nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2016‒03‒17
ten papers chosen by
Erik Thomson
University of Manitoba

  1. McCarthyism and the Mathematization of Economics By E. Roy Weintraub
  2. The Founders of 16th Century Belgian Realism in Private International Law Doctrine By Irina V. Getman-Pavlova
  3. Fairness Versus Efficiency: How Procedural Fairness Concerns Affect Coordination By Kurz, Verena; Orland, Andreas; Posadzy, Kinga
  4. Adaptation and Influence: The Schumpeterian Perspective on Business-Politics Relations By Thomas Paster
  5. Small-world conservatives and rigid liberals : attitudes towards sharing in self-proclaimed left and right By Thomsson K.M.; Vostroknutov A.
  6. Doing Rawls justice: Evidence from the PSID By Antonio Abatemarco
  7. How Rome Enabled Impersonal Markets By Benito Arruñada
  8. A paradox of rationality à la von Neumann-Morgenstern By Ismail M.S.
  9. Cultural Beliefs, Values and Economics: A Survey By Marini, Annalisa
  10. What makes Law to change Behavior? An experimental study By Romaniuc, Rustam

  1. By: E. Roy Weintraub
    Abstract: Historians of the social sciences and historians of economics have come to agree that, in the United States, the 1940s transformation of economics from political economy to economic science was associated with economists’ engagements with other disciplines—e.g. mathematics, statistics, operations research, physics, engineering, cybernetics—during and immediately after World War II. More controversially, some historians have also argued that the transformation was accelerated by economists’ desires to be safe, to seek the protective coloration of mathematics and statistics, during the McCarthy period. This paper argues that that particular claim 1) is generally accepted, but 2) is unsupported by good evidence, and 3) what evidence there is suggests that the claim is false.
    Keywords: Cold War, McCarthyism, mathematical economics, mathematization of economics, history of philosophy, RAND, Cowles Commission, Paul Lazarsfeld
    JEL: B2 B4 B5 C02 C10
    Date: 2016
  2. By: Irina V. Getman-Pavlova (National Research University Higher School of Economics)
    Abstract: This article restores to academic circulation the names of representatives of the 16th century Belgian School of Realism, who have been unjustly forgotten in modern Private International Law [PIL] doctrine—Nicolas Everhard, Pieter Peck and Johannes a Sande. These scholars are the founders of the Belgian-Dutch theory of conflicts of laws which anticipated the classic Dutch “comity” doctrine and provided the framework for the Anglo-American doctrine of the regulation of international civil relations. The theory of Belgian realism was first outlined by Everhard, Peck and Sande and was formed on the theory of statutes—the sole doctrine of PIL for 500 years. Belgian Realism is a separate direction in the theory of statutes which triggered the process of a strongly territorial concept of conflict resolution between choice of law rules of different states. However, despite their outstanding contribution to the legal practice and doctrine of their time, these scholars are not known to modern jurisprudence. The article concludes that Everhard, Peck and Sande developed the choice of law rules which are now adopted by modern legislation; moreover, their works may serve to develop international comity doctrine, which has been adopted by modern PIL.
    Keywords: Private International Law, the theory of statutes, 16th century, the Belgian-Dutch theory of conflicts of laws, Belgian Realism, Nicolas Everhard, Pieter Peck, Johannes a Sande
    JEL: Z
    Date: 2016
  3. By: Kurz, Verena (University of Gothenburg, Department of Economics, Sweden); Orland, Andreas (University of Potsdam, Department of Economics, Germany); Posadzy, Kinga (Division of Economics, Department of Management and Engineering, Linköping University)
    Abstract: What happens if a mechanism that aims at improving coordination treats some individuals unfairly? We investigate in a laboratory experiment whether procedural fairness concerns affect how well individuals are able to solve a coordination problem in a two-player Volunteer’s Dilemma. Subjects receive external action recommendations that can help them avoid miscoordination if followed by both players. One of the players receives a disadvantageous recommendation to volunteer while the other player receives a recommendation not to volunteer that gives her a payoff advantage if both players follow the recommendations they have received. We manipulate the fairness of the recommendation procedure by varying the probabilities of receiving a disadvantageous recommendation between players. We find that the recommendations improve overall efficiency regardless of their consequences for payoff division. However, there are behavioral asymmetries depending on the recommendation received by a player: advantageous recommendations are followed less frequently than disadvantageous recommendations in case of actions that guarantee a low payoff. While there is no difference in acceptance of different recommendation procedures, beliefs about others’ actions are more pessimistic in the treatment with a procedure inducing unequal expected payoffs. Our data shows that beliefs about others’ behavior are correlated with one’s own behavior, however this is the case only when following recommendations is a strategy that involves payoff-uncertainty.
    Keywords: Coordination; Correlated equilibrium; Recommendations; Procedural fairness; Volunteer’s Dilemma; Experiment
    JEL: C72 C91 D63 D83
    Date: 2016–03–01
  4. By: Thomas Paster
    Abstract: This paper introduces Schumpeter’s views on the relationship between business and politics and argues that we can discern a distinct Schumpeterian perspective of business-politics relations. Schumpeter’s views about the pivotal role of entrepreneurs in economic development attracted substantial interest in economic sociology and in political economy. His views about the role of entrepreneurs in politics have so far however hardly been studied. The paper identifies the following four aspects as central to Schumpeter’s perspective of business-politics relations: (a) entrepreneurs and corporations drive economic change, (b) entrepreneurs and corporations are ineffective in defending their political interests and vulnerable to hostile movements, (c) the resulting divergence of the economic and the political impact of entrepreneurs and corporations makes capitalism socio-politically instable, and (d) the relationship of entrepreneurs and corporations to political institutions and public policies is primarily adaptive, rather than causative. The paper proposes a two-dimensional typology of business-politics relations that combines the Schumpeterian focus on adaptation with the Marxian focus on influence. These two dimensions - adaptation and influence - result in four ideal types: business-dominated social compromise, imposed social compromise, business dominance, and political confrontation. Examples from German welfare state history illustrate these four types. The paper suggests that the Schumpeterian and the Marxian perspective, while in contrast to each other, may be complementary and each perspective valid under different socio-political conditions.
    Keywords: business and politics, Joseph A. Schumpeter, welfare state politics, political economy of entrepreneurship, history of economic ideas.
    JEL: P12 P16 H50 H70 J58
    Date: 2016
  5. By: Thomsson K.M.; Vostroknutov A. (GSBE)
    Abstract: We experimentally explore the way political preferences shape giving behavior. We find no difference in average giving between the Left and the Right in a Dictator game environment. However, we find the reasons for giving to be different. Right-leaning individuals give according to a norm-dependent utility that takes into account the beliefs of the receiver. The behavior of left-leaning individuals is not shaped by such an interaction between norms and beliefs. We conclude that right-wingers choose in accordance with a small world view, where giving is shaped by social interaction, while left-wingers appear rigid in their reaction to social context.
    Keywords: Design of Experiments: Laboratory, Individual; Design of Experiments: Laboratory, Group Behavior; Behavioral Economics: Underlying Principles; Altruism; Philanthropy;
    JEL: C91 C92 D03 D64
    Date: 2016
  6. By: Antonio Abatemarco (Dipartimento di Scienze Economiche e Statistiche - Universita di Salerno)
    Abstract: Distributive value judgments based on the ‘origins’ of economic inequalities (e.g. circumstances and responsible choices) are increasingly evoked to argue that ‘the worst form of inequality is to try to make unequal things equal’ (Aristotele). However, one may reasonably agree that distributive value judgments should also account for the ‘consequences’ of economic inequalities in such a way as to prevent from subordination, exploitation and humiliation. In this way of thinking, by resorting the well known Rawlsian ‘fair equality of opportunity’ and ‘difference principle’, we propose a pragmatical non-parametric estimation strategy to compare income distributions in terms of Rawlsian inequity and its contribution to overall inequality. The latter methodology is applied to PSID data from 1999 to 2013 and compared with existing empirical evidences on Roemer’s (1993, 1998) inequality of opportunity. Worryingly, Rawlsian inequity is found between 56% and 65%, with an increasing pattern originating from the recent financial and economic crisis.
    Keywords: Rawlsian justice, equality of opportunity, equity.
    JEL: D63 I32 D3
    Date: 2016–01
  7. By: Benito Arruñada
    Abstract: Impersonal exchange increases trade and specialization opportunities, encouraging economic growth. However it requires the support of sophisticated public institutions. This paper explains how Classical Rome provided such support in the main areas of economic activity by relying on public possession as a titling device, enacting rules to protect innocent acquirers in agency contexts, enabling the extended family to act as a contractual entity, and diluting the enforcement of personal obligations which might collide with impersonal exchange. Focusing on the institutions of impersonal exchange, it reaches a clear positive conclusion on the market-facilitating role of the Roman state because such institutions have unambiguously positive effects on markets. Moreover, being impersonal, these beneficial effects are also widely distributed across society instead of accruing disproportionately to better-connected individuals.
    Keywords: Property rights, enforcement, transaction costs, Roman law, impersonal exchange, personal exchange, New Institutional Economics, Law and Economics
    JEL: D1 D23 G38 K11 K12 K14 K22 K36 L22 N13 O17 P48
    Date: 2016–02
  8. By: Ismail M.S. (GSBE)
    Abstract: We show that there are games and decision situations in which it is not possible for the decision maker to be rational a la von Neumann-Morgenstern in both situations simultaneously, which is the source of the paradox presented in this note. We provide an assumption which is the necessary and sufficient condition for a decision maker to be rational in both situations.
    Keywords: Information, Knowledge, and Uncertainty: General;
    JEL: D80
    Date: 2015
  9. By: Marini, Annalisa
    Abstract: The present work reviews the relation between culture and economics; in doing so, we often distinguish between the historical component of culture (i.e. inherited values) and its contemporaneous component (i.e. social interactions). First, the paper emphasizes which cultural traits are relevant in economics, reviews situations where culture affects economic outcomes and addresses the relevance of culture across time and space. Then, it explains the theoretical framework of reference for the transmission of both contemporaneous and inherited culture. Finally, it presents econometric techniques available to the researchers and suitable to investigate the impact of culture on economic outcomes, providing suggestions for future research.
    Keywords: Contemporaneous Culture, Inherited Culture, Cultural Econometrics
    JEL: C0 Z1
    Date: 2016–01
  10. By: Romaniuc, Rustam
    Abstract: The use of mild laws to affect people’s behavior is pervasive – from environmental regulation to tort law – but little is known about how the law changes human behavior and social outcomes when it uses non-deterrent monetary incentives. We find that when low monetary incentives are used in tandem with an indication of what one should do (i.e., a norm), then the effect on behavior is positive but transitory. The effect is long lasting when we use low monetary incentives in isolation. This suggests that the indication of what one should do makes salient the conflict between people’s normative expectations and what others effectively do. This undermines conditional cooperators’ own motivation to contribute to public goods. Finally, we compare the effects of mild laws with how mere messages indicating what is moral behavior affect contributions to the public good. Contrary to the existing experimental evidence, we find that messages fail to improve cooperation. We spotlight the conditions under which this is the case.
    Date: 2015–12

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