nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2017‒04‒23
thirteen papers chosen by
Erik Thomson
University of Manitoba

  1. From one form of sympathy to another: Sophie de Grouchy’s translation of and commentary on Adam Smith’s Theory of Moral Sentiments By Laurie Bréban; Jean Dellemotte
  2. Speculation rather than enterprise? Keynes' beauty contest revisited in theory and experiment By Kene Boun My; Camille Cornand; Rodolphe Dos Santos Ferreira
  3. Hayek’s Nobel By Bruce Caldwell
  4. Is Something Really Wrong with Macroeconomics? By Ricardo Reis
  5. The Spirits of Neoliberal Reforms and Everyday Politics of the State in Africa By Béatrice Hibou; Boris Samuel; Laurent Fourchard
  6. Equilibrium in risk-sharing games By Michail Anthropelos; Constantinos Kardaras
  7. Facing Yourself: A Note on Self-Image By Falk, Armin
  8. Computation of Cournot-Nash equilibria by entropic regularization By Blanchet, Adrien; Carlier, Guillaume; Nenna, Luca
  9. Learning to Disagree in a Game of Experimentation By Bonatti, Alessandro; Hörner, Johannes
  10. Institutions as Emergent Phenomena: Redefining Downward Causation By Nicolas Brisset
  11. Mondialisation Un modèle « anglo-américain » de l'organisation ? By Yvon Pesqueux
  12. Psychology into economics: fast and frugal heuristics By Schilirò, Daniele
  13. Hammond’s Equity Principle and the Measurement of Ordinal Inequalities By Nicolas Gravel; Brice Magdalou; Patrick Moyes

  1. By: Laurie Bréban (PHARE - Philosophie, Histoire et Analyse des Représentations Economiques - UNIVERSITE PARIS 1 PANTHEON-SORBONNE - CNRS - Centre National de la Recherche Scientifique); Jean Dellemotte (PHARE - Philosophie, Histoire et Analyse des Représentations Economiques - UNIVERSITE PARIS 1 PANTHEON-SORBONNE - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper focuses on Sophie de Grouchy’s French translation of the Theory of Moral Sentiments (1759-1790), published in 1798 and praised, from the very moment of its publication. It aims at emphasizing Grouchy’s reading of Smith’s moral philosophy on some particular points as it might have influence her translation of the TMS. Indeed, one important aspect of Grouchy’s Lettres, which concerns their reevaluation of Smithian sympathy, has been usually ignored by commentators. Curiously, whereas most contributions deals with the Marchioness’ translation, there is scarce any comment on her reading of Smith’s analysis (on the notable exception of Forget 2001). Yet, this could help to explain the distances that she sometimes took with Smith original vocabulary in her translation. In order to fulfill our aim, we first discuss the main features of this translation in the light of what has been pointed out by scholars. Most commentators agree that, despite its particular respect for the original text, Grouchy’s translation is not completely literal (Biziou, Gautier and Pradeau 1999). However, we only partially share some existing interpretations of these modifications such as the one of Bernier (2010) or Britton (2009). Our interpretation relies on the critics that Grouchy addresses to Smith’s moral philosophy in her Lettres. This leads us, in a second time, to emphasizes major philosophical differences between both authors; differences that Grouchy unfortunately underestimate. The reason that we put to the fore is the following: Grouchy analyzes Smith’s thinking in the light of a philosophical framework inconsistent with his moral philosophy as it precisely corresponds to the kind of system that he criticizes. To conclude, we open the path to alternative interpretations of some Grouchy’s choices of translation.
    Keywords: Adam Smith, Sophie de Grouchy, Sympathy, Enlightenment
    Date: 2016–04–04
  2. By: Kene Boun My (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Camille Cornand (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Rodolphe Dos Santos Ferreira (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In Keynes' beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty. Abstract In Keynes' beauty contest, agents make evaluations reflecting both an expected fun
    Keywords: dispersed information,public information,beauty contest,coordination,experiment
    Date: 2017
  3. By: Bruce Caldwell
    Abstract: The paper offers a number of vignettes surrounding Friedrich A. Hayek’s receipt of the Nobel Prize. It examines Hayek’s life before he got the prize, describes the events in Stockholm, and offers a summary of the main themes of his Prize Lecture. It then examines the subsequent impact on Hayek’s life and career. It concludes by looking at the impact of the Prize on scholarship about Hayek and the Austrian movement.
    Keywords: Friedrich A. Hayek; Nobel Prize; Gunnar Myrdal; pretence of knowledge; Austrian economics
    JEL: J1
    Date: 2016
  4. By: Ricardo Reis (Economics Department London School of Economics (LSE); Centre for Macroeconomics (CFM))
    Abstract: While there is much that is wrong with macroeconomics today, most critiques of the state of macroeconomics are off target. Current macroeconomic research is not mindless DSGE modeling filled with ridiculous assumptions and oblivious of data. Rather, young macroeconomists are doing vibrant, varied, and exciting work, getting jobs, and being published. Macroeconomics informs economic policy only moderately and not more nor all that differently than other fields in economics. Monetary policy has benefitted significantly from this advice in keeping inflation under control and preventing a new Great Depression. Macroeconomic forecasts perform poorly in absolute terms and given the size of the challenge probably always will. But relative to the level of aggregation, the time horizon, and the amount of funding, they are not so obviously worst than those in other fields. What is most wrong with macroeconomics today is perhaps that there is too little discussion of which models to teach and too little investment in graduate-level textbooks.
    Date: 2017–03
  5. By: Béatrice Hibou (Centre de recherches internationales); Boris Samuel; Laurent Fourchard (Centre de recherches internationales)
    Abstract: This book, composed of articles first published in the journal Politique africaine, proposes an original interpretation of neoliberalism in Africa. Instead of seeing neoliberal reforms as intrinsically destructive of the post-colonial state, the authors, who include some of Africa’s best-known social scientists, focus on the resilience and adaptability of African state structures, economic systems, and social survival mechanisms and examine the diversity of responses to neoliberalism in what the editors call the “everyday politics of the state.” In essays that range from diverse theoretical or historical discussions to close studies of the dynamics of specific reforms in particular places, they argue against univocal interpretations of the effects of neoliberalism. They show that the African state, far from disappearing, is adapting and reconfiguring itself in fascinating new social realities “co-constructed” by state action as well as by the improvisations of communities and other private actors. (Publisher's abstract)
    Keywords: Africa; Neoliberalism; Reform
    Date: 2016–12
  6. By: Michail Anthropelos; Constantinos Kardaras
    Abstract: The large majority of risk-sharing transactions involve few agents, each of whom can heavily influence the structure and the prices of securities. In this paper, we propose a game where agents’ strategic sets consist of all possible sharing securities and pricing kernels that are consistent with Arrow–Debreu sharing rules. First, it is shown that agents’ best response problems have unique solutions. The risk-sharing Nash equilibrium admits a finite-dimensional characterisation, and it is proved to exist for an arbitrary number of agents and to be unique in the two-agent game. In equilibrium, agents declare beliefs on future random outcomes different from their actual probability assessments, and the risk-sharing securities are endogenously bounded, implying (among other things) loss of efficiency. In addition, an analysis regarding extremely risk-tolerant agents indicates that they profit more from the Nash risk-sharing equilibrium than compared to the Arrow–Debreu one.
    JEL: C72 G12 L13
    Date: 2017–03–21
  7. By: Falk, Armin (briq, University of Bonn)
    Abstract: Numerous signaling models in economics assume image concerns. These take two forms, as relating either to social image or self-image. While empirical work has identified the behavioral importance of the former, little is known about the role of self-image concerns. We exogenously vary self-image concerns in manipulating self-directed attention and study the impact on moral behavior. The choice context in the experiment is whether subjects inflict a painful electric shock on another subject to receive a monetary payment. Three between-subjects conditions are studied. In the main treatment, subjects see their own face on the decision screen in a real-time video feed. In the two control conditions, subjects see either no video at all or a neutral video. We find that the exogenous increase in self-image concerns significantly reduces the fraction of subjects inflicting pain.
    Keywords: self-image, moral behavior
    JEL: D64 C91
    Date: 2017–03
  8. By: Blanchet, Adrien; Carlier, Guillaume; Nenna, Luca
    Abstract: We consider a class of games with continuum of players where equilibria can be obtained by the minimization of a certain functional related to optimal transport as emphasized in [7]. We then use the powerful entropic regularization technique to approximate the problem and solve it numerically in various cases. We also consider the extension to some models with several populations of players.
    Keywords: Optimal transport; entropic regularization ; Cournot-Nash equilibria
    Date: 2017–03
  9. By: Bonatti, Alessandro; Hörner, Johannes
    Abstract: We analyze strategic experimentation in which information arrives through fully revealing, publicly observable “breakdowns.” When actions are hidden, there exists a unique symmetric equilibrium that involves randomization over stopping times. With two players, this is the unique equilibrium. Randomization leads to dispersion in actions and to belief disagreement on the equilibrium path. The resulting lack of coordination has significant welfare consequences. In contrast, when actions are observable, the equilibrium is pure and welfare improves.
    Keywords: Experimentation, free-riding, mixed strategies, monitoring, delay.
    JEL: C73 D83 O33
    Date: 2017–03
  10. By: Nicolas Brisset (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The concept of emergence is frequently used in the social sciences in order to characterize social institutions. Nevertheless, philosophy of mind argues that the idea of emergence is problematic because it encompasses the dubious notion of downward causation, i.e. the fact that an entity at a given ontological level might have a causal influence on lower level entities. This work shows that although it is problematic in some fields, emergence is an ontological feature of the social world. In order to justify this point of view and to show how institutions relate to individuals’ actions, we define an institution as an exogenous device, which enables us to show that the relationship between institution and individual actions is not only a causal one but also an intersubjective and a constitutive one.
    Keywords: Emergent Phenomena, Institution, Downward Causation, Convention.
    Date: 2016–04–11
  11. By: Yvon Pesqueux (LIRSA - Laboratoire Interdisciplinaire de Recherche en Sciences de l'Action - CNAM - Conservatoire National des Arts et Métiers [CNAM])
    Abstract: Si, avec la mondialisation, on se pose la question de savoir s'il s'agit d'une métaphore, alors, comme toute métaphore, il s'agit de savoir à quoi la notion se substitue. Ne serait-ce pas la remise en question de la souveraineté de l'Etat-nation, où territoire géographique et territoire institutionnel de la souveraineté sont confondus. Rappelons que la souveraineté s'exprime par l'expression d'une autorité au travers d'instruments formels de gouvernement et venant produire une régulation a priori et indiscutable. A ce moment-là, la mondialisation pourrait être considérée comme une version floue de la privatisation. De la souveraineté Cette crise de la souveraineté de l'Etat-nation est en effet une des caractéristiques du « moment libéral » 1 dont la déterritorialisation suscite, en réponse, quatre acceptions de la souveraineté, outre celle qui subsiste pour l'Etat-nation, deux économiques, une politique et une à la fois politique et territoriale au sens géographique du terme :-la CorporateGovernance constitue la forme codifiée de la souveraineté dans le cadre d'un territoire économique, celui de la grande entreprise, matérialisation d'une inter-régulation venant en quelque sorte confondre droit de propriété et souveraineté,-la « gouvernance des marchés » constitue une forme non codifiée de la souveraineté et donc plus émergente dans le cadre d'un autre territoire économique, celui des marchés financiers, matérialisation d'une autorégulation a posteriori,-la gouvernance comprise au sens large constitue la forme de la souveraineté dans le cadre d'un territoire politique « nouveau », celui de la supranationalité, c'est-à-dire celui d'institutions politiques telles que l'Union Européenne, la Banque Mondiale, l'OCDE qui bénéficient d'une délégation de souveraineté non contrôlée démocratiquement par les Etats (matérialisation d'une inter-régulation d'ordre politique),-mais aussi celle de l'infra-nationalité avec des « régions » qui ne correspondent d'ailleurs pas forcément à des régions administratives (le territoire « Seine – Nord », par exemple) lieu d'une autorégulation. La souveraineté inhérente aux « infra-territoires » peut être reliée à la notion de « localisme » pour ce qui est de son inscription géographique et à celle de clusterou d'écosystème d'affaires pour ce qui relève de sa dimension socio-économique, d'où l'importance accordée à la connectivité et au réseau ; la double dimension de l'ethnicité et de l'authenticité d'une part, de l'expertise et de la connectivité d'autre part, sont sans doute ce qui marque le plus la construction sociale et politique de l'« infra-territoire ». A une souveraineté partielle et partiale des grandes entreprises correspond une souveraineté des marchés qui s'ajoutent à une souveraineté des territoires politiques supra ou infra nationaux, puisqu'ils bénéficient également d'une délégation de souveraineté tout aussi peu contrôlée démocratiquement. Ces quatre « nouveaux » niveaux de souveraineté se situent en tension les uns par rapport aux autres, mais aussi en tension avec la souveraineté résiduelle de l'Etat-nation.
    Keywords: mondialisation, organisation, modèle organisationnel
    Date: 2017–04–10
  12. By: Schilirò, Daniele
    Abstract: The present essay focuses on the fast and frugal heuristics program set forth by Gerd Gigerenzer and his fellows. In particular it examines the contribution of Gigerenzer and Goldstein (1996) ‘Reasoning the Fast and Frugal Way: Models of Bounded Rationality’. This essay, following the theoretical propositions and the empirical evidence of Gigerenzer and Goldstein, points out that simple cognitive mechanisms such as fast and frugal heuristics can be capable of successful performance in real world, without the need of satisfying the classical norms of rational inference.
    Keywords: behavioral economics; heuristics; biases; fast and frugal heuristics
    JEL: D0 D10 D80
    Date: 2015–11
  13. By: Nicolas Gravel (Aix-Marseille Univ. (Aix-Marseille School of Economics), CNRS, EHESS and Centrale Marseille); Brice Magdalou (Lameta, Université de Montpellier); Patrick Moyes (GREThA, CNRS, Université de Bordeaux)
    Abstract: What would be the analogue of the Lorenz quasi-ordering when the variable of interest is of a purely ordinal nature? We argue that it is possible to derive such a criterion by substituting for the Pigou-Dalton transfer used in the standard inequality literature what we refer to as a Hammond progressive transfer. According to this criterion, one distribution of utilities is considered to be less unequal than another if it is judged better by both the lexicographic extensions of the maximin and the minimax, henceforth referred to as the leximin and the antileximax, respectively. If one imposes in addition that an increase in someone’s utility makes the society better off, then one is left with the leximin, while the requirement that society welfare increases as the result of a decrease of one person’s utility gives the antileximax criterion. Incidently, the paper provides an alternative and simple characterisation of the leximin principle widely used in the social choice and welfare literature.
    Keywords: ordinal inequality, Hammond equity axiom, leximin, antileximax
    JEL: D30 D63 I32
    Date: 2017–01

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