nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2018‒05‒28
fifteen papers chosen by
Erik Thomson
University of Manitoba

  1. A Critique on the Social Justice Perspectives in the Works of Friedrich A. Hayek By Anusha Mahendran
  2. Keynes: ley de Say y demanda de dinero. By Barón Ortegón, Brayan Alexander
  3. Social Norms, Endogenous Sorting and the Culture of Cooperation By Fehr, Ernst; Williams, Tony
  4. The virtues of dialogue between academics and businessmen By Lise Arena; Leonard Minkes
  5. Populism and the Economics of Globalization By Rodrik, Dani
  6. The Social Trajectory of a Finance Professor and the Common Sense of Capital By Marion Fourcade; Rakesh Khurana
  7. Is fairness intuitive? An experiment accounting for subjective utility differences under time pressure By Merkel, Anna; Lohse, Johannes
  8. The other side of the coin: the negative aspect of freedom of religion By Orsolya Csatári; Boldizsár Szentgáli-Tóth
  9. Evaluating Trust and Trustworthiness in Social Groups and Networks By O'Higgins, Niall; Mazzoni, Clelia; Sbriglia, Patrizia
  10. Philosophical and historical causes of social transformation in the attitude of Ibn khaldun By Mohammad Akvan; Mahmood Seyyed
  12. Les jeunes face aux injustices et aux discriminations By Olivier Galland
  13. Débat sur les perspectives économiques By Christophe Blot; Eric Heyer; Paul Hubert; Xavier Ragot; Xavier Timbeau
  14. What is the Normative Basis for Selecting the Measure of 'Average' Preferences for Use in Social Choices? By Devlin, N.; Shah, K.K; Buckingham, K.
  15. Elusive Beliefs: Why Uncertainty Leads to Stochastic Choice and Errors By Irenaeus Wolff; Dominik Bauer

  1. By: Anusha Mahendran (Curtin University)
    Abstract: Given that the academic work of Friedrich Hayek has received eminent accolades (including the 1974 Nobel Memorial Prize in Economics Sciences) and has been well recognised and widely referenced, this paper reviews the denial of the concept of social justice in many of the academic economic theory papers written by the renowned British-Austrian economist. The paper therefore effectively provides a critical analysis of some of Hayek’s socio-political and economic theories relating to this issue. It attempts to do this by adopting the perspective of an objective and analytical economist with reference to and by examining the content of three of Hayek’s well known economic texts, namely The Road to Serfdom (1944); Law, Legislation and Liberty (1973-79) and the Fatal Conceit Conceit: The Errors of Socialism (1988).
    Keywords: social justice, economics, Friedrich Hayek
    Date: 2018–04
  2. By: Barón Ortegón, Brayan Alexander
    Abstract: In this bibliographic review, the Keynes‘main arguments against the Say’s law are gathered, this law was thought to be a special case of a broader and general theory and therefore more powerful as economic policy is concerned. These insights are vital, to understand Keynesian economics and its subsequent contributions in economic theory and economic policy.
    Keywords: Keynes,Say's Law, Economic theory, demand for money, uncertainty,
    JEL: B0 B2 B22 B31 E12
    Date: 2017–05–14
  3. By: Fehr, Ernst (University of Zurich); Williams, Tony (University of Zurich)
    Abstract: Throughout human history, informal sanctions played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of evidence suggests that informal peer sanctions often cause large efficiency costs. This raises the question whether alternative (peer) sanctioning systems exist that avoid these costs and will be preferred by the people. Here, we show that welfare-enhancing peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior. The exogenous removal of the norm consensus opportunity reduces the efficiency of peer punishment and renders centralized sanctioning by an elected judge the dominant institution. However, if given the choice, subjects universally reject peer sanctioning without a norm consensus opportunity – an institution that has hitherto dominated research in this field – in favor of peer sanctioning with a norm consensus opportunity or an equally efficient institution with centralized punishment by an elected judge. Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects' cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision.
    Keywords: cooperation, punishment, endogenous institutions, public goods
    JEL: D02 D03 D72 H41
    Date: 2018–04
  4. By: Lise Arena (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Leonard Minkes (University of Birmingham [Birmingham])
    Abstract: This article aims to understand the process of production of knowledge in the field of business organisation and in problems of administration. It argues that the acquisition of this type of knowledge is greatly assisted by the developments of dialogue between academics and industrialists. It looks at a method which has been applied in England during the period late 1940s to early 1970s in three academic seminars: the Seminar in Problems of Administration at the LSE (1947–1972); the Industrial Seminar at Birmingham University (late 1950s‒1972); and the BPhil Seminar in Economics of Industry at the University of Oxford (1957–1974). By the mid-1970s, these three seminars had ceased to exist and left room for the rapid development of management studies, on the one hand, and the formalisation of industrial economics (game theory), on the other.
    Keywords: University of Birmingham,empirical realism,seminar method,Management education,business organisation,LSE,University of Oxford
    Date: 2017
  5. By: Rodrik, Dani (Harvard University)
    Abstract: Populism may seem like it has come out of nowhere, but it has been on the rise for a while. I argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash. While the backlash may have been predictable, the specific form it took was less so. I distinguish between left-wing and right-wing variants of populism, which differ with respect to the societal cleavages that populist politicians highlight. The first has been predominant in Latin America, and the second in Europe. I argue that these different reactions are related to the relative salience of different types of globalization shocks.
    Date: 2017–06
  6. By: Marion Fourcade (University of California [Berkeley]); Rakesh Khurana (Harvard Business School)
    Abstract: This paper traces the career of Michael Jensen, a Chicago finance PhD turned Harvard Business School professor to reveal the intellectual and social conditions that enabled the emergence and institutionalization of what we call the “neoliberal common sense of capital,” what others have called the “shareholder value” view of the American firm. Jensen's work was embraced by a generation of corporate raiders aggressively advancing new financial practices and discourses. His contribution, commonly understood as “agency theory,” was intertwined with the transformations in corporate management and governance of the last decades of the twentieth century—from the junk bond market in the 1980s to the exponential growth of CEO pay in the 1990s to the shareholder value management strategies of the 2000s. While debates about the spread of neoliberal ideas and governance tools have largely centered on the transformations of the state and international institutions or the role of actively organized intellectual networks, this essay emphasizes the importance of identifying specific carriers of particular transformations within the space of American “business discourse.”
    Keywords: Agency theory; Corporate governance; Executive pay; The firm; Michael Jensen; Neoliberalism; Shareholder value
    Date: 2017–06
  7. By: Merkel, Anna; Lohse, Johannes
    Abstract: Evidence from response time studies and time pressure experiments has led several authors to conclude that "fairness is intuitive". In light of conflicting findings we provide theoretical arguments showing under which conditions an increase in "fairness” due to time pressure indeed provides unambiguous evidence in favor of the "fairness is intuitive" hypothesis. Drawing on recent applications of the Drift Diffusion Model (Krajbich et al., 2015a), we demonstrate how the subjective diffculty of making a choice affects decisions under time pressure and time delay, there by making an unambiguous interpretation of time pressure effects contingent on the choice situation. To explore our theoretical considerations and to retest the "fairness is intuitive" hypothesis, we analyze choices in two-person binary dictator and prisoner’s dilemma games under time pressure or time delay. In addition, we manipulate the subjective difficulty of choosing the fair relative to the selfish option. Our main finding is that time pressure does not consistently promote fairness in situations where this would be predicted after accounting for choice difficulty. Hence, our results cast doubt on the hypothesis that "fairness is intuitive".
    Keywords: distributional preferences; cooperation; time pressure; response times; cognitive processes; drift diffusion models
    Date: 2018–05–16
  8. By: Orsolya Csatári (Eötvös Loránd University); Boldizsár Szentgáli-Tóth (Eötvös Loránd University)
    Abstract: It is beyond doubts, that the framework of freedom of religion, as a positive right, entitles people to conduct a wide range of activities. However, what is the proper assessment, when one refrains from a legal duty due to religious reasons, or one refuses to participate in compulsory commitments on religious grounds?It should be highlighted, that freedom of religion influences almost all areas of life worldwide, the issues which are raised, are quite similar in the different countries. As for demonstration, it is broadly accepted, that the free exercise of religion shall not violate disproportionately the fundamental rights of others. The definition of religion and church shall be precised. It is also questionable, whether there is a right to convert someone to one?s religion. Our contribution is dedicated to these issues.
    Keywords: freedom of religion, negative aspect, comparatice research, protection of fundamental rights, religious exemptions, human rights, definition of religion
    JEL: K00 K10 K39
    Date: 2018–04
  9. By: O'Higgins, Niall (ILO International Labour Organization); Mazzoni, Clelia (University of Campania-Luigi Vanvitelli); Sbriglia, Patrizia (University of Campania-Luigi Vanvitelli)
    Abstract: Trust and trustworthiness are important components of social capital and much attention has been devoted to their correct evaluation. In this paper, we argue that individuals' trust and trustworthiness are strongly dependent on the level of trust and trustworthiness of the social group in which subjects operate. Attitudinal indicators which are often used to measure trust and trustworthiness in economic and sociological studies are proxies of the individual's propensity to trust, but are insufficient measures of the effective level of trust since the latter may be strongly affected by the behaviour of the components of the individuals' social groups. In order to test our hypothesis, we use a rich dataset based on two experiments on the Trust Game (Berg et al.; 1995), where subjects also filled a questionnaire containing the main attitudinal questions the EVS (the European Value Survey) uses to measure individuals' trust. We then compare the ex-ante behavioural and attitudinal measures of trust with the ex post relative measures. Our main finding is that trust strongly varies once the individual is informed on the on the level of trustworthiness of the social group to which he\she has been allocated during the experiment. This difference is higher the higher is the family level of income and the parental education status of the subjects. We also find that relative behavioural measures are not correlated to attitudinal measures (Glaeser et al., 2000, Lazzarini, 2005), but they are strongly correlated to groups' trustworthiness. We also find that similar social preferences profiles (between Senders and Recipients) tend to enhance the degree of behavioural trust.
    Keywords: social capital, trust, experiments
    JEL: C91 C92
    Date: 2018–04
  10. By: Mohammad Akvan (Islamic Azad University); Mahmood Seyyed (Department of History, Central Tehran Branch, Islamic Azad University)
    Abstract: Every society, whether simple and elementary or complex and advanced, has changed in the historical context. This change has always been due to some reasons which have absorbed historians', philosophers' and researchers' attention. In fact, change and transformation have been considered as integral parts, inherent nature and internal features of human societies. What matter is that every change and transformation happens because of some reasons that have historical, cultural, political and social roots, all of which realize in the context of history and force the human society to experience change and transformation.Ibn Khaldun as a social researcher and history philosopher has constantly paid attention to the inherent dynamics and internal upheaval of the human society and discussed its movement course, quality of change procedure in the context of history. He concerned both short-term and long-term changes. He has spent time seeking such social changes. Ibn Khaldun' attitude to social changes can be considered as a kind of evolutionism, because he in his historical explanation and analysis of human communities and relevant processes, looked at both evolution and its causes and also various stages of social transformation and its features. In fact, from Ibn Khaldun's point of view, movement from a certain kind of community to another takes place in a longitudinal link and communities are located in cyclic and evolutionary process, that is, every community comes into existence and takes steps to perfection, it begins its downward trend then, finally changes into another one. What matters in the attitude of Ibn Khaldun, is that he never believes this cyclic and evolutionary movement of communities and their repeatability to be algebraic and uniform. In his opinion this movement is a kind of evolution and creation accompanied by growth and perfection. Thus societies emerge, are formed, grow and develop, eventually are transformed, but their existence signs, that is, culture and civilization never disappear completely and just are transferred from one community to another. So another community with previous cultural background and civilization is formed in another horizon. Therefore, in Ibn Khaldun's view, change and transformation is not a closed cycle but it has an open horizon toward perfection and progress. In this article, efforts have been made to study the historical, philosophical causes of social changes and transformation from Ibn Khaldun's perspective.
    Keywords: Ibn Khaldun, social transformation, social evolution, perfectionism, cyclic movement , evolutionary movement .
    Date: 2018–04
  11. By: Eduardo Fernando Terán Yépez (University of Almeria)
    Abstract: After a long period of "semi-forgetfulness", the academic interest in the entrepreneurship field and in the study of the entrepreneur as an individual has resurfaced in the last two and a half decades. This resurgence is related with the reactivation of small businesses and the emergence of an "entrepreneurial culture". Since Richard Cantillon introduced the term for the first time in 1755, several entrepreneurship theories have been put forward by scholars to explain the entrepreneurial phenomenon. This variety of theories causes that this field have a weak conceptual framework. This research, therefore, has a double purpose. On the one hand it aims to review and summarize the multidisciplinary nature of the different entrepreneurship theories. On the other hand, this paper gives a critical review showing the strengths and weaknesses of these theories. In order to achieve these objectives and understanding that the research of these theories continues to be important for the development of this field, this paper classifies 26 entrepreneurship theories into four Mainstreams (Economic, Psychological, Sociological and Management Entrepreneurship Theories). Then, this work summarizes the main proposals of each entrepreneurship theory. Finally, this research presents some critics and limitations to the entrepreneurship theories in order to present some future research directions.From the above discussions, this research concludes that it is clear that the field of entrepreneurship have some interesting and relevant theories. But taking advantage of the renewal fascination with the study of the entrepreneurship field and the multiplicity of interpretations and alternative approaches that have been developed, it is time to refocus our efforts at integrating the diverse viewpoints and to analyze if there are any common denominators within the diversity of entrepreneurship literature. The value of this investigation can be appreciated from two points of view: (1) it facilitate researchers the integration of diverse perspectives that allow finding any common denominator within the entrepreneurial literature diversity and (2) helps to identify specific gaps within the entrepreneurship field that have not yet been studied and that must be answered. So, this investigation pretends to contribute to the study, research and practice of the entrepreneurship field.
    Keywords: Entrepreneurship theories, state of the art, critical review
    JEL: L26 M13
    Date: 2018–04
  12. By: Olivier Galland (Groupe d'Etude des Méthodes de l'Analyse Sociologique de la Sorbonne)
    Abstract: Les jeunes ressentent plus que les adultes les injustices et les discriminations vécues personnellement. En revanche ils sont moins sensibles à l’injustice sociale dans l'ensemble de la société. Cet article explore quelques explications possibles de ce paradoxe : particularités des injustices ressenties et probablement subies par les jeunes, effets de composition sociale du groupe des jeunes par rapport aux adultes contribuant à atténuer la sensibilité à l’injustice sociale, nature des liens, chez les jeunes, entre le positionnement politique et la perception de l’injustice dans la société.
    Keywords: Discrimination; Injustice; Inégalites; Jeunes
    Date: 2017–05
  13. By: Christophe Blot (Observatoire français des conjonctures économiques); Eric Heyer (Observatoire français des conjonctures économiques); Paul Hubert (Observatoire français des conjonctures économiques); Xavier Ragot (Observatoire français des conjonctures économiques); Xavier Timbeau (Observatoire français des conjonctures économiques)
    Date: 2017–06
  14. By: Devlin, N.; Shah, K.K; Buckingham, K.
    Abstract: The aim of this paper is to consider what normative arguments might exist for advocating the use of any given measure of the average in the context of health state values. We begin by providing examples of the importance and implications of the choice of the measure of central tendency in stated preference studies (including both EQ-5D values and corresponding issues in the willingness to pay literature). Then, drawing on the theory of social choice, voting models and welfare economics, we consider the criteria that are available for judging the 'goodness' of alternative approaches to aggregation, and evaluate their relevance to the selection of the measure of average EQ-5D values.
    Keywords: Health Statistics and Data Analyses
    JEL: I1
    Date: 2017–02–01
  15. By: Irenaeus Wolff; Dominik Bauer
    Abstract: People often cannot assign a clear probability to an event but face uncertainty about their subjective probabilities. We model belief uncertainty by assuming that agents’ beliefs are characterized by a distribution over subjective-probability distributions that agents cannot access directly. Our model produces stochastic choice because each decision-relevant belief is but one realization out of the distribution over all possible beliefs. Our model predicts that when comparing unknown situations to routine choices, people will make more ex-ante suboptimal choices in unknown situations. The model also offers an explanation for experiment participants not playing a best-response to their stated beliefs: participants are uncertain what belief to report or base their decision on, and hence, act on momentaneous ‘belief realizations’. In an experiment, we exogenously manipulate participants’ belief uncertainty. We find support for both predictions. Low belief uncertainty leads to fewer errors and thus, higher earnings, even when controlling for the accuracy of participants’ beliefs. Second, under low belief uncertainty, observed best response rates are high and increasing in the amount of information we provide. Conversely, high belief uncertainty leads to lower consistency.
    Keywords: Stochastic choice, Belief-Action Consistency, Belief Elicitation, Discoordination Game
    Date: 2018

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