Health economics appears to have difficulty in taking medical ethics into consideration because of the standard figure of homo economicus. In main stream economics, the ethical attitude of a physician is then formalized in terms of “medical altruism”. This paper seeks to highlight the advantages and the contradictions of this medical altruism. We can identify several levels of problems raised by this medical altruism: theoretical paradoxes and economic policy problems for the regulator. The interest of the concept of medical altruism is to save or improve the economic theory with a more realistic assumption. However, if this assumption is more realistic, it induces paradoxes of economic theory. The misfortune for economists is that this theoretical inconstancy is lined with economic policy issues. These remain unresolved and we do not know what to do. In conclusion, we think that it becomes crucial to consider seriously medical ethics.
    Keywords: healthcare; altruism, professional ethics; instrumental rationality; intrinsic motivation
    JEL: B41 I10 I18
    Date: 2014
  6. By: Drew Zhu
    Abstract: Time might be the scarcest resource for every individual. Time saving should be one of a few specific starting points of Economics. Utility theory is not a perfect theory, which heavily depends on a serial of unrealistic assumptions, and sets Economics on the shifting sands. Time saving could be a solid rock for Economics to build on. In modern society, we typically get more free time by spending some of our whole time to work and earn money. According to a new attribute theory that is different from Lancasterâs attribute theory, the paper constructs the first economic optimization model of time saving that is completely independent of any utility function. This model can also deal with the discrete, including the lexicographic preferences. Due to some data unavailable, the demand function of the time saving good can not be directly derived from the optimization model. Thus an indirect method is used to derive the demand function that has a better predictive power than two common econometric models of that dataset. An interesting hypothesis obtained from the result of the indirect method and need to be verified by more evidence is that we might find a âtime saving lawâ: the income elasticity of demand of time saving goods is approximately 1. Moreover, as a very basic human behavior, time saving can be generalized to other fundamental theories of Economics, especially the long-run growth theory. A further discussion indicates that based on the starting point of time saving, the two paradigms of Neo-classical and New Classical Economics could be united into one paradigm of saving time to increase utility or improving the level of division of labor to save time. Therefore, in the ultimate meaning, it is safe to conclude that Economics is a science of how to save time and time saving might be a milestone that will shift Economics from the pre-Copernican era of Astronomy to a modern era.
    JEL: A10 B23 C60 D11
    Date: 2014–02–21
  7. By: De Grauwe, Paul
    Abstract: Paul De Grauwe writes in this new CEPS Commentary that the recent and surprising conversion of François Hollande to supply-side economics completes the victory of the northern European policy-makers who believe that insufficient aggregate demand should be fought exclusively by supply-side measures. In his view, however, it is not the first time in post-war history that economists and policy-makers apply the wrong medicine; or to put it differently, it's akin to some generals who fight a new war by applying the strategies developed for the previous war.
    Date: 2014–01
  8. By: Diana Filip (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans); Cyrille Piatecki (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans)
    Abstract: Jusqu'à présent, le calcul non-newtonien, calcul multiplicatif en particulier, a été présenté comme une curiosité et est presque ignoré dans le domaine des sciences sociales. Dans cet article, après une brève présentation de ce calcul, nous essayons de montrer comment il pourrait être utilisé pour ré-explorer d'un autre point de vue la théorie éconiomique classique, plus particulièrement la croissance économique et, en statistique, la méthode du maximum de vraisemblance des statistiques.
    Keywords: analyse non-newtonienne ; théorie economique ; croissance ; maximum de vraisemblance
    Date: 2014–02–17
  9. By: Cyrille Piatecki (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans)
    Abstract: Il peut sembler étrange à un habitant de l'Europe continentale que les îles britanniques continuent de rouler à gauche. Pourtant, il est démontré qu'historiquement la norme initiale consistait à rouler à gauche, ce qui présente des avantages attestés d'un point de vue physiologique. Il a été avancé que le passage à la norme droitière est un hasard de l'Histoire lié à la volonté des révolutionnaires de 1792 de rompre avec les pratiques de l'ancien régime. Dans cet article, une autre conjecture qui semble plus vraisemblable est avancée : ce serait une cascade de progrès techniques importants lié au transport routier des personnes et des marchandises qui aurait eu pour conséquence d'entraîner le monde dans une situation de locked-in -- c'est-à-dire d'enfermement -- dans une technologie qui, bien que n'ayant plus de raison, s'est diffusé et a conquis le monde, laissant à la norme originale la partie congrue des pays de la planète.
    Keywords: Locked-in, transports, normes, théorie des jeux
    Date: 2014–02–04
  10. By: Diana Filip (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans); Cyrille Piatecki (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans)
    Abstract: La comptabilité en partie double présentée par Luca Pacioli au quinzième siècle pourrait être considéré comme un argument fort en faveur de la calcul multiplicatif qui peut être développée à partir concept de calcul non-newtonien de Grossman et Katz . Afin de souligner cette affirmation, nous présentons un bref historique de la comptabilité depuis son enfance et nous faisons le point de la recherche d'Ellerman concernant la comptabilité à double entrée.
    Keywords: Comptabilité en partie double ; analyse non-newtonienne
    Date: 2014–02–03
  11. By: Edi Karni (Johns Hopkins University); Marie-Louise Vierø (Queen's University)
    Abstract: In the wake of growing awareness, decision makers anticipate that they might become aware of material possibilities and ideas that, in their current state of ignorance, are unimaginable. This anticipation manifests itself in their choice behavior. This paper models this awareness of unawareness and axiomatizes a probabilistic sophisticated representation of beliefs about ignorance and subjective expected utility representation, in an enriched framework, that assigns utility to the unknown while maintaining, in both instances, the flavor of reverse Bayesianism of Karni and Vierø (2013, 2014).
    Keywords: Awareness, Unawareness, Ignorance, Reverse Bayesianism
    JEL: D8 D81 D83
    Date: 2014–01

This nep-hpe issue is ©2014 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.