|
on History and Philosophy of Economics |
| By: | Erich Pinzón-Fuchs (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Lawrence R. Klein (1920-2013) played a major role in the construction and in the further dissemination of econometrics from the 1940s. Considered as one of the main developers and practitioners of macroeconometrics, Klein's influence is reflected in his application of econometric modelling " to the analysis of economic fluctuations and economic policies " for which he was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1980. The purpose of this paper is to give an account of Klein's image of econometrics focusing on his early period as an econometrician (1944-1950), and more specifically on his period as a Cowlesman (1944-1947). Independently of how short this period might appear, it contains a set of fundamental publications and events, which were decisive for Klein's conception of econometrics, and which formed Klein's unique way of doing econometrics. At least four features are worth mentioning, which characterise this uniqueness. First, Klein was the only Cowlesman who carried on the macroeconometric programme beyond the 1940s, even if the Cowles had already abandoned it. Second, his pluralistic approach in terms of economic theory allowed him not only to use the Walrasian framework appraised by the Cowles Commission and especially by T.C. Koopmans, but also the Marxian and Keynesian frameworks, enriching the process of model specification and motivating economists of different stripes to make use of the nascent econometrics. Third, Klein differentiated himself from the rigid methodology praised at Cowles; while the latter promoted the use of highly sophisticated methods of estimation, Klein was convinced that institutional reality and economic intuition would contribute more to econometrics than the sophistication of these statistical techniques. Last but not least, Klein never gave up what he thought was the political objective of econometrics: economic planning and social reform. |
| Keywords: | Economic Epistemology,History of Econometrics,History of Macroeconometric Modelling,Pluralism in Econometrics,Lawrence R Klein,Cowles Commission |
| Date: | 2016–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01364809&r=hpe |
| By: | Erich Pinzón-Fuchs (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper discusses a longstanding debate between two empirical approaches to macroeconomics: the econometrics program represented by Lawrence R. Klein, and the statistical economics program represented by Milton Friedman. I argue that the differences between these two approaches do not consist in the use of different statistical methods, economic theories or political ideas. Rather, these differences are deeply rooted in methodological principles and modeling strategies inspired by the works of Léon Walras and Alfred Marshall, which go further than the standard opposition of general vs. partial equilibrium. While Klein’s Walrasian approach necessarily considers the economy as a whole, despite the economist’s inability to observe or understand the system in all its complexity, Friedman’s Marshallian approach takes into account this inability and considers that economic models should be perceived as a way to construct systems of thought based on the observation of specific and smaller parts of the economy. |
| Keywords: | Lawrence R. Klein, Milton Friedman, macroeconometric modeling, Cowles Commission, National Bureau of Economic Research, empirical approaches to macroeconomics, controversy on statistical illusions, Walras-Marshall methodological divide. |
| Date: | 2016–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01364812&r=hpe |
| By: | Breinbjerg, Jesper (Department of Business and Economics) |
| Abstract: | We examine a non-cooperative queueing game where a finite number of customers seek service at a bottleneck facility which opens at a given point in time. The facility servers one customer at a time on a first-come, first-serve basis and the amount of time required to service each customer is identically and independently distributed according to some general probability distribution. The customers must individually choose when to arrive at the facility, and they prefer to complete service as early as possible, while minimizing the time spent waiting in the queue. These preferences are captured by a general utility function which is decreasing in the waiting time and service completion time of each customer. Applications of such queueing games range from people choosing when to arrive at a grand opening sale to travellers choosing when to line up at the gate when boarding an airplane. We develop a constructive procedure that characterizes an arrival strategy which constitutes a symmetric Nash equilibrium and show that there is at most one symmetric equilibrium. We accompany the equilibrium characterization with numerically computed examples of symmetric equilibria induced by a non-multilinear utility function. |
| Keywords: | Non-cooperative queueing games; strategic arrivals; Nash equilibrium |
| JEL: | C72 D62 R41 |
| Date: | 2016–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2016_006&r=hpe |
| By: | Goyal, S. |
| Abstract: | Networks influence human behavior and well being, and realizing this, individuals make conscious efforts to shape their own networks. Over the past decade, economists have combined these ideas with concepts from game theory, oligopoly, general equilibrium, and information economics to develop a general framework of analysis. The ensuing research has deepened our understanding of classical questions in economics and opened up entirely new lines of enquiry. |
| Date: | 2016–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1652&r=hpe |
| By: | François Vatin (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Panthéon-Sorbonne - UP8 - Université Paris 8, Vincennes-Saint-Denis - Université d'Evry-Val d'Essonne - UPOND - Université Paris Ouest Nanterre La Défense - CNRS - Centre National de la Recherche Scientifique); Jean-Pascal Simonin (Granem - Groupe de Recherche ANgevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage); Luc Marco (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This book is the translation, actualized and augmented, of a precedent scientific book, published in 2002 at the University Press of Angers. Since fifteen years, it allows to profoundly refunded the researches on the engineer and the economist Jules Dupuit (1804-1866). This new version has two parts : the first study the intellectual way form calculus to utility theory. The second deals with the analytical economic thought of the author, so important into the history of the political economy and management. Completing the general works published in 2009 at the Economica's editions, this new book will interest the economists, managers, sociologists and all the historians in their comprehension of the analytic way of this prolific author. It'll be able to push in the international research on Jules Dupuit. |
| Abstract: | Ce livre est la traduction, actualisée et augmentée, d’un ouvrage scientifique paru en 2002 aux Presses Universitaires d’Angers. En une quinzaine d’années il a permis de renouveler profondément les recherches sur l’ingénieur et économiste Jules Dupuit (1804-1866). Cette nouvelle version contient deux grandes parties : la première étudie le chemin intellectuel qui va du calcul d’ingénieur à la théorie de l’utilité. La deuxième traite de l’analyse économique de cet auteur, si important dans l’histoire de la pensée analytique de l’économie et de la gestion. En complément des œuvres choisies publiées en 2009 à Paris aux Editions Economica, ce nouveau livre pourra intéresser les économistes, les gestionnaires, les sociologues et tous les historiens qui veulent comprendre le cheminement analytique de cet auteur prolifique, œuvrant au cœur du XIXe siècle français. Il pourra relancer à son tour la recherche internationale sur Jules Dupuit. |
| Keywords: | Economics and theory of the firm,Sciences économiques et théorie de la firme |
| Date: | 2016–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01335642&r=hpe |
| By: | Pugno, Maurizio |
| Abstract: | The distinction made by the classical economists between necessaries and luxuries is weakened by two problems: how to draw the line between necessaries and luxuries in advanced modern economies; how to evaluate luxuries, whether positively for individual’s freedom and for the economy, or negatively because they appear unethical. This paper examines a possible way out of these problems that emerges both from Scitovsky’s approach to “human welfare” and from some overlooked insights of Marshall, Hawtrey, and Keynes, the Cambridge economists who inspired Scitovsky. The proposal is to split luxuries into two components, and to redefine them, together with necessaries, on the basis of people’s motivations and goals, as well as of the effects on well-being and on the economy. |
| Keywords: | necessaries, luxuries, Scitovsky, well-being, welfare, Marshall, Hawtrey, Keynes |
| JEL: | B20 D11 D60 I25 I31 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73729&r=hpe |
| By: | Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Have we correctly read Henri Fayol? His work is still reduced to general principles of administration that seem rigid and trivial. Yet, he has been a great innovative leader that considered scientific research as a major task of the business executive. A new reading of Fayol's masterpiece shows that he introduced sophisticated notions: " the unknown " , " the program of action " , " the advancement " , which meaning was erased by his translators or forgotten. Coming from political and social philosophy, they describe a manager that faces a future made unpredictable by the emergence of science and assigns to the modern entreprise a new collective purpose. |
| Abstract: | At on bien lu Henri Fayol ? Sa pensée a trop souvent été réduite à l'énoncé de principes d'administration rigides et banaux. Il fut pourtant un dirigeant innovateur qui considérait la recherche scientifique comme une responsabilité majeure du chef d'entreprise. A partir d'une relecture de son oeuvre principale, nous montrons que Fayol introduit des notions peu communes « d'inconnu », de « programme d'action », et de « perfectionnement » qui ont été par la suite banalisées ou oubliées. Puisées dans la philosophie politique et sociale, elles décrivent un dirigeant qui veut faire face à l'indétermination de l'avenir que provoque l'émergence de la science et donner à l'entreprise une mission collective nouvelle. |
| Keywords: | Fayol, entreprise, innovation, histoire, science, chef d'entreprise |
| Date: | 2016–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01361243&r=hpe |
| By: | Philippe Bich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | We introduce the new concept of prudent equilibrium to model strategic uncertainty, and prove it exists in large classes of discontinuous games. When the game is better-reply secure, we show that prudent equilibrium refines Nash equilibrium. In contrast with the current literature, we don't use probabilities to model players' strategies and beliefs about other players' strategies. We provide examples (first-price auctions, location game, Nash demand game, etc.) where the prudent equilibrium is the intuitive solution of the game. |
| Keywords: | prudent equilibrium,Nash equilibrium,refinement,strategic uncertainty,better-reply secure |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01337293&r=hpe |
| By: | Alain Béraud (THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This communication tries to solve three enigmas. Why the article where Muth develops his analysis of the rational anticipations was ignored for so long? Why Muth seemed to lose interest in his idea when its was finally discussed? The notion of rational anticipations is used in several domains of the political economy: the game theory, the macroeconomics and the theory of financial markets efficiency. Why the similarity of these approaches was ignored for so long? |
| Abstract: | Cette communication cherche à résoudre trois énigmes. Pourquoi l'article où Muth développe son analyse des anticipations rationnelles fut-il si longtemps ignoré ? Pourquoi Muth sembla se désintéresser de cette idée quand elle fut enfin discutée ? La notion d'anticipations rationnelles est utilisée dans plusieurs domaines qui relèvent de l'économie politique: la théorie des jeux, la macroéconomie et la théorie de l'efficience des marchés financiers. Pourquoi la similitude de ces approches fut-elle si longtemps ignorée. |
| Keywords: | Rational Expectations,John F. Muth,New Classical School,Efficient Markets,Marchés efficients,Anticipations rationnelles,Nouvelle école classique |
| Date: | 2016–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01353832&r=hpe |
| By: | Giulia Meloni; Johan Swinnen |
| Abstract: | In 2008, the EU voted to liberalize its system of planting rights which has strictly regulated vine plantings in the EU. However, after an intense lobbying campaign the liberalization of the planting right system was overturned in 2013 and new regulations created an even more restrictive system. European wine associations complained about the detrimental effects of the new regulations. There is a precedent in history. In 1726, the French political philosopher and landowner Montesquieu complained to the French King about the prohibition on planting new vines. Montesquieu was not successful in his demands to remove the planting rights. Old and recent history suggests that political forces against liberalization of planting rights are very strong. Only the French Revolution in 1789 led to a fundamental liberalization of planting rights. The “liberal period” of the 19th century was sustained by the combination of the French Revolution’s liberal ideology, the thirst for wine of Napoleon’s armies and diseases that wiped out most of the French vineyards. That said, in the past and the present, enforcement of planting rights is a major problem. In fact, despite the official restrictions, Montesquieu managed to plant his vines, allowing him to become a successful wine producer and merchant and to travel and to spend time thinking, discussing and ultimately writing up his ideas which influenced much of the Western world’s constitutions. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:36715&r=hpe |
| By: | Victoria Kreps (National Research University Higher School of Economics) |
| Abstract: | We consider finite non-cooperative N person games with fixed numbers mi, i = 1, . . . , N , of pure strategies of player i. We propose the following question: is it possible to extend the vector space of finite non-cooperative m1 ? m2 ? . . . ? mN - games in mixed strategies such that all games of a broader vector space of non- cooperative N person games on the product of unit (mi ? 1)-dimensional simpleces have Nash equilibrium points? We get a necessary and sufficient condition for the negative answer. This condition consists of a relation between the numbers of pure strategies of the players. For two-person games the condition is that the numbers of pure strategies of the both players are equal |
| Keywords: | Finite non-cooperative N person games, vector space, Nash equilibrium point, maximality. |
| JEL: | C72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:150/ec/2016&r=hpe |
| By: | Aurélien Goutsmedt (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Erich Pinzon-Fuchs (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Matthieu Renault (IRIF - Institut de Recherche en Informatique Fondamentale - UP7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique); Francesco Sergi (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The standard history of macroeconomics considers Lucas (1976)– “the Lucas Critique”–as a path-breaking innovation for the discipline. According to this view Lucas’s article dismissed the traditional macroeconometric practice calling for new ways of conceiving the quantitative evaluation of economic policies. The Lucas Critique is considered, nowadays, as a fundamental principle of macroeconomic modeling (Woodford, 2003). The interpretation and the application of the Critique, however, represent still unsolved issues in economics (Chari et al., 2008). Even if the influence of Lucas’s contribution cannot be neglected, something seems to be missing in the narrative: the reactions of the economists that were directly targeted by the Critique. Modeling practices of economic policy evaluation were not overthrown immediately after Lucas (1976), creating a divide between theoretical and applied macroeconomics (Brayton et al., 1997). In the first section we propose a careful account of Lucas’s argument and of some of the previous works anticipating the substantial outline of the Critique (like Frisch’s notion of autonomy). Second, we bring our own interpretation of Lucas (1976). We find two points of view in Lucas's paper: a prescriptive one that tell how to build a good macroeconometric model (it is the standard interpretation of the article); a positive one that relies on the fact that the Lucas critique could be seen as an attempt to explain a real-world phenomenon: stagflation. Third, we classify the reactions of the Keynesian macroeconometricians following this line of interpretation. On the prescriptive side, the Keynesians protested against the New Classical solution to the Lucas critique (the use of the rational expectation hypothesis among other things). Klein, for instance, proposed an alternative microfoundational program to empirically study the formation of expectations. On the positive side, the Keynesians put into question the relevance of the Lucas Critique to explain the rise of both unemployment and inflation in the 1970s. They tried to test the impact of policy regime changes and of shifts in agents' behavior. We argue that the explanation of the stagflation was elsewhere. The purpose of this paper is to study the reactions of the macroeconometricians criticized by Lucas. We focus especially on those macroeconometricians who worked on policy evaluation and who held an expertise position in governmental institutions. We categorize the different reactions to the Critique, in order to enrich the understanding of the evolution of modeling and expertise practices through the analysis of the debates–which have not yet been completely solved. |
| Keywords: | History of macroeconomics, Keynesian economics, Lu- cas Critique, Macroeconometrics, Rational Expectations. |
| Date: | 2016–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01364814&r=hpe |
| By: | Ho, Chi Pui |
| Abstract: | We develop a unified growth theory with Industrious Selection to explain the Five Revolutions in the development process (Agricultural Revolution, Structural Transformation, Industrial Revolution, Industrious Revolution, Demographic Revolution) and the Two Divergences in Eurasia (Little Divergence, Great Divergence) in AD0-AD2000. Industrious Selection refers to industrious (hardworking and cooperative) individuals gradually dominating the population composition through labor-leisure optimization and income effect on births. It raises working hours, improves production efficiency and accelerates development. The Black Death expedited Industrious Selection in late-Medieval Europe. Together with the population scale effect, the theory reconciles the British development process and Eurasian economic divergence during AD0-AD2000. |
| Keywords: | Industrious Selection; Eurasian Economic History; Unified Growth Theory |
| JEL: | E10 N10 O5 |
| Date: | 2016–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73862&r=hpe |
| By: | Ocean, Neel (University of Warwick) |
| Abstract: | Recently, a novel attempt has been made to estimate priorities for the different aspects of subjective well-being, in order to understand where resources might best be allocated. However, the determinants of, and life cycle trends for prioritisation have yet to be studied. This paper - the first to study these issues - finds no consistent evidence of variation in priorities over the life cycle, unlike the ‘mid-life crisis’ observed for levels. Life satisfaction is the most valued aspect of well-being throughout life. However, people overestimate the value placed by others on happiness. Well-being priorities are strongly influenced by well-being levels, and individual fixed effects such as personality, health level, and smoking frequency. The separation of aspects into cognitive and affective factors may provide additional insight into how individuals generate priorities, and hence inform the optimal targeting of policy.Keywords: JEL Classification: |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:301&r=hpe |
| By: | Özge Dilaver (University of Surrey); Robert Jump (Kingston University London); Paul Levine (University of Surrey) |
| Abstract: | Agent-based computational economics (ACE) has been used for tackling major research questions in macroeconomics for at least two decades. This growing field positions itself as an alternative to dynamic stochastic general equilibrium (DSGE) models. In this paper we first review the arguments raised against DSGE in the ACE literature. We then review existing ACE models, and their empirical performance. We then turn to a literature on behavioural New Keynesian models that attempts to synthesise these two approaches to macroeconomic modelling by incorporating some of the insights of ACE into DSGE modelling. We highlight the individually rational New Keynesian model following Deak et al. (2015) and discuss how this line of research can progress. |
| JEL: | E03 E12 E32 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:0116&r=hpe |
| By: | Stillman, Steven (Free University of Bozen/Bolzano); Velamuri, Malathi |
| Abstract: | A number of recent papers have found that non-cognitive skills and in particular, locus of control (LoC), are important predictors of success in life in terms of both traditional labor market and socioeconomic outcomes, and measures of subjective wellbeing. Specifically, the literature has found a strong correlation between having an internal locus of control and standard measures of success and happiness. In this paper, we examine whether having an internal LoC also helps people manage the consequences of two mainly unanticipated negative shocks, being a crime victim and experiencing a serious illness or injury. We find that these events have large negative consequences on both subjective wellbeing and objective economic outcomes. For men, these shocks have smaller effects on subjective wellbeing when they are more internal but that the long-run effects on income are no smaller. On the other hand, for women with an internal LoC, we find some evidence that these shocks have larger impacts. We draw on the psychology literature to discuss the results. |
| Keywords: | locus of control, crime, illness, wellbeing, HILDA |
| JEL: | I31 J16 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10210&r=hpe |
| By: | Xiu Chen (Department of Economics, Hong Kong University of Science and Technology, Hong Kong); Fuhai Hong (Division of Economics, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332.); Xiaojian Zhao (Department of Economics, Hong Kong University of Science and Technology, Hong Kong) |
| Abstract: | This paper investigates how people’s forecasts about financial market are shaped by the environment, in which people interact before making investment decisions. By recruiting 1385 subjects on WeChat, one of the largest social media, we conduct an online experiment of artificial investment games. Our treatments manipulate whether subjects can observe others’ forecasts and whether subjects engage in public or private investment decisions. We find that subjects’ forecasts significantly converge when shared, though in different directions across groups. We also observe a strong positive correlation between forecasts and investments, suggesting that an individual’s reported forecast is associated with his belief. |
| Keywords: | forecast, investment, online experiment |
| JEL: | C90 D83 D84 G11 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:1608&r=hpe |
| By: | Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University) |
| Abstract: | Researchers have proposed various theories to explain overbidding in rent-seeking contents, including mistakes, systematic biases, the utility of winning, and relative payoff maximization. Through an eight-part experiment, we test and find significant support for the existing theories. Also, we discover some new explanations based on cognitive ability and impulsive behavior. Out of all explanations examined, we find that impulsivity is the most important factor explaining overbidding in contests. |
| Keywords: | rent-seeking, contest, competition, impulsive behavior, experiments |
| JEL: | C72 C91 D01 D72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:16-21&r=hpe |
| By: | Jean-Luc Gaffard (OFCE Sciences PO et SKEMA Business School) |
| Abstract: | L’Union Européenne et plus particulièrement la zone euro se sont construites au cours du dernier quart de siècle en appliquant une doctrine économique articulée au tour de deux principes : la flexibilité des marchés de biens et du travail, la neutralité monétaire et budgétaire de l’action publique. C’est à un recul de la souveraineté des Etats auquel l’on a ainsi assisté au nom d’une certaine vision du libéralisme. Cette évolution institutionnelle est emblématique du paradoxe de la mondialisation (Rodrik 2011) qui veut que, faute d’un gouvernement mondial, la mondialisation des échanges requière une action des Etats réduite à l’application de règles intangibles édictées par la doctrine au détriment de la démocratie et des arbitrages que celle?ci implique. Il n’y aurait pas d’alternative autre que le repli à l’abri des frontières nationales permettant éventuellement de sauvegarder le principe démocratique mais au détriment de l’expansion des échanges et, possiblement, de la croissance. Pourtant, la question de la souveraineté comme celle du libéralisme ne sauraient être tranchées aussi facilement. Un débat existe qui conduit à considérer qu’une alternative au modèle du moment est possible qui rétablit les Etats dans leurs prérogatives sans qu’il faille renoncer aux bénéfices de la mondialisation. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1620&r=hpe |
| By: | Schroyen, Fred; Treich, Nicolas |
| Abstract: | The relationship between wealth and power has long been debated. Nevertheless, this relationship has been rarely studied in a strategic game. In this paper, we study wealth effects in a strategic contest game. Two opposing effects arise: wealth reduces the marginal cost of effort but it also reduces the marginal benefit of winning the contest. We consider three types of contests which vary depending on whether rents and efforts are commensurable with wealth. Our theoretical analysis shows that the effects of wealth are strongly "contestdependent". It thus does not support general claims that the rich lobby more or that low economic growth and wealth inequality spur conflicts. |
| Keywords: | Conflict, contest, rent-seeking, wealth, risk aversion, lobbying, power, redistribution. |
| JEL: | C72 D72 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:30893&r=hpe |
| By: | Ivan Pastine |
| Abstract: | Since a fixed exchange rate regime is a fixed price system, there is no theoretical reason to presume that the foreign exchange market clears, particularly during a speculative attack. This paper shows that equilibria where we allow for the possibility of such corner solutions are a superset of the previously examined “market-clearing” equilibria. The timing of the balance-of-payments crisis is no longer predictable in the same sense – multiple equilibria exist even in the very simplest speculative attack model. |
| Keywords: | Balance-of-payments crises; Fixed exchange rate breakdown |
| JEL: | F31 E58 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201613&r=hpe |
| By: | Abigail Barr (School of Economics, University of Nottingham); Georgia Michailidou (University of Nottingham, School of Economics) |
| Abstract: | We use a novel experiment to investigate whether people aim to coordinate when, to do so, they have to lie; and are more willing to lie when, in doing so, they are aiming to coordinate with a potential accomplice, i.e., another with whom coordination would be beneficial and who is facing the same individual and mutual incentives and the same moral dilemma. We find that people often aim to coordinate when they have to lie to do so and that having a potential accomplice increases willingness to lie even when that potential accomplice is a stranger and communication is not possible. |
| Keywords: | complicity, lying, coordination, die rolling task |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2016-14&r=hpe |
| By: | Ryan Chahrour (Boston College); Kyle Jurado (Duke University) |
| Abstract: | The macroeconomic literature on belief-driven business cycles treats news and noise as distinct representations of people's beliefs about economic fundamentals. We prove that these two representations are actually observationally equivalent. This means that the decision to use one representation or the other must be made on theoretical, and not empirical, grounds. Our result allows us to determine the importance of beliefs as an independent source of fluctuations. Using three prominent models from this literature, we show that existing research has understated the importance of independent shocks to beliefs. This is because representations with anticipated and unanticipated shocks mix the fluctuations due independently to beliefs with the fluctuations due to fundamentals. We also argue that the observational equivalence of news and noise representations implies that structural vector auto-regression analysis is equally appropriate for recovering both news and noise shocks. |
| Date: | 2016–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:917&r=hpe |
| By: | Yew-Kwang NG (Division of Economics, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332.) |
| Abstract: | Extending traditional economic policy analysis to include factors emphasized by other social scientists and philosophers, more social and public policy issues may be analyzed more adequately. For example, should the market expand beyond its traditional confines of goods and services? Should more immigration be allowed? Wider effects like social harmony, repugnance and morality should also be considered. Though the extended analysis does not provide a definite general answer, in combination with the first theorem of welfare economics and the principle of treating a dollar as a dollar in specific issues, it provides some general propositions that guide the analysis of relevant costs and benefits of specific policy changes beyond narrow economic efficiency. |
| Keywords: | Economic analysis; public policy; political economy; economics imperialism; markets; morals. |
| JEL: | H D6 A12 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:1609&r=hpe |
| By: | Abeler, Johannes (University of Oxford); Nosenzo, Daniele (University of Nottingham); Raymond, Collin (Amherst College) |
| Abstract: | Private information is at the heart of many economic activities. For decades, economists have assumed that individuals are willing to misreport private information if this maximizes their material payoff. We combine data from 72 experimental studies in economics, psychology and sociology, and show that, in fact, people lie surprisingly little. We then formalize a wide range of potential explanations for the observed behavior, identify testable predictions that can distinguish between the models and conduct new experiments to do so. None of the most popular explanations suggested in the literature can explain the data. We show that only combining a preference for being honest with a preference for being seen as honest can organize the empirical evidence. |
| Keywords: | private information, honesty, truth-telling, lying, meta study |
| JEL: | D03 D82 H26 I13 J31 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10188&r=hpe |
| By: | Sacchetti, Silvia (Associazione Italiana per la Cultura della Cooperazione e del Non Profit); Tortia, Ermanno (Associazione Italiana per la Cultura della Cooperazione e del Non Profit) |
| Abstract: | New-institutional economics hypothesizes imperfect rationality, self-seeking preferences, monetary-related needs, and opportunism as fundamental features of human behavior. Consistently, new-institutionalist models of governance highlight the efficiency and transaction costs minimizing features of control rights and governance. Differently, needs theory of governance, as here presented, hypothesizes imperfect rationality, multiple needs, and reciprocity, in which case opportunism is reduced to an exception to individual behavior. Consistently, it presents a theory that links production governance with the wellbeing of those partaking in production. Building on Maslow’s human psychology, the governance model suggested in this paper is aimed at evidencing the self-actualization potential of control rights, organizational structures and practices. The application of Maslow’s theory to the institutional structure of organizations suggests that the deepest organizational layers (control rights and governance) broadly correspond to the most basic needs in Maslow’s theory (survival, security and belonging), while the outer layers (managerial models and employment relations) correspond to the fulfillment of the highest needs (self-esteem and self-actualization). Cooperative firms are used as an illustration of governance solutions consistent with needs theory in human psychology. |
| Keywords: | new-institutional economics; opportunism; governance; needs theory; human psychology; self-fulfillment; cooperative firms; inclusive governance. |
| JEL: | H10 |
| Date: | 2016–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:aiccon:2016_151&r=hpe |
| By: | Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel |
| Abstract: | Studying a high-stakes field setting, we examine which individuals, on an ideological scale, conform more to the opinion of others. In the U.S. Courts of Appeals, legal precedents are set by ideologically diverse and randomly composed panels of judges. Using exogenous predictors of ideology and rich voting data we show that ideological disagreements drive dissents against the panel’s decision, but ideologically extreme judges are caving in: they are the least likely to dissent and their voting records are the least correlated with their predicted ideology. Meanwhile, moderately ideological judges are dissenting the most despite evidence that they are more often determining the opinion. Our theoretical analysis shows that these findings are most consistent with a model of decision making in the presence of peer pressure with a concave cost of deviating from one’s ideological convictions – perfectionism. This result presents a critique of a standard assumption in economics – that the cost of deviating from one’s bliss point is convex – with fundamental implications for decision making in social and political settings and for the empirical predictions of theoretical models in these domains. |
| Keywords: | Judicial decision making, group decision making, ideology, peer pressure. |
| JEL: | D7 K00 Z1 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:30796&r=hpe |
| By: | Aurélien Goutsmedt (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The stagflation phenomenon is regarded as one of the cause of the Keynesian paradigm breakdown in the 1970s. The New Classical school took advantage of this breakdown. However, its discourse on the stagflation was not so clear and remained in a implicit shape. The paper aim at rebuilding the New Classical tale of the stagflation that stroke the United-States economy in the 1970s. We show that psychological ideas (expectations, beliefs, credibility) lay in the heart of the explanation. In the same time, oil shocks were left in the background. Besides, the New Classical school put much more emphasis on the inflation issue and experienced some difficulties to deal with the increase in unemployment. |
| Keywords: | History of Macroeconomics,Macroeconomics,New Classical School,Stagflation |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01281962&r=hpe |
| By: | Ohid Yaqub (cience Policy Research Unit, University of Sussex, UK) |
| Abstract: | Serendipity, the notion of researchers making unexpected and beneficial discoveries, has played an important role in debates about the feasibility and desirability of targeting public R&D investments. The purpose of this paper is to show that serendipity can come in different forms and come about in a variety of ways. The archives of Robert K Merton, who introduced the term to the social sciences, were used as a starting point for gathering literature and examples. We identify four types of serendipity (Walpolian, Mertonian, Browsing, Curiosity) together with four mechanisms of serendipity (Theory-led, Observer-led, Error-borne, and Network-emergent). We also discuss implications of the different types and mechanisms for theory and policy. |
| Keywords: | serendipity, uncertainty, research policy, science policy, technology policy, innovation management |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2016-17&r=hpe |