nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2018‒03‒12
sixteen papers chosen by
Erik Thomson
University of Manitoba

  1. The effects of physical activity on social interactions: The case of trust and trustworthiness By Di Bartolomeo Giovanni; Stefano Papa
  2. Marx Was Mistaken on Capitalism's Principal Institutions of Markets and Private Property By Jon D. Wisman
  3. Welfare State and Taxation. The Critical Point of Freedom Between Gift and Corruption. By Silvestri, Paolo
  4. Individual choice and social welfare: Theoretical foundations of political economy By Vanberg, Viktor J.
  5. Opinion formation and targeting when persuaders have extreme and centrist opinions By Agnieszka Rusinowka; Akylai Taalaibekova
  6. Inequality, good governance and endemic corruption By Gil S. Epstein; Ira N. Gang
  7. Human Ethics and Virtues: Rethinking the Homo-Economicus Model By Sanjit Dhami
  8. An urgent call to get better prepared for unexpected events By Jurgen Spaanderman
  9. Motivational crowding out effects in charitable giving: Experimental evidence By Müller, Stephan; Rau, Holger A.
  10. The common heritage of mankind as a means to assess and advance equity in deep sea mining By Bourrel, Marie; Thiele, Torsten; Currie, Duncan
  11. Management Information, Decision Sciences, and Financial Economics : a connection By Chang, C-L.; McAleer, M.J.; Wong, W.-K.
  12. Principle or Opportunism? Discretion, Capital, and Incentives By Falkinger, Josef; Habib, Michel Antoine
  13. The Ladies Vanish? American Sociology and the Genealogy of its Missing Women on Wikipedia By Wei Luo; Julia Adams; Hannah Brueckner
  14. A Bibliometric Analysis of the Knowledge Exchange Patterns between Major Technology and Innovation Management Journals (1999-2013) By Shikhar Sarin; Christophe Haon; Mustapha Belkhouja
  15. Are Biased Media Bad for Democracy? By Wolton, Stephane
  16. A Network Approach to Public Goods By Elliott, M.; Golub, B.

  1. By: Di Bartolomeo Giovanni; Stefano Papa
    Abstract: There is no doubt that physical activity improves health conditions; however, does it also affect the way people interact? Beyond the obvious effects related to team games or sharing common activities such as attending a gym, we wonder whether physical activity has in itself some effect on social behavior. Our research focuses on the potential effects of physical activity on trust and trustworthiness. Specifically, we compare the choices of subjects playing an investment game who were previously exposed to short-time physical activity to others who are not exposed to it, but involved in different simple tasks. On average, we find that subjects exposed to physical activity exhibit more trust and pro-social behaviors than those who are not exposed. These effects are not temporary.
    Date: 2017–11
  2. By: Jon D. Wisman
    Abstract: Ever since capitalism came to be recognized as a new economic system, its principal institutions of private property and markets have had vociferous critics, of whom none was more wide-ranging than Karl Marx. Marx claimed that not only were private property and markets critical to creating an ideological patina of freedom, behind which, as in slavery and feudalism, a small class extracted from the mass of producers practically all output above that necessary for bare subsistence, but they also served to enable this exploitation. Further, Marx and other critics faulted private property and markets for being corrupting. Yet Marx recognized that capitalism, unlike earlier exploitative systems, was radically dynamic, producing unprecedented wealth, while transforming not only all it inherited from the past, but also its own nature so as to eventually empower even the producers, who he believed would abandon these capitalist institutions. He did not imagine that the dynamism, wealth, and potential freedom that capitalism was delivering might have little chance of flourishing in the absence of its institutions of private property and markets. This article claims that Marx and other critics were wrong to blame capitalism's principal institutions of private property and markets for the injustices that accompanied them. Instead it is the specific form of inequality that co-evolved with them that enables an elite to extract surplus from the producers. It is the inequality that must be targeted. A dynamic and just social order needs private property and markets.
    Keywords: Exploitation, Markets, private property, Marx
    JEL: B51 P11 P16
    Date: 2017
  3. By: Silvestri, Paolo (University of Turin)
    Abstract: Can taxation and the redistribution of wealth through the welfare state be conceived as a modern system of circulation of the gift? But once such a gift is institutionalized, regulated and sanctioned through legal mechanisms, does it not risk being perverted or corrupted, and/or not leaving room for genuinely altruistic motives? In this paper I will develop two interrelated arguments. 1) The way these problems are posed as well as the standard answers to them are: a) subject to fallacies: the dichotomy fallacy and the fallacy of composition; b) too reductive and simplistic: we should at least try to clarify what kind of ‘gift’ or ‘corruption’ we are thinking about, and who or what the ‘giver’, the ‘corrupter’, the ‘receiver’ and/or the ‘corrupted’ party are. 2) The answers to these problems cannot be found by merely following a theoretical approach, nor can they be merely based on empirical evidence; instead, they need to take into account the forever troublesome, ambiguous and unpredictable matter of human freedom. To explain the standard answers to the abovementioned questions as well as their implications I will first re-examine two opposing positions assumed here as paradigmatic examples of other similar positions: on the one hand, Titmuss’ work and the never-ending debate about it; on the other, Godbout’s position, in-so-far as it shows how Titmuss’ arguments can easily be turned upside down. I will then introduce and reinterpret Einaudi’s “critical point” theory as a more complex and richer anthropological explanation of the problems and answers considered herein.
    Date: 2018–02
  4. By: Vanberg, Viktor J.
    Abstract: [Political Economy as Applied Economics] What we call an economy, i.e. the nexus of economic activities and relations within some defined regional limits - e.g. a local, a national or the world economy -, has always been subject to measures taken, or constraints imposed by political authorities. How economies work is inevitably, and to a significant extent, contingent on the political environment within which they operate. It is not surprising that economists studying the working principles of economic systems have rarely been content with confining their work to describing and explaining the economic realities they observe. Their ambitions always extended to passing judgments on the policies that shaped these realities and to providing guidance for what politics ought to do to improve economic matters. In economics explanations of what is and judgments on what politics should do are often not only more closely intertwined than in most other fields of scientific inquiry, and more than from practitioners in other fields the general public expects economists to pass such policy judgments. [...]
    Date: 2018
  5. By: Agnieszka Rusinowka (Centre d'Economie de la Sorbonne - Paris School of Economics); Akylai Taalaibekova (CORE - Université Catholique de Louvain and Centre d'Economie de la Sorbonne)
    Abstract: We consider a model of competitive opinion formation in which three persuaders characterized by (possibly unequal) persuasion impacts try to influence opinions in a society of individuals embedded in a social network. Two of the persuaders have the extreme and opposite opinions, and the third one has the centrist opinion. Each persuader chooses one individual to target, i.e., he forms a link with the chosen individual in order to spread his own “point of view” in the society and to get the average long run opinion as close as possible to his own opinion. We examine the opinion convergence and consensus reaching in the society. We study the existence and characterization of pure strategy Nash equilibria in the game played by the persuaders with equal impacts. This characterization depends on influenceability and centrality (intermediacy) of the targets. We discuss the effect of the centrist persuader on the consensus and symmetric equilibria, compared to the framework with only two persuaders having the extreme opinions. When the persuasion impacts are unequal with one persuader having a sufficiently large impact, the game has only equilibria in mixed strategies
    Keywords: social network; opinion formation; consensus; targeting; lobbying; extreme and centrist persuaders
    JEL: D85 D72 C72
    Date: 2018–02
  6. By: Gil S. Epstein; Ira N. Gang
    Abstract: Can a society suffering contests between rich and poor achieve good governance in the face of endemic corruption? We examine a stylized poor state with weak institutions in which a ‘culture of evasion’ damages state authority. Many evade tax payments, limiting the state’s economic development capability. In the face of extensive corruption, it is challenging for the state to establish and implement policies reflecting good governance; for example, a government that is accountable and transparent, efficient and effective, and follows the rule of law. The rich and poor possess different views on what is the appropriate level of enforcing proper payments of taxes due. The government needs to design an effective tax administration policy that minimizes corruption and is sensitive to the present and future needs of society. To do this it must understand what drives such widespread corruption.
    Date: 2018
  7. By: Sanjit Dhami
    Abstract: The neoclassical model in economics envisages humans as amoral and self-regarding (Econs). This model, also known as the homo-economicus model, is not consistent with the empirical evidence. In light of the evidence, the continued use of the homo-economicus model is baffling. It also stymies progress in the field by putting the burden of adjustment on auxiliary assumptions that need to compensate for an unrealistic picture of human motivation and behavior. This essay briefly outlines the evidence for a more inclusive picture of humans in which ethics and morality play a central role. It argues for replacing the homo-economicus model with a homo-behavioralis model that has already enabled great progress to be made in the field of behavioral economics.
    Keywords: ethics, morality, intrinsic motivation, consequentialistic choices, lying-aversion, guilt-aversion, markets and morality, moral balancing, self-image, self-serving justifications, partial lying, third party punishment, delegation, social identity, moral suasion
    JEL: D90 D64
    Date: 2017
  8. By: Jurgen Spaanderman
    Abstract: This paper is an urgent call to get better prepared for unexpected events. The increasing spread of information technology in society leads to more complexity and non-linear behavior in the economic and financial system, and to more unpredictable, sudden events. This paper examines how people deal with non-linear behavior of systems, by looking at how we prepare for disruptive events in the economy and wider society, and it shows why we have a hard time dealing with non-linearities. The paper provides suggestions to improve our handling of non-linear system behavior for both better preparedness for disruptive events and better design of more resilient systems. A different approach to economic modelling is needed, away from equilibria thinking toward the realm of evolutionary complex adaptive systems. The paper is relevant to policymakers and decision makers who deal with long-term risk anduncertainty, and to those who want to improve their understanding of disruptiveevents. The ideas brought together in this paper come from various disciplines and mostly do not reflect mainstream economic thinking.
    Date: 2018–02
  9. By: Müller, Stephan; Rau, Holger A.
    Abstract: This paper tests motivational crowding out in the domain of charitable giving. A novelty is that our experiment isolates alternative explanations for the decline of giving such as strategic considerations of decision makers. Moreover, preference elicitation allows us to focus on the reaction of donors characterized by different degrees of intrinsic motivation. In the charitable-giving setting subjects donate money to the German "Red Cross" in two consecutive stages. The first dictator game is modified, i.e., donors face with equal probability an ex post reimbursement or a subsequent pay. The second game is a standard dictator game where we control for the decline of giving. We find that subjects with a high degree of intrinsic motivation, who received a reimbursement, reduce their donations more than four times as much as equally motivated individuals who did not experience a payment.
    Keywords: Altruism,Dictator Game,Experiment,Motivational Crowd Out
    JEL: D02 D03 C91
    Date: 2018
  10. By: Bourrel, Marie; Thiele, Torsten; Currie, Duncan
    Abstract: A key objective of the United Nations Convention on the Law of the Sea (UNCLOS) as stated in its Preamble, is to contribute to the realisation of a just and equitable international economic order which takes into account the interests and needs of mankind as a whole and, in particular, the special interests and needs of developing countries. As for any other principles of international law, the context within which the principle of the common heritage of mankind (CHM) has been developed is essential to understanding the philosophy behind it, its evolution and more particularly, the challenges faced today for is effective implementation as a means to advance the concept of equity in the context of deep sea mining (DSM mining).
    Keywords: common heritage of mankind principle; equity; deep sea mining; developing States; United Nations Convention on the Law of the Sea; International Seabed Authority
    JEL: R14 J01
    Date: 2016–08–11
  11. By: Chang, C-L.; McAleer, M.J.; Wong, W.-K.
    Abstract: The paper provides a brief review of the connecting literature in management information, decision sciences, and financial economics, and discusses some research that is related to the three cognate disciplines. Academics could develop theoretical models and subsequent econometric models to estimate the parameters in the associated models, and analyze some interesting issues in the three related disciplines.
    Keywords: Management information, decision sciences, financial economics, theoretical models, econometric models
    JEL: A10 G00 G31 O32
    Date: 2018–01–01
  12. By: Falkinger, Josef; Habib, Michel Antoine
    Abstract: When should shareholders afford a manager the discretion to be opportunistic and when should they constrain him to be principled? We show that discretion is associated with lower powered incentives than is constraint: opportunism may put shareholder capital at risk; shareholder can lessen that risk by lowering the power of managerial incentives, thereby decreasing the manager's incentives to spurn principle for opportunity. We further show that the cost of capital plays a central role in favoring discretion over constraint: the use of capital constitutes an externality; when the cost of capital is low, the externality is of relatively little importance, and the manager is afforded the discretion to be opportunistic.
    Date: 2018–02
  13. By: Wei Luo; Julia Adams; Hannah Brueckner (Division of Social Science)
    Date: 2018–01
  14. By: Shikhar Sarin (Boise State University); Christophe Haon (GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM), IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Mustapha Belkhouja (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: This essay takes a longitudinal look at the knowledge flow patterns between major technology and innovation man- agement (TIM) journals and the effect on their impact factors. We analyze the flow of 29,776 citations from 4171 articles published in the top six dedicated TIM journals between 1999 and 2013. Findings indicate one subset of journals becoming more firmly rooted in the TIM domain, while the others becoming increasingly insulated from it. JPIM displays peculiar knowledge flow patterns, suggesting a broadening of its knowledge base and impact. Our bibliometric analysis provides one of the most comprehensive and detailed year-by-year looks at the intradomain knowledge exchange patterns over a 15-year period.
    Date: 2018
  15. By: Wolton, Stephane
    Abstract: This paper assesses the normative and positive claims regarding the consequences of biased media using a political agency framework with a strategic voter, polarized politicians, and news providers. My model predicts that voters are always better informed with unbiased than biased outlets even when the latter have opposite ideological preferences. However, biased media may improve voter welfare. Contrary to several scholars' fear, partisan news providers are not always bad for democracy. My theoretical findings also have important implications for empirical analyses of the electoral consequences of changes in the media environment. Left-wing and right-wing biased outlets have heterogeneous effects on electoral outcomes which need to be properly accounted for. Existing empirical studies are unlikely to measure the consequences of biased media as researchers never observe and can rarely approximate the adequate counterfactual: elections with unbiased news outlets.
    Keywords: biased news, counterfactual, welfare, information
    JEL: D72 D78 D82
    Date: 2017–02–26
  16. By: Elliott, M.; Golub, B.
    Abstract: Suppose agents can exert costly effort that creates nonrival, heterogeneous benefits for each other. At each possible outcome, a weighted, directed network describing marginal externalities is defined. We show that Pareto efficient outcomes are those at which the largest eigenvalue of the network is 1. An important set of efficient solutions - Lindahl outcomes - are characterized by contributions being proportional to agents' eigenvector centralities in the network. The outcomes we focus on are motivated by negotiations. We apply the results to identify who is essential for Pareto improvements, how to efficiently subdivide negotiations, and whom to optimally add to a team.
    Date: 2018–02–07

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