nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2018‒10‒15
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. Economic Policy in a Recession. Lessons from the Past By Gerald Roy Steele
  2. Prosocial Managers, Employee Motivation, and the Creation of Shareholder Value By Kajackaite, Agne; Sliwka, Dirk
  3. Methods Matter: P-Hacking and Causal Inference in Economics By Brodeur, Abel; Cook, Nikolai; Heyes, Anthony
  4. Relative Income and Happiness: An Experiment By Ifcher, John; Zarghamee, Homa; Houser, Daniel; Diaz, Lina
  5. Une lecture épistémologique de la théorie des parties prenantes By Jean-Jacques Pluchart; Odile Uzan
  6. Sniff Tests in Economics: Aggregate Distribution of Their Probability Values and Implications for Publication Bias By Christopher Snyder; Ran Zhuo
  7. Tentatives de réhabilitation de la théorie de la base : à la recherche des origines By Jessie Lerousseau
  8. The Stockholm School in a New Age – Erik Lundberg and the Swedish Model By Erixon, Lennart
  9. Geography, Trade and Power-law Phenomena By Chang, Pao-Li; Hsu, Wen-Tai
  10. The Impact of Social Norms, Feedback, and Price Information on Conservation Behavior: A Meta-Analysis By Nemati, Mehdi; Penn, Jerrod
  11. The Pivotal Role of Fairness: Which Consumers Like Annuities? By Suzanne B. Shu; Robert Zeithammer; John W. Payne

  1. By: Gerald Roy Steele
    Abstract: When an economy drops suddenly into recession, the paramount objective of any policy initiative is to avoid deflation. To that end, quantitative easing has little to offer. Arguments from the 1930s are assessed within the context of the recent Global Financial Crisis, where the preceding twenty years of the Great Moderation had left economists high on hubris. In avoiding their deserved comeuppance, economists continue to parade an ever-more sophisticated intertwining of statistical data within mathematical relationships that is essentially divorced from social and political relevance. Though sorely needed, the broad strokes of a politico-historical perspective are rarely found within the purview of current mainstream economics.
    Keywords: Central Banking, Deflation, Keynes, Simons Sovereign debt
    JEL: B31 E58 H63
    Date: 2018
  2. By: Kajackaite, Agne (WZB - Social Science Research Center Berlin); Sliwka, Dirk (University of Cologne)
    Abstract: Milton Friedman has famously claimed that the responsibility of a manager who is not the owner of a firm is "to conduct the business in accordance with their [the shareholders'] desires, which generally will be to make as much money as possible." In this paper we argue that when contracts are incomplete it is not necessarily in the interest even of money maximizing shareholders to pick a manager who pursues this goal. We show in a formal model and in a series of lab experiments that choosing a manager who has a preference to spend resources for social causes can increase employee motivation. In turn, ex-post losses in shareholder value may be offset by ex-ante gains in performance through higher employee motivation.
    Keywords: shareholder value, corporate social responsibility, incentives, motivation, experiment
    JEL: C91 D03 D21 J33 M52
    Date: 2018–08
  3. By: Brodeur, Abel (University of Ottawa); Cook, Nikolai (University of Ottawa); Heyes, Anthony (University of Ottawa)
    Abstract: The economics 'credibility revolution' has promoted the identification of causal relationships using difference-in-differences (DID), instrumental variables (IV), randomized control trials (RCT) and regression discontinuity design (RDD) methods. The extent to which a reader should trust claims about the statistical significance of results proves very sensitive to method. Applying multiple methods to 13,440 hypothesis tests reported in 25 top economics journals in 2015, we show that selective publication and p-hacking is a substantial problem in research employing DID and (in particular) IV. RCT and RDD are much less problematic. Almost 25% of claims of marginally significant results in IV papers are misleading.
    Keywords: research methods, causal inference, p-curves, p-hacking, publication bias
    JEL: A11 B41 C13 C44
    Date: 2018–08
  4. By: Ifcher, John (Santa Clara University); Zarghamee, Homa (Barnard College); Houser, Daniel (George Mason University); Diaz, Lina (George Mason University)
    Abstract: John Stuart Mill claimed that "men do not desire merely to be rich, but richer than other men." Do people desire to be richer than others? Or is it that people desire favorable comparisons to others more generally, and being richer is merely a proxy for this ineffable relativity? We conduct an online experiment absent choice in which we measure subjective wellbeing (SWB) before and after an exogenous shock that reveals to subjects how many experimental points they and another subject receive, and whether or not points are worth money. We find that subjects like receiving monetized points significantly more than non-monetized points but dislike being "poorer" than others in monetized and non-monetized points equally, suggesting relative money is valued only for the relative points it represents. We find no evidence that subjects like being "richer" than others. Subgroup analyses reveal women have a strong(er) distaste for being "richer" and "poorer" (than do men), and conservatives have a strong(er) distaste for being "poorer" (than do progressives). Our experimental-SWB approach is easy to administer and can provide some insights a revealed-preference approach cannot, suggesting that it may complement choice-based tasks in future experiments to better estimate preference parameters.
    Keywords: subjective well-being, relative income, others' income, income comparisons, happiness, experiments
    JEL: C91 D31 D63 I31
    Date: 2018–08
  5. By: Jean-Jacques Pluchart (CRG - Centre de recherche en gestion - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Odile Uzan (UPD5 - Université Paris Descartes - Paris 5)
    Abstract: Our paper tries to show that the validity, the legitimacy and the performativity of the theory of the stakeholders, rest on a double epistemological logic, at the same time philosophical and sociological. Our approach of the theory consists in identifying the principal problematic configurations of which the resolution allowed its construction. The methodology of our research is inspired by the " archaeological " step developed by Foucault in various fields of knowledge. It rests on a critical analysis of research, with an aim of observing the evolution of the relationship between the process of theoriza-tion in the course of construction and the practices of management which it inspires and which it takes as a starting point.
    Abstract: Notre recherche a pour objet de montrer que la validité, la légitimité et la performativité de la théorie des parties prenantes, reposent sur une double logique épistémologique, à la fois philosophique et sociologique. Notre approche de la théorie consiste à identifier les principales configurations problématiques dont la résolution a permis sa construction. La méthodologie de notre recherche est donc inspirée par la démarche « archéologique » développée par Foucault dans divers domaines du savoir. Elle repose sur une analyse critique des recherches, dans le but d'observer l'évolution des rapports entre le processus de théorisation en cours de construction et les pratiques de gestion qu'il inspire et dont il s'inspire.
    Keywords: stakeholders,epistemology,paradigm,theory,parties prenantes,théorie,paradigme,épistémologie
    Date: 2017–06–01
  6. By: Christopher Snyder; Ran Zhuo
    Abstract: The increasing demand for rigor in empirical economics has led to the growing use of auxiliary tests (balance, specification, over-identification, placebo, etc.) supporting the credibility of a paper's main results. We dub these "sniff tests" because standards for passing are subjective and rejection is bad news for the author. Sniff tests offer a new window into publication bias since authors prefer them to be insignificant, the reverse of standard statistical tests. Collecting a sample of nearly 30,000 sniff tests across 60 economics journals, we provide the first estimate of their aggregate probability-value (p-value) distribution. For the subsample of balance tests in randomized controlled trials (for which the distribution of p-values is known to be uniform absent publication bias, allowing reduced-form methods to be employed) estimates suggest that 45% of failed tests remain in the "file drawer" rather than being published. For the remaining sample with an unknown distribution of p-values, structural estimates suggest an even larger file-drawer problem, as high as 91%. Fewer significant sniff tests show up in top-tier journals, smaller tables, and more recent articles. We find no evidence of author manipulation other than a tendency to overly attribute significant sniff tests to bad luck.
    JEL: A14 B41 C18
    Date: 2018–09
  7. By: Jessie Lerousseau (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique)
    Abstract: L'objectif de ce papier est double. D'une part, il cherche à établir la cohérence des travaux actuels qui mobilisent les éléments clés de la théorie de la base pour déterminer les ressorts du développement économique local en Europe et outre-Atlantique (Farness, 1989 ; Markusen, 2006 ; Rutland & O'Hagan, 2007, Davezies, 2001, 2009, 2012, ...). D'autre part, il doit permettre de remettre au goût du jour une question qui nous semble aujourd'hui négligée et qui mérite d'être approfondie tant elle cristallise des enjeux importants : à quelle(s) échelle(s) d'organisation territoriale mobiliser la théorie de la base ? Sur le premier point, nous montrons que les deux tentatives actuelles de réhabilitation de la théorie de la base semblent privilégier, sans se concerter, une lecture particulière des ascendants intellectuels de ce paradigme (Blumenfeld, 1955 ; Tiebout, 1962) au détriment d'un autre héritage possible (North, 1955). Sur le second point, nous montrons comment le questionnement sur l'échelle de l'analyse économique débouche sur la prise en compte de fractales territoriaux. Mots clés : Base économique, développement territorial, multiplicateur keynésien, économie résidentielle Codes JEL: B29, O18, R10 2
    Keywords: Base économique,développement territorial,multiplicateur keynésien,Economie résidentielle
    Date: 2018–09–14
  8. By: Erixon, Lennart (Dept. of Economics, Stockholm University)
    Abstract: The Stockholm-school member Erik Lundberg is the economist who devoted most attention to the economic theory and policy of the Swedish postwar model. The established view is that Lundberg was a steadfast opponent of the so-called Rehn- Meidner model, an economic and wage policy program developed by two Swedish trade-union economists in the early postwar years. The model recommends fiscal policies in the medium term, extensive labor market programs and wage policies of solidarity to simultaneously obtain price stability, full employment, income equality and high growth. This article maintains that Lundberg shared many of the premises of the Rehn-Meidner model already at the beginning of his debate with Gösta Rehn in the early 1950s. Furthermore, in their debate, Lundberg approached Rehn’s policy program and underlying theory of the working of the Swedish economy. Despite his ideological qualms, Lundberg’s ambiguous attitude to the Rehn-Meidner model turned into a complete adoption of the model in the 1960s. By highlighting the innovative nature of the Rehn-Meidner theory, Lundberg also correctly downplayed the impact of the Stockholm School.
    Keywords: Swedish model; Rehn-Meidner model; Stockholm School; Economic policy; Wage policy of solidarity; Labor-market policy
    JEL: B25 E31 E62 J23 J61 O43
    Date: 2018–09–21
  9. By: Chang, Pao-Li (School of Economics, Singapore Management University); Hsu, Wen-Tai (School of Economics, Singapore Management University)
    Abstract: This article provides a review on the theories of various power-law phenomena related to geography and trade. In particular, we focus our discussion on the gravity equation of trade flows, the power law in firm size, and the link between the two - highlighting the roles of geography and trade in the theoretical modeling. We also discuss how these two power-law phenomena may be related to other power-law phenomena, such as those in income, firm productivity and city size.
    Date: 2018–09–27
  10. By: Nemati, Mehdi; Penn, Jerrod
    Keywords: Resource and Environmental Policy Analysis, Behavioral & Institutional Economics, Experimental Economics
    Date: 2018–06–20
  11. By: Suzanne B. Shu; Robert Zeithammer; John W. Payne
    Abstract: Life annuities can be a valuable component of the decumulation stage of wealth during retirement. While economists argue that most retirees should annuitize, actual demand in the marketplace is low. We analyze data from two studies to determine how measurable individual differences among consumers affect their interest in annuities. We find that a relatively high percentage of respondents dislike all annuities. Demographic factors are not predictive of which individuals dislike annuities, and individual factors predicted by economic models to be important (such as beneficiaries) have small or even opposite effects. The strongest individual differences we measured that predicts liking of annuities is the respondent’s perception of product fairness. We discuss implications of our findings for financial planners hoping to help their customers with these decumulation challenges.
    JEL: G02 G22 M31
    Date: 2018–09

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