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on History and Philosophy of Economics |
| By: | Thibaut Mastrolia |
| Abstract: | In this paper, we study moral hazard problems in contract theory by adding an exogenous Planner to manage the actions of Agents hired by a Principal. We provide conditions ensuring that Pareto optima exist for the Agents using the scalarization method associated with the multi-objective optimization problem and we solve the problem of the Principal by finding optimal remunerations given to the Agents. We illustrate our study with a linear-quadratic model by comparing the results obtained when we add a Planner in the Principal/multi-Agents problem with the results obtained in the classical second-best case. More particularly in this example, we give necessary and sufficient conditions ensuring that Pareto optima are Nash equilibria and we prove that the Principal takes the benefit of the action of the Planner in some cases |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1706.01254&r=hpe |
| By: | François Gardes (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | The Nobel prize which has been awarded to Angus Deaton in 1995 proved his exceptional contribution to applied microeconomics, microeconometric methods and development studies. The four books he published offer a large view on these domains and prove the importance taken vy new statistical methods and data in applied micro- and macroeconomics |
| Keywords: | consumption; microeconomics; microeconometrics; permanent income; saving; inequality; development; pseudo panel; time-series of cross-sections |
| JEL: | A13 C01 C21 C55 C81 D11 D14 D31 E31 H31 I15 I31 I32 N30 O12 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:17025&r=hpe |
| By: | Alessandro Sontuoso (Philosophy, Politics and Economics, University of Pennsylvania); Sudeep Bhatia |
| Abstract: | Identifying the best course of action in games with multiple equilibria is a long-standing unresolved issue in strategic interaction. The concept of prominence as a criterion for equilibrium selection has been suggested, but has remained for the most part an informal notion, without a psychologically grounded characterization. In this paper we propose one such characterization: by drawing on existing theories of human memory, language, and decision making we define prominence in terms of frequency of exposure. In particular, we consider games where strategies are denoted by natural language labels, and we measure the prominence of each strategy by how often its label occurs in natural language corpora. Our specification of prominence yields sharp quantitative predictions about behavior in coordination and discoordination problems. Here we present three studies designed to test such predictions, and show that individuals do select strategies that fulfil our definition of prominence and they furthermore do so in a (boundedly) rational manner. |
| Keywords: | focal points, salience, accessibility, coordination, hide-and-seek, level-k |
| JEL: | C72 C91 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:ppc:wpaper:0009&r=hpe |
| By: | Marco Lonzi; Samuele Riccarelli; Ernesto Screpanti |
| Abstract: | In his theoretical model of production prices Marx follows the classical economists in treating wages as being paid in advance. Sraffa, instead, tends to treat them as being paid post factum. However, when Marx tackles the problem under less abstract scrutiny, he abandons the classical approach and declares that, as a matter of fact, wages are postponed. We prove that, if the period of postponed wage payment differs from the length of the production process, the correct prices are better approximated by an equation with the full post-payment of wages than by one with full pre-payment. Under perfect competition and postponed wage payments, Sraffa’s approach to price determination is the correct one, and validates Marx’s non-classical vision, whatever the period of wage payment. |
| Keywords: | Value theory, Marx, Sraffa |
| JEL: | B31 B51 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:756&r=hpe |
| By: | Nelu Burcea (Athenaeum University of Bucharest) |
| Abstract: | Human dignity is a concept which can hardly be confined to a unique field of inquiry, or be analyzed from a restricted scientific approach. In this paper I would like to approach the idea of human dignity through the lenses of economics and religion. The word dignity has wide and multiple applications, ranging in meaning from the concepts of freedom, reaching economic level by applying the idea of a welfare concept or feeling decent. Although, the term of dignity is not likely to be reduced to the economic arena, this paper draws attention, although not exclusively, to the terms of poverty and wealth. Poverty is generally regarded as important to human dignity, but what can be said about wealth? Considering the meaning of poverty and wealth in relation to human dignity, this research uses a general theological approach from the perspective of the Bible |
| Keywords: | human dignity, economics, ethics, future, morality, human rights |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:smo:gpaper:203&r=hpe |
| By: | John E. Roemer (Dept. of Political Science & Cowles Foundation, Yale University) |
| Abstract: | Marxists have viewed the task of socialism as the elimination of exploitation, defined in the Marxian manner in terms the excess of labor expended over of labor commanded. I argue that the concept of Marxian exploitation commits both type-one (false positives) and type-two (false negatives) errors as a diagnosis of distributive injustice: it misses instances of distributive injustice because they do not involve exploitation, and it calls some economic relations characterized by exploitation unjust when they are not. The most important reformulators of Marx’s concept of socialism, which implicitly or explicitly attempt to correct the Marxian errors, are Oscar Lange, James Meade, John Rawls, Robert Nozick, Ronald Dworkin and G.A. Cohen. I trace this development, and argue for a re-definition of socialist principles based upon it. |
| Keywords: | Exploitation, Socialist equality of opportunity, Market socialism |
| JEL: | P2 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2089&r=hpe |
| By: | Venkatesh, Raghul S (Department of Economics, University of Warwick) |
| Abstract: | In the classic Crawford-Sobel (CS) model of strategic communication between an informed Sender and uninformed Receiver, perfect information transmission is never achieved as an equilibrium outcome. I present a modified version of the CS cheap talk game with the following two innovations : (i) both players take actions, and (ii) actions are strategic substitutes. In contrast to the CS setup, the modified game can facilitate perfect information revelation. I characterize the conditions under which a full information revelation equilibrium exists. When these conditions are violated, only partial revelation equilibria exist. Under partial revelation, the Sender reveals information up to a threshold state and pools beyond this threshold, resulting in some loss of information. Welfare analysis suggests that partial revelation equilibria with a higher threshold pareto dominate those with lower thresholds. Crucially, a higher threshold equilibrium is also interim efficient – every Sender type at least weakly prefers this over a lower threshold equilibrium. |
| Keywords: | Cheap talk ; interdependent action games ; full information revelation |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wcreta:31&r=hpe |
| By: | Florian Brugger (Department of Sociology, University of Graz); Christian Gehrke (Department of Economics, University of Graz) |
| Abstract: | The paper provides a summary account of the views of the classical political economists on the effects of technical change on the demand for labour, and in particular for skilled versus unskilled labour. The views of the classical economic theorists, from Smith to Ricardo, Babbage, Ure and Marx, are then contrasted with the historical record of the bias of technical change with regard to de-qualifying and skill-enhancing tendencies in the 18th and 19th century that emerges from studies of economic historians. The paper shows that some of the classical economists made a serious effort to account for heterogeneous labour in a changing technical environment. While Smith and Marx envisaged the de-qualification of the workforce as the main characteristic of technological development and as a purposely intended consequence of the introduction of new technologies, other authors like Babbage also took into account capital - skilled labour complementarities and skill-enhancing effects of technological change. While for Smith the deskilling bias is a by-product of progress, Marx and Ure regarded directed technological change as a bourgeois weapon in the class struggle for the reduction of the bargaining power of the proletariat. Economic historians found strong confirmation for Marx’s hypotheses that technical change was used as a weapon against the proletariat. But most empirical studies found no evidence for a deskilling tendency of industrialization as a whole. According to those studies industrialization was accompanied by a polarization of labour. On the one hand, industrialization deskilled part of the labour force and on the other hand it sharply raised the demand for highly skilled workers. |
| Date: | 2017–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpsses:2017-02&r=hpe |
| By: | Christian Schitter (Department of Banking and Finance, University of Graz); Jürgen Fleiß (Department of Corporate Leadership and Entrepreneurship, University of Graz); Stefan Palan (Department of Banking and Finance, University of Graz) |
| Abstract: | This paper investigates the determinants of (dis)honesty of reporters filing unverified claims for money. First, does honest reporting increase when each reporter's unverified claim is made public? We present experimental evidence to this effect. The driver behind this is activation of the preference for appearing honest. Second, does honest reporting increase when it is public knowledge that reporters' claims affect others and reporters are reciprocally affected by others' claims? We find no such effect. Fear of losing out against others who untruthfully claim too much may outweigh honesty and pro-social considerations. |
| Date: | 2017–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpsses:2017-01&r=hpe |
| By: | Bernardo Batiz-Lazo (Bangor University); Leonidas Efthymiou (UNICAF - Intercollege Larnaca) |
| Abstract: | In this paper we look backwards and sideways to ascertain elements that are likely to determine the future of cash as well as cashless payment systems. Our analysis begins in medieval Europe while examining how legal tender and fiat money was imposed on people during the primitive accumulation era (Marx, [1887] 2015). Primitive accumulation marks the transition to a market economy. Paper money played a central role in the transformation of socio-economic relations as part of the imposition of wage labour upon self-producing, self-sufficient and self-provisioning populations. But primitive accumulation has been conceived as more than just a period of transition that led to the development of capitalistic socio-economic relations, to encompass a set of forces that permanently reproduce accumulation and capital’s existence (Bonefeld, 2001; Dalla Costa & Dalla Costa, 1995; De Angelis, 2001; Perelman, 2001). Following this broader conception of primitive accumulation, we trace practices in Fordism and post-Fordism to explain how the emergence of a cashless/checkless economy results not only technological change and a drive for cost efficiency within financial institutions, but also results from economic restructuring, labour de-skilling and general changes in the social and cultural landscape. We content that market forces as well as government policy have contributed to the diffusion and adoption of cashless means of payment, within an intensifying automation and mobilisation of daily life where digital money is likely to outpace cash. Furthermore, the transparency (or lack of) with which these decisions have taken place, indicates the extent to which the government and business elites value the right to information and freedom of choice. The move to a cashless/checkless economy thus epitomises how money is also subject to the freedom versus security debate that is fast becoming one of the quintessential quandaries of the 21st century. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:bng:wpaper:16003&r=hpe |