nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2018‒07‒30
24 papers chosen by
Erik Thomson
University of Manitoba

  1. ‘Economics’ of prosperity: Why the dominant perspectives may be unhelpful to make sense of underdevelopment By Gupta, Avinash
  2. "Timing Games with Irrational Types: Leverage-Driven Bubbles and Crash-Contingent Claims" By Hitoshi Matsushima
  3. Inequality, Fairness and Social Capital By Fehr, Dietmar; Rau, Hannes; Trautmann, Stefan; Xu, Yilong
  4. On the Academic Making of Dr. Narmadeshwar Jha By Mishra, SK
  5. Bankers drawing lessons from history: lucidity or blindness? By Hubert Bonin
  6. Hayek's liberal dialectics By Claude Gamel
  7. Un récit historique alternatif sur l’indépendance des banques centrales: la doctrine et les pratiques avant la théorie ou l’art avant la science By Adriano Do Vale
  8. Replication in experimental economics: A historical and quantitative approach focused on public good game experiments By Nicolas Vallois; Dorian Jullien
  9. Incertitude et prise de décision – les fondements de la Théorie Générale By Angel Asensio
  10. Experiments on macroeconomics: methods and applications By Camille Cornand; Frank Heinemann
  11. The contributions of Angus Deaton By Besley, Timothy
  12. The Heaven Dictator Game: Costless taking or giving By Aurora García-Gallego; Nikolaos Georgantzis; María José Ruiz-Martos
  13. The Impact of the Reformation on the Economic Development of Western Europe By Sheremeta, Roman; Smith, Vernon
  14. Anthropology and Economics: The Argument for a Microeconomic Anthropology By Jérôme Ballet
  15. Janos Kornai and General Equilibrium Theory By Mehrdad Vahabi
  16. On "rusting" money: Silvio Gesell's Schwundgeld reconsidered By Rehme, Günther
  17. Statistik und Organisation der NS-Kriegswirtschaft und der DDR-Planwirtschaft 1933-1949/50 By Fremdling, Rainer
  18. The Big Robber Game By Carlos Alós-Ferrer; Jaume García-Segarra; Alexander Ritschel
  19. Cooperative organizations and members’ role: A new perspective By George APOSTOLAKIS; Gert VAN DIJK
  20. 'Discrete beliefs space and equilibrium: a cautionary note' By Michele Berardi
  21. A Nazi 'Killer' Amendment By Benny Moldovanu; Andreas Kleiner
  22. The Dimensions of Consensus By Benny Moldovanu; Alex Gershkov; Xianwen Shi
  23. Valuing Life as an Asset, as a Statistic and at Gunpoint By Julien Hugonnier; Florian Pelgrin; Pascal St-Amour
  24. The Principle of Relatedness By César Hidalgo; Pierre-Alexandre Balland; Ron Boschma; Mercedes Delgado; Maryann Feldma; Koen Frenken; Edward Glaeser; Canfei He; Dieter F. Kogler; Andrea Morrison; Frank Neffke; David Rigby; Scott Stern; Siqi Zheng; Shengjun Zhu

  1. By: Gupta, Avinash
    Abstract: The article is essentially a book-review of Professor Vijay Joshi's recent work, '"India's Long Road: The Search for Prosperity". In this critical essay, I take a slightly revisionist approach when it comes to a 'typical'book review. For example, the length of this article goes well-beyond the standard convention. The ‘deviation’ from rules, however, has specific objectives. I have critically analyzed Dr. Joshi’s work and in so doing include relevant evidences, debates and questions not just from economics but also from other disciplines such as history and political science.
    Keywords: Underdevelopment, critical analysis, political and social dynamics in policy
    JEL: A23 B5 B52 H25 L5 N6 O1 O25 P26
    Date: 2018–07–02
  2. By: Hitoshi Matsushima (Faculty of Economics, The University of Tokyo)
    Abstract: This study investigates a timing game with irrational types; each player selects a time in a fixed time interval, and the player who selects the earliest time wins the game. We assume the possibility of irrational types in that each player is irrational with a positive probability, thus selecting the terminal time. We show that there exists the unique Nash equilibrium; according to it, every player never selects the initial time. As an application, we analyze a strategic aspect of leverage-driven bubbles; even if a company is unproductive, its stock price grows up according to an exogenous reinforcement pattern. During the bubble, this company is willing to raise huge funds by issuing new shares. We regard players as arbitrageurs, who decide whether to ride the bubble or burst it. We demonstrate two models, which are distinguished by whether crash-contingent claim, i.e., contractual agreement such that the purchaser of this claim receives a promised monetary amount from its seller if and only if the bubble crashes, is available. The availability of this claim deters the bubble; without crash-contingent claim, the bubble emerges and persists even if the degree of reinforcement is insufficient. Without crash-contingent claim, high leverage ratio fosters the bubble, while with crash-contingent claim, it rather deters the bubble.
    Date: 2018–06
  3. By: Fehr, Dietmar; Rau, Hannes; Trautmann, Stefan (Tilburg University, Center For Economic Research); Xu, Yilong (Tilburg University, Center For Economic Research)
    Abstract: We study the impact of unjust inequality on social trust and trustworthiness, and its separate effect on the economically successful and the unsuccessful, in a controlled economic experiment. We find evidence for a negative effect of unfair economic inequality on social interactions. Probing the boundaries of this effect, we document that this erosion of social capital critically depends on the context: if a well-off person is not directly responsible for the outcome of the worse-off person, then we observe no negative effects on trust and trustworthiness in the aggregate. Moreover, our data do not support the view that higher status or wealth leads to an erosion of pro-social attitudes: the successful are always more generous; groups of unsuccessful persons are least efficient and least generous in the trust game.
    Keywords: inequality; fairness; social capital
    JEL: C91 D31 D63
    Date: 2018
  4. By: Mishra, SK
    Abstract: Narmadeshwar Jha was an economist in India who specialized on the economics of Alfred Marshall. Jha passed his MA from Patna University and did his Ph.D. in the University of Leeds, UK. He wrote his well-known book titled “The Age of Marshall: Aspects of British Economic Thought, 1890-1915”. This paper makes an attempt to investigate the academic influences on Jha making him what he was.
    Keywords: Narmadeshwar Jha, Bhagalpur University, Alfred Marshall, University of Leeds, A.J. Brown
    JEL: B29 B31
    Date: 2018–06–21
  5. By: Hubert Bonin
    Abstract: Lessons from economic history are ever difficult to seize on because the motto \"this time is different\" and so many managerial fads foster a lack of lucidity. Anyway business and banking historians stick to their struggle to convince managers and bankers to read into academic books or journals, and to pick up levers to gauge cyclical trends, evolutions of balance sheet, pending risks, etc. This article delves into the history of banking crisis to fuel arguments about the challenges to be faced against herding bad practices as behavourial finance gathered Momentum since the 2007-2009 crisis.
    Keywords: banks, crisis, risks, credit, issues of balance-sheets solidity
    JEL: G01 G02 G21 N21 N80
    Date: 2018
  6. By: Claude Gamel (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Although they lived a century apart, Hayek might be considered as the liberal counterpart of Marx: not only both carried out transdisciplinary studies but they also used a dialectic approach. According to Hayek, the evolution of human societies can't remain under control because the " spontaneous social order " is opposed to " organisations " , which rests upon a conflict between two kinds of rationality at the epistemological level (I). That opposition can only be overcome, in the legal order, through the fine tracking of " abstract rules of just conduct " (II). However Hayek's pessimistic view remains and results from the divergence, in the field of economics, between the rules necessary for the market order and a conception of justice in society which is too ambitious and can even destroy it (III). In conclusion, we ask the question of which safeguards are relevant nowadays to make liberal societies survive, as Hayek sought.
    Abstract: Hayek peut être considéré, à un siècle de distance, comme l'homologue libéral de Marx, non seulement par le caractère transdisciplinaire de la réflexion, mais surtout par le recours à une démarche dialectique. Selon Hayek, l'évolution non maîtrisable des sociétés humaines oppose « ordre social spontané » et « organisations » et repose sur un conflit de « rationalité » d'ordre épistémologique (I). Cette opposition ne peut être surmontée, dans l'ordre juridique, qu'au prix du repérage délicat de « règles abstraites de juste conduite » (II). Le pessimisme propre à Hayek résulte alors, dans le champ de l'économie, de la divergence entre les règles nécessaires à l'ordre du marché et une conception trop ambitieuse de la justice en société qui risque de le détruire (III). D'où l'évocation, en conclusion, de la pertinence aujourd'hui des garde-fous à mettre en place, pour que, selon Hayek, les sociétés libérales puissent malgré tout survivre.
    Keywords: Rules of just conduct,Liberalism, Dialectics, Spontaneous order,Organisations, Dialectique,Libéralisme, Ordre spontané, Organisations, Règles de juste conduite
    Date: 2018–07–05
  7. By: Adriano Do Vale (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: La fin des années 80 et les années 90 ont été marquées par une grande vague d'adoption de l'indépendance des banques centrales (IBC). Les manuels et les revues de la littérature adoptent souvent un récit historique standard la présentant comme une sucess story, comme l'application d'un consensus théorique. L'art aurait suivi le pas de la science. Cet article a comme finalité ultime de proposer un récit alternatif concernant l'IBC. Adoptant une perspective historique centrée sur la première partie des années 20, nous entendons démontrer que la doctrine des banquiers centraux et les pratiques, comprises en tant qu'adoption de l'IBC, précédent la théorie, l'art venant alors avant la science. Vue de façon normative par la littérature économique à partir des années 80, l'indépendance est pensée, dès les années 20, par les praticiens qui posent eux-mêmes les principes du central banking. Dans la nouvelle donne de l'après-guerre, marquée par l'absence de l'ancrage nominal autrefois fourni par l'étalon-or, l'IBC s'avère un arrangement institutionnel alternatif face à l'inflation. Elle est recommandée au niveau international et constitue un principe central de la doctrine du central banking avancé par le gouverneur anglais Montagu Norman. Comme pour le principe d'indépendance, les pratiques précèdent la théorie. On considère qu'il y a eu une première vague d'adoption de l'IBC dans la première moitié des années 20, bien avant la vague d'adoption de l'IBC de la fin des années 80 et des années 90. Suite à des expériences hyper-inflationnistes et dans le cadre de plans de stabilisation monétaire sous tutelle internationale, les banques centrales de l'Autriche (1923), de la Hongrie (1924) et de l'Allemagne (1922-24) deviennent légalement indépendantes.
    Date: 2017–12–12
  8. By: Nicolas Vallois (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Dorian Jullien (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)
    Abstract: We propose a historical perspective on replication in experimental economics focused on public good games. Our intended contribution is twofold: in terms of method and in terms of object. Methodologically, we blend traditional qualitative history of economics with a less traditional quantitative approach using basic econometric tools to detect unnoticed historical patterns of replication. In terms of our object, we highlight a type of replication that we call " baseline replication " , which is not present in explicit methodological discussions, yet central in the specificity of experimental economics regarding replication in economics.
    Keywords: Experimental Economics, Replication, History of Economic Thought,Methodology, Public Good Experiments
    Date: 2017–11–28
  9. By: Angel Asensio (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: La Théorie Générale est ici présentée comme une reconstruction de la théorie macroéconomique basée sur un réexamen de ses fondements microéconomiques en rapport avec l'incertitude fondamentale.
    Keywords: incertitude,esprits animaux, fondements microéconomiques, Théorie Générale , prise de décision
    Date: 2017–10–16
  10. By: 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 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Frank Heinemann (TUB - Technische Universität Berlin)
    Abstract: This chapter lays out in which respects laboratory experiments can be useful for macroeconomics and discusses some of the methods used in such experiments.
    Keywords: laboratory experiments, macroeconomics
    Date: 2018
  11. By: Besley, Timothy
    Abstract: Angus Deaton was awarded the 2015 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his analysis of consumption, poverty, and welfare. This article reviews his contributions to economics.
    Keywords: Consumption; poverty measurement; well-being
    JEL: D10 D31 I30
    Date: 2016–07–01
  12. By: Aurora García-Gallego (LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Nikolaos Georgantzis (Burgundy School of Wines and Spirits Business, Dijon, France); María José Ruiz-Martos (Dept. de Teoría e Historia Económica, University of Granada, Spain)
    Abstract: We present experimental data from the Heaven-Dictator game, a generalization of the dictator game that investigates the overstatement of inequality reduction in the motivation of social preferences. In this game, two players start with equal endowments and the heaven-dictator player, without incurring in any pecuniary cost or profit, chooses among increasing, decreasing or maintaining the earnings of the passive player. Thus, any choice except for the status quo generates unequal payoffs. The design avoids the experimenter demand effect of the standard “give only” version while simultaneously allowing participants to manifest antisocial preferences, inequity aversion or retaliation cannot be called for as motives. We find that the overwhelming majority of subjects, 75.4%, choose to increase their partners’ earnings; however, there is a non-negligible 24.6% of subjects that either choose the status quo (11.9%) or to decrease (12.7%) their partners’ earnings. Based on the psychological literature on music as a mood-inducing stimulus and on the effects of mood on helping behavior, we study the effect of exposure to different types of music on the heaven-dictator choices. Overall, observed preferences are independent of the music condition.
    Keywords: experiment, behavior, other-regarding preferences, music, dictator game
    JEL: C72 C91
    Date: 2018
  13. By: Sheremeta, Roman; Smith, Vernon
    Abstract: The Protestant Reformation is a vivid example of how religious transformation could set in motion institutional changes, leading to profound consequences for economic and political development. Although economists and other social scientists agree that there is a strong relation between the Reformation and economic growth, there is an active discussion as to what are the causal pathways connecting Protestantism to long-run economic success. We discuss the causal pathways that received substantial empirical support in academic literature. Some of them, such as “work ethic” and entrepreneurial spirit of Protestants, were originally suggested by Max Weber, while others, such as religious freedom and education, are deeply grounded in economic theory. More recently, other causal pathways have been suggested, such as social ethic, civil society, and institutional changes. We bring our view of these pathways.
    Keywords: Reformation, religion, economic development
    JEL: A13 B15 E02 Z12
    Date: 2017–05–07
  14. By: Jérôme Ballet
    Abstract: The rapprochement between anthropology and economics is not a new subject of debate. Economic anthropology, whose very survival has largely been attributed to Marxism, remains a minor field of interest within anthropology and perhaps even more so within economics. Over recent years, researchers have argued that anthropology and economics should be interwoven, but few conceptual and empirical analyses have taken up the cause. The aim of this article is to promote a microeconomic anthropology. We discuss a contextual methodology and illustrate its advantages by way of interpersonal transfers.
    Keywords: Transfers, Contextualism, Rights and Obligations, Social Anthropology
    JEL: D01 B41
    Date: 2018
  15. By: Mehrdad Vahabi (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper explores the evolution of Kornai's thought on General Equilibrium Theory (GET) and his position on mainstream economics. Three moments in this evolution will be highlighted starting by rejecting GET and advocating disequilibrium in Anti-Equilibrium (1971). While Kornai does not treat the 'equilibrium paradigm' as irrelevant, he suggests an alternative paradigm, namely economic systems theory that he further develops in the eighties as 'system paradigm'. Economics of Shortage (1980) marks a second phase in which Kornai distinguishes Walrasian equilibrium from normal state or Marshallian equilibrium. In this phase, he supports Marshallian equilibrium rather than disequilibrium. Finally By Force of Thought (2006) is a critical self-appraisal in which Kornai considers Anti-Equilibrium as a 'failure' and acknowledges GET as a benchmark of an ideal competitive market. He now advocates a Walrasian equilibrium as an abstract reference model but refuses to consider this model as a description of reality. In this sense, he refuses the New Classical economics. Paradoxically however, his original heterodox concept of 'soft budget constraint', irreconcilable with standard microeconomics, has been integrated in new microeconomics as an optimal intertemporal strategy of a maximizing agent in the absence of credible commitments. It will be argued that Kornai's so-called failure is rather related to his half-in, half-out mainstream position, while his institutionalist system paradigm is still a heterodox research project of the future.
    Keywords: Disequilibrium, Economic Systems Theory, General Equilibrium Theory,Marshallian and Walrasian Equilibrium, New Microeconomics, Normal State, System Paradigm
    Date: 2017–09–07
  16. By: Rehme, Günther
    Abstract: Silvio Gesell hypothesized that money depreciation is economically and socially beneficial, ideas that have often been contended. Here I analyze that in a Sidrauski model in which households additionally have a "love of wealth"-motive. It is shown Gesell's claims may be valid in a demand-determined, short-run equilibrium and why money depreciation overcomes the zero lower bound on nominal interest rates. However, for a typical long-run equilibrium introducing money depreciation in isolation may be bad. But money depreciation, when coupled with expansionary monetary policy, is a necessary condition for a positive Mundell-Tobin effect on long-run real variables and so creates wealth in the model. It is found that this also holds in the transition to the long-run equilibrium. Hence, the spirit of Gesell's hypotheses can be verified for a plausible, long-run environment.
    Keywords: Economic Performance,Depreciating Money,Zero Lower Bound,Demonetization,Love of Wealth
    JEL: E1 E5 O4
    Date: 2018
  17. By: Fremdling, Rainer
    Abstract: Abstract: NS-War Economy 1933-1945 and Abstract: The Emergence of the Planned Economy in East-Germany 1945-1949/50 The major part deals with economic statistics as an instrument for warfare and war preparation. Firstly, the involvement of German Statistical Office (Statistisches Reichsamt) is described and analyzed: as soon as in 1934, plans emerged in the Office to conduct periodical industrial censuses as a means of a statistical information system to meet the demands of a planned or commanded economy for warfare. The comprehensive industrial census of 1936 became the main source for this purpose. Secondly, the statistical information is put forward. It was increasingly provided by mandatory reporting of private industrial firms and their organizations, which became instrumental in steering the German economy. Officially and privately organized economic statistics finally merged: during the war, the Ministry of Economics set up a statistical information system based on the collaboration between the German Statistical Office and the German Institute for Economic Research (Deutsches Institut für Wirtschaftsforschung). In 1943, the responsible department of the Ministry of Economics was incorporated into the Planning Office (Planungsamt) of Speer´s Ministry for Armament. Within this centre of economic command economic statistics became an essential tool for running the German economy during the last years of the war. In a separate chapter, plans of the Ministry of Economics during the last months of the war are highlighted which aimed at designing an institutional framework for centralizing and centrally steering German empirical economic research and economic statistics after the war. Finally, the use of the NS-statistics after the war is touched upon, thus forming a bridging chapter to East-Germany setting up its planned economy. A separate case study deals with a report of the Statistical Office asked for by the Ministry of Economics in 1936 to estimate the assets of German Jews. Immediately after the war, the commands of Soviet Military Administration for Germany (SMAD) endeavoured to re-establish and increase production in the Soviet Zone of Occupation (SBZ). For short term economic planning, they required regular statistical reports from business firms. Not before 1948, however, did the Central Statistical Office (StZA) founded in the fall of 1945 succeed in standardizing and centralizing the statistics reported by business firms. The federal structure of the SBZ with its strong position of the independent statistical offices of the individual states was to blame for the delay. It was finally overcome when the StZA became a major department of the newly created German Economic Commission (DWK), the centralized governmental body of the SBZ. Right from the beginning, the StZA drew on economic statistics of NS-Germany to obtain a basis for steering and planning the East German economy. Above all in 1947/48, the original files of the Industrial Census of 1936 were rearranged and evaluated for the Two-Years-Plan of 1949/50, the first elaborate planning scheme of the GDR. Until then the insufficient statistical reporting system of East Germany had not allowed such a planning.
    Keywords: Nazi-Germany; East-Germany after the War; War Economy; Plan Economy
    JEL: H56 N14 N44 P21
    Date: 2018–06–30
  18. By: Carlos Alós-Ferrer; Jaume García-Segarra; Alexander Ritschel
    Abstract: We present a novel design measuring a correlate of social preferences in a high-stakes setting. In the Big Robber Game, a "robber" can obtain large personal gains by appropriating the gains of a large group of "victims" as seen in recent corporate scandals. We observed that more than half of all robbers take as much as possible. At the same time, participants displayed standard, prosocial behavior in the Dictator, Ultimatum, and Trust games. That is, prosocial behavior in the small is compatible with highly selfish actions in the large, and the essence of corporate scandals can be reproduced in the laboratory even with a standard student sample. We show that this apparent contradiction is actually consistent with received social-preference models. In agreement with this view, in the experiment more selfish robbers also behaved more selfishly in other games and in a donation question. We conclude that social preferences are compatible with rampant selfishness in high-impact decisions affecting a large group.
    Keywords: Big Robber Game, social preferences, corporate scandals, incentives
    JEL: C72 C92 D03
    Date: 2018–06
  19. By: George APOSTOLAKIS (Nyenrode Business Universiteit, Department of Economics, University of Crete); Gert VAN DIJK (Department of Social Sciences, Wageningen University, Wageningen, The Netherlands; TIAS School for Business and Society, Tilburg University, Tilburg, The Netherlands; Centre for Entrepreneurship, Governance & Stewardship, Nyenrode Business Universiteit, Breukelen, The Netherlands.)
    Abstract: The theoretical structure and management of a cooperative organization have not changed much during the last decades. Most importantly, the role of the members’ council in corporate governance remains neglected in the contemporary cooperative literature. In this paper, we offer a new perspective on how cooperative organizations can cope with future challenges by re-establishing the role of the members’ council and the members in cooperative organizations
    Keywords: cooperative models; members’ council; random selection; deliberative democracy
    JEL: P13 D23 D72 L30 L31
    Date: 2018–04
  20. By: Michele Berardi
    Abstract: Bounded rationality requires assumptions about ways in which rationality is constrained and agents form their expectations. Evolutionary schemes have been used to model beliefs dynamics, with agents choosing endogenously among a limited number of beliefs heuristics according to their relative performance. This work shows that arbitrarily constraining the beliefs space to a ?nite (small) set of possibilities can generate arti?cial equilibria that can be stable under evolutionary dynamics. Only when "enough" heuristics are available, beliefs in equilibrium are not arti?cially constrained. I discuss these ?ndings in light of an alternative approach to modelling beliefs dynamics, namely adaptive learning.
    Date: 2018
  21. By: Benny Moldovanu; Andreas Kleiner
    Abstract: We study killer amendments under various informational regimes and postulated voter behavior. In particular, the success chances of killer amendments are shown to differ across several well-known binary, sequential voting procedures. In light of this theory, we describe a remarkable instance of a motion-proposing and agenda-setting strategy by the Nazi party, NSDAP, during the Weimar Republic. Their purpose was to kill a motion of toleration of the new 1928 Government, and they were supported by their fiercest enemies on the far left, the communist party. The combined killer strategy was bound to be successful, but it ultimately failed because of another agenda-setting counter-move undertaken by the Reichstag president.
    Keywords: sequential voting, killer amendment, agenda-setting
    JEL: D72 N4
    Date: 2018–07
  22. By: Benny Moldovanu; Alex Gershkov; Xianwen Shi
    Abstract: We study a multi-dimensional collective decision under incomplete information. Agents have Euclidean preferences and vote by simple majority on each issue (dimension), yielding the coordinate-wise median. Judicious rotations of the orthogonal axes - the issues that are voted upon - lead to welfare improvements. If the agents' types are drawn from a distribution with independent marginals then, under weak conditions, voting on the original issues is not optimal. If, in addition, the marginals are identical, then voting first on the total sum and next on the differences is often welfare superior to voting on the original issues. We also provide various lower bounds on incentive efficiency: in particular, if agents' types are drawn from a log-concave density with symmetric marginals, a second-best voting mechanism attains at least 88% of the first-best efficiency.
    Keywords: multi-dimensional voting , welfare , bundling
    JEL: D82 D71
    Date: 2018–07
  23. By: Julien Hugonnier (Ecole Polytechnique Fédérale de Lausanne and Swiss Finance Institute); Florian Pelgrin (EDHEC Business School); Pascal St-Amour (University of Lausanne and Swiss Finance Institute)
    Abstract: The Human Capital (HK) and Statistical Life Values (VSL) differ sharply in their empirical pricing of a human life and lack a common theoretical background to justify these differences. We first contribute to the theory and measurement of life value by providing a unified framework to formally define and relate the Hicksian willingness to pay (WTP) to avoid changes in death risks, the HK and the VSL. Second, we use this setting to introduce an alternative life value calculated at Gunpoint (GPV), i.e. the WTP to avoid certain, instantaneous death. Third, we associate a flexible human capital model to the common framework to characterize the WTP and the three life valuations in closed-form. Fourth, our structural estimates of these solutions yield mean life values of 8.35 M$ (VSL), 421 K$ (HK) and 447 K$ (GPV). We con firm that the strong curvature of the WTP and the linear projection hypothesis of the VSL explain why the latter is much larger than other values.
    Keywords: Value of Human Life, Human Capital, Value of Statistical Life, Hicksian Willingness to Pay, Equivalent Variation, Mortality, Structural Estimation
    JEL: J17 G11
    Date: 2018–04
  24. By: César Hidalgo; Pierre-Alexandre Balland; Ron Boschma; Mercedes Delgado; Maryann Feldma; Koen Frenken; Edward Glaeser; Canfei He; Dieter F. Kogler; Andrea Morrison; Frank Neffke; David Rigby; Scott Stern; Siqi Zheng; Shengjun Zhu
    Abstract: The idea that skills, technology, and knowledge, are spatially concentrated, has a long academic tradition. Yet, only recently this hypothesis has been empirically formalized and corroborated at multiple spatial scales, for different economic activities, and for a diversity of institutional regimes. The new synthesis is an empirical principle describing the probability that a region enters - or exits - an economic activity as a function of the number of related activities pre- sent in that location. In this paper we summarize some of the recent empirical evidence that has generalized the principle of relatedness to a fact describing the entry and exit of products, industries, occupations, and technologies, at the national, regional, and metropolitan scales. We conclude by describing some of the policy implications and future avenues of research implied by this robust empirical principle.
    Keywords: economic complexity, relatedness, economic geography
    Date: 2018–07

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