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on History and Philosophy of Economics |
| By: | Davis, John B. (Department of Economics Marquette University) |
| Abstract: | This paper examines Geoff Hodgson’s interpretation of Veblen in agency-structure terms, and argues it produces a conception of reflexive economic agents. It then sets out an account of cumulative causation processes using this reflexive agent conception, modeling them as a two-part causal process, one part involving a linear causal relation and one part involving a circular causal relation. The paper compares the reflexive agent conception to the standard expected utility conception of economic agents, and argues that on a cumulative causation view of the world the completeness assumption essential to the standard view of rationality cannot be applied. The final discussion addresses the nature of the choice behavior of reflexive economic agents, using the thinking of Amartya Sen and Herbert Simon to frame how agents might approach choice in regard to each of the two different parts of cumulative causal processes, and closing with brief comments on behavioral economics’ understanding of reference dependence and position adjustment. |
| Keywords: | Hodgson, Veblen, cumulative causation, reflexive agents, completeness assumption |
| JEL: | B41 B52 D01 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:2016-05&r=hpe |
| By: | Brice Corgnet (EMLYON Business School, Univ Lyon); Mark DeSantis (Argyros School of Business and Economics & Economic Science Institute, Chapman University,); David Porter (Argyros School of Business and Economics & Economic Science Institute, Chapman University,) |
| Abstract: | Using simulations and experiments, we pinpoint two main drivers of trader performance: cognitive reflection and theory of mind. Both dimensions facilitate traders’ learning about asset valuation. Cognitive reflection helps traders use market signals to update their beliefs whereas theory of mind offers traders crucial hints on the quality of those signals. We show these skills to be complementary because traders benefit from understanding the quality of market signals only if they are capable of processing them. Cognitive reflection relates to previous Behavioral Finance research as it is the best predictor of a trader’s ability to avoid commonly-observed behavioral biases. |
| Keywords: | Experimental asset markets, behavioral finance, cognitive reflection, theory of mind, financial education |
| JEL: | C92 G02 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-20&r=hpe |
| By: | Eric Dubois (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The aim of this article is to survey the huge literature that has emerged in the last four decades following Nordhaus's (1975) publication on political business cycles (PBCs). I first propose some developments in history of thought to examine the context in which this groundbreaking contribution saw the light of the day. I also present a simplified version of Nordhaus's model to highlight his key results. I detail some early critiques of this model and the fields of investigations to which they gave birth. I then focus on the institutional context and examine its influence on political business cycles, the actual research agenda. Finally, I derive some paths for future research. |
| Keywords: | political business cycles,politico-economic cycles,electoral cycles,opportunistic cycles,conditional political business cycles |
| Date: | 2016–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01291401&r=hpe |
| By: | Cendejas Bueno, José Luis |
| Abstract: | In Aristotle’s thought, economic activity refers to a kind or praxis consisting of allocating human and material means comprising the oikos –the domestic community- to fulfill its natural ends: ensure both life and means of life. By means of natural chrematistics -acquisitive art- families acquire the necessary means for that, coming from production and exchange. Families group together in the political community (polis) whose end is well living, according virtue, outstanding justice as the “perfect virtue”. For its part, the Christian ethos informs this complete system (polis, oikos and chrematistics) ordering towards its ultimate purpose (beatitudo) every human act, internal and external. In St. Thomas view, eternal law constitutes the order of Creation that man can freely accept. This law harmonizes necessity of irrational beings, loving God’s action (divine law), natural law, and the contingency of “human things” that include economy. Trading activity is licit if it is at oikos or polis disposal and according how is exercised, by following commutative justice. Familiar, political and religious man’s nature establishes what the natural-necessary consists of, embracing, apart from body goods, others goods derived from considering social status and the life chosen (civil, religious, active or contemplative). Economic activity based on this anthropological root has a specific place as a part of an ordered natural-legal totality that provides economy with a meaning and a sufficient moral guidance. |
| Keywords: | oikonomia, chrematistics, natural law, economic thought of Aristotle, economic thought of Saint Thomas |
| JEL: | A13 B11 |
| Date: | 2016–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73585&r=hpe |
| By: | Andreas Nicklisch (University of Hamburg and German Research Foundation); Kristoffel Grechenig (Max Planck Institute for Research on Collective Goods, Bonn); Christian Thoeni (Univesity of Lausanne) |
| Abstract: | We study information conditions under which individuals are willing to delegate their sanctioning power to a central authority. We design a public goods game in which players can move between institutional environments, and we vary the observability of others' contributions. We find that the relative popularity of centralized sanctioning crucially depends on the interaction between the observability of the cooperation of others and the absence of punishment targeted at cooperative individuals. While central institutions do not outperform decentralized sanctions under perfect information, large parts of the population are attracted by central institutions that rarely punish cooperative individuals in environments with limited observability. |
| Keywords: | centralized sanctions, cooperation, experiment, endogenous institutions |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2016-12&r=hpe |
| By: | Boris Gershman |
| Abstract: | This paper reviews recent economics literature on culture, with an emphasis on its relation to the field of long-run growth and development. It examines the key issues debated in the new cultural economics: causal effects of culture on economic outcomes, the origins and social costs of culture, as well as cultural transmission, persistence, and change. Some of these topics are illustrated in application to the economic analysis of envy-related culture. |
| Keywords: | Culture, cultural persistence, cultural transmission, long-run development |
| JEL: | J15 O10 Z10 Z12 Z13 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2016-06&r=hpe |
| By: | Johannes Abeler (University of Oxford, IZA and CESifo); Daniele Nosenzo (University of Nottingham, School of Economics); Collin Raymond (Amherst College) |
| Abstract: | We study information conditions under which individuals are willing to delegate their sanctioning power to a central authority. We design a public goods game in which players can move between institutional environments, and we vary the observability of others' contributions. We find that the relative popularity of centralized sanctioning crucially depends on the interaction between the observability of the cooperation of others and the absence of punishment targeted at cooperative individuals. While central institutions do not outperform decentralized sanctions under perfect information, large parts of the population are attracted by central institutions that rarely punish cooperative individuals in environments with limited observability. |
| Keywords: | centralized sanctions, cooperation, experiment, endogenous institutions |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2016-13&r=hpe |
| By: | Christoph Schottmüller (Department of Economics, University of Copenhagen) |
| Abstract: | A decision maker repeatedly asks an adviser for advice. The adviser is either competent or incompetent and his preferences are not perfectly aligned with the decision maker's preferences. Over time the decision maker learns about the adviser's type and fires him if he is likely to be incompetent. If the adviser's reputation for being competent improves, it is more attractive for him to push his own agenda because he is less likely to be fired for incompetence. Consequently, competent advisers are also fired with positive probability. Firing is least likely if the decision maker is unsure about the adviser's type. |
| Keywords: | advice, cheap talk, reputation |
| JEL: | C73 D83 G24 |
| Date: | 2016–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1610&r=hpe |
| By: | Wu, Haoyang |
| Abstract: | The revelation principle is a fundamental theorem in many economics fields such as game theory, mechanism design and auction theory etc. In this paper, I construct an example to show that a social choice function which can be implemented in Bayesian Nash equilibrium is not truthfully implementable. The key point is that agents pay cost in the indirect mechanism, but pay nothing in the direct mechanism. As a result, the revelation principle may not hold when agent's cost cannot be neglected in the indirect mechanism. |
| Keywords: | Revelation principle; Game theory; Mechanism design; Auction theory |
| JEL: | D70 |
| Date: | 2016–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73694&r=hpe |
| By: | Angus Deaton; Nancy Cartwright |
| Abstract: | The use of RCTs is spreading in economics. They are seen as desirable for discovery and for generating evidence for policy. Yet some of the enthusiasm for RCTs comes from misunderstandings: that randomization provides a fair test by equalizing everything but the treatment and so allows a precise estimate of the treatment alone; that randomization is required to solve selection problems; that lack of blinding does little to compromise inference; and that statistical inference in RCTs is straightforward, because it requires only the comparison of two means. RCTs do indeed require minimal assumptions and prior knowledge, an advantage when persuading distrustful audiences, but a crucial disadvantage for cumulative scientific progress, where randomization undermines precision. It is hard to use them outside of their original context. Yet, once they are seen as part of a cumulative program, they can play a role in building general knowledge and useful predictions, provided they are combined with other methods, including conceptual and theoretical development, to discover not “what works,” but why things work. Unless we are prepared to make assumptions, and to stand on what we know, making statements that will be incredible to some, all the credibility of RCTs is for naught. |
| JEL: | C10 C26 C93 O22 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22595&r=hpe |
| By: | Stepantsov, Pavel (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Yermakova, V.B. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | The object of the study are: epistemic base of sociological theorizing. The first chapter is devoted to the reconstruction method of formation of the theory of reflection by the explication of the basic metaphors and its problematization. The second chapter is designated a basic metaphor for the present study (theoretical work as communication) and explores its possibilities. It also built the concept theorizing metonymic strategy opposed to the already existing and well-established metaphorical strategy. The third chapter contains illustrations of the architecture based on the dyad model Jacobson theoretical work. The main result is the theoretical conceptualization and description metonymic model of thinking in social theory based on the idea of ??the two poles (metaphorical and metonymic) theoretical work. |
| Keywords: | sociological theorizing, strategies |
| Date: | 2016–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:2865&r=hpe |
| By: | Erofeeva, Maria (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | This paper presents the description and analysis of the reconfiguration of sociological theory in the context of the rotation to the material and research processes virtualization social institutions and practices. The subject of research is the epistemological reconfiguration of modern sociology, considered as what is happening in contemporary sociological theory of change in the ratio substantialist relyatsionistskih and research positions and practices in the justification and implementation of social cognition process, and its implications for the further development of sociological theory and practice. |
| Keywords: | actor-network theory, sociology, relationalism |
| Date: | 2016–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:1669&r=hpe |
| By: | van Hoorn, Andr (Groningen University) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:16008-gem&r=hpe |
| By: | Wu, Haoyang |
| Abstract: | The revelation principle is a fundamental theorem in many economics fields such as game theory, mechanism design and auction theory etc. In this paper, I construct an example to show that a social choice function which can be implemented in Bayesian Nash equilibrium by an indirect mechanism cannot be implemented by a direct mechanism. The key point is that agents pay cost in the indirect mechanism, but pay nothing in the direct mechanism. As a result, the revelation principle does not hold at all. |
| Keywords: | Revelation principle; Game theory; Mechanism design; Auction theory |
| JEL: | D70 D82 |
| Date: | 2016–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73660&r=hpe |
| By: | van der Meer, Peter H.; Wielers, Rudi (Groningen University) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:16016-hrm&ob&r=hpe |
| By: | Thomas Carver (Motu Economic and Public Policy Research); Arthur Grimes (Motu Economic and Public Policy Research) |
| Abstract: | The positive relationship between income and subjective wellbeing has been well documented. However, work assessing the relationship of alternative material wellbeing metrics to subjective wellbeing is limited. Consistent with the permanent income hypothesis, we find that a consumption measure out-performs income in predicting subjective wellbeing. When objective measures of consumption are combined with self-assessments of a household’s standard of living, income becomes insignificant altogether. We obtain our result utilising household-level data from Statistics New Zealand’s ‘New Zealand General Social Survey’ which contains a measure of material wellbeing called the ‘Economic Living Standard Index’ that combines measures of consumption flows and self-assessments of material wellbeing. |
| Keywords: | Life satisfaction, Subjective Wellbeing, Consumption, Permanent Income Hypothesis, Material Wellbeing |
| JEL: | D12 D63 E21 I31 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:16_12&r=hpe |
| By: | David Laidler (University of Western Ontario) |
| Abstract: | The problems posed by monetary policy cannot be dealt with by legislating enduring policy rules. With the passage of time, economic understanding does not systematically converge ever more closely on a “true” model of the economy, a process which is now sufficiently far along that our current ideas can form the basis for designing such measures. Rather, economic ideas evolve unsteadily and unpredictably and disagreement about them is routine. They influence the behaviour of the economy and they are influenced by it as they develop, requiring policy principles to adapt as well. Monetary policy thus poses problems that cannot be solved once and for all, but must be coped with continuously. |
| Keywords: | Monetary Policy; Rules versus Discretion; Gold Standard; Revolutions in Macroeconomics |
| JEL: | E5 B1 B2 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:uwowop:20164&r=hpe |