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on History and Philosophy of Economics |
| By: | Jeannette Brosig-Koch; Timo Heinrich; Heike Hennig-Schmidt; Claudia Keser; Joachim Weimann |
| Abstract: | Since Mancur Olson's "Logic of collective action" it is common conviction in social sciences that in large groups the prospects of a successful organization of collective actions are rather bad. Following Olson’s logic, the impact of an individual’s costly contribution becomes smaller if the group gets larger and, consequently, the incentive to cooperate decreases with group size. Conducting a series of laboratory experiments with large groups of up to 100 subjects, we demonstrate that Olson's logic does not generally account for observed behavior. Large groups in which the impact of an individual contribution is almost negligible are still able to provide a public good in the same way as small groups in which the impact of an individual contribution is much higher. Nevertheless, we find that small variations of the MPCR in large groups have a strong effect on contributions. We develop a hypothesis concerning the interplay of MPCR and group size, which is based on the assumption that the salience of the advantages of mutual cooperation plays a decisive role. This hypothesis is successfully tested in a second series of experiments. Our result raises hopes that the chance to organize collective action of large groups is much higher than expected so far. Since Mancur Olson's "Logic of collective action" it is common conviction in social sciences that in large groups the prospects of a successful organization of collective actions are rather bad. Following Olson’s logic, the impact of an individual’s costly contribution becomes smaller if the group gets larger and, consequently, the incentive to cooperate decreases with group size. Conducting a series of laboratory experiments with large groups of up to 100 subjects, we demonstrate that Olson's logic does not generally account for observed behavior. Large groups in which the impact of an individual contribution is almost negligible are still able to provide a public good in the same way as small groups in which the impact of an individual contribution is much higher. Nevertheless, we find that small variations of the MPCR in large groups have a strong effect on contributions. We develop a hypothesis concerning the interplay of MPCR and group size, which is based on the assumption that the salience of the advantages of mutual cooperation plays a decisive role. This hypothesis is successfully tested in a second series of experiments. Our result raises hopes that the chance to organize collective action of large groups is much higher than expected so far. |
| Date: | 2018–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2018s-02&r=hpe |
| By: | Franz Dietrich (Centre d'Economie de la Sorbonne Author-Workplace-Homepage: https://centredeconomiesorbonne.univ-paris1.fr); Brian Jabarian (Centre d'Economie de la Sorbonne) |
| Abstract: | How should we evaluate options when we are uncertain about the correct standard of evaluation, for instance due to conflicting normative intuitions? Such 'normative' uncertainty differs from ordinary 'empirical' uncertainty about an unknown state, and raises new challenges for decision theory and ethics. The most widely discussed proposal is to form the expected value of options, relative to correctness probabilities of competing valuations. We show that the expected-value theory is just one of four natural expectation-based theories. These theories differ in the attitudes to normative risk and to empirical risk. The ordinary expected-value theory imposes neutrality to normative risk, whereas its attitude to empirical risk is impartial, i.e., determined by the risk attitudes of the competing valuations deemed possible. The three other theories are, respectively, neutral to both types of risk; impartial to both types of risk; or neutral to empirical but impartial to normative risk. We conditionally defend the theory which is impartial to all risk - the impartial value theory - on the grounds that it respects risk-attitudinal beliefs rather than imposing an ad-hoc risk attitude. Mean-while, our analysis shows how one can address empirical and normative uncertainty within a unified formal framework, and rigorously define risk attitudes of theories |
| Keywords: | empirical uncertainty; normative uncertainty; risk attitude; expected value; impartial value |
| JEL: | D81 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:18029&r=hpe |
| By: | Franz Dietrich (Centre d'Economie de la Sorbonne Author-Workplace-Homepage: https://centredeconomiesorbonne.univ-paris1.fr); Antonios Staras (University of East Anglia); Robert Sugden (University of East Anglia) |
| Abstract: | John Broome has developed an account of rationality and reasoning which gives philosophical foundations for choice theory and the psychology of rational agents. We formalize his account into a model that differs from ordinary choice-theoretic models through focusing on psychology and the reasoning process. Within that model, we ask Broome's central question of whether reasoning can make us more rational: whether it allows us to acquire transitive preferences, consistent beliefs, non-akratic intentions, and so on. We identify three structural types of rationality requirements: consistency requirements, completeness requirements, and closedness requirements. Many standard rationality requirements fall under this typology. Based on three theorems,we argue that reasoning is successful in achieving closedness requirements, but not in achieving consistency or completeness requirements. We assess how far our negative results reveal gaps in Broome's theory, or deficiencies in choice theory and behavioural economics |
| Keywords: | rationality; reasoning; intention; beliefs; preferences; consistency; completeness; deductive closure |
| JEL: | D01 D80 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:18030&r=hpe |
| By: | Daniel J. Benjamin |
| Abstract: | Errors in probabilistic reasoning have been the focus of much psychology research and are among the original topics of modern behavioral economics. This chapter reviews theory and evidence on this topic, with the goal of facilitating more systematic study of belief biases and their integration into economics. The chapter discusses biases in beliefs about random processes, biases in belief updating, the representativeness heuristic as a possible unifying theory, and interactions between biased belief updating and other features of the updating situation. Throughout, I aim to convey how much evidence there is for (and against) each putative bias, and I highlight when and how different biases may be related to each other. The chapter ends by drawing general lessons for when people update too much or too little, reflecting on modeling challenges, pointing to areas of economics to which the biases are relevant, and highlighting some possible directions for future work. |
| JEL: | D03 D90 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25200&r=hpe |
| By: | Nicola, Gatti; Mario, Gilli; Alberto, Marchesi; |
| Abstract: | Van Damme [1984] introduces the concept of quasi-perfect equilibrium, which refines sequential equilibrium as well as normal-form perfect equilibrium. It has been argued by Mertens [1995] that quasi-perfection is conceptually superior to extensive- form perfection, since quasi-perfection guarantees normal-form perfection, which for two-player games is equivalent to admissibility. On the other hand, while extensive-form perfect equilibria are defined as limit points of sequences of Nash equilibria of a general class of perturbed games in extensive form, till now, to the best of our knowledge, there is no characterization of quasi-perfect equilibria in terms of limit points of equilibria of perturbed games. The only known result is Lemma 1 by Miltersen and Sorensen [2010], showing that limit points of sequences of Nash equilibria of a particular class of perturbed games in sequence form are quasi-perfect equilibria of the original, unperturbed game in extensive form. However, as the authors point out, their main result only proves that a subset of the quasi-perfect equilibria can be obtained as limit points of equilibria of their class of perturbed games, and, thus, their paper provides no characterization of quasi-perfect equilibria in terms of perturbed games. The present paper fills this gap providing such characterization, showing that any quasi-perfect equilibrium can be obtained as limit point of a sequence of Nash equilibria of a certain class of perturbed games in sequence form, at least for the case of two-player games with nature. This result shows that the sequence form is not merely a computationally efficient representation, but it also captures game features that other forms are not able to effectively express. |
| Keywords: | Non-cooperative Game Theory, Extensive Games, Nash Equilibrium Refinements |
| JEL: | C70 C72 |
| Date: | 2018–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:389&r=hpe |
| By: | Andrew Postlewaite (Department of Economics, University of Pennsylvania); David Schmeidler (Tel-Aviv University) |
| Abstract: | There are two parts in our note. The first highlights Leo's contribution that earned him the Nobel prize in economics, from a personal point of view. The second discusses further questions that can naturally be addressed using Leo's conceptual framework. |
| Keywords: | Hurwicz, Mechanism Design, Implementation |
| JEL: | D0 |
| Date: | 2018–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:18-027&r=hpe |
| By: | Speranta Dumitru (CERLIS - UMR 8070 - CERLIS - Centre de recherche sur les liens sociaux - UMR 8070 - CNRS - Centre National de la Recherche Scientifique - UPD5 - Université Paris Descartes - Paris 5 - Université Sorbonne Nouvelle - Paris 3) |
| Abstract: | Le nationalisme méthodologique est la tendance à prendre l'Etat-nation pour l'unité naturelle de l'analyse des phénomènes sociaux. Mais comment ce biais affecte-t-il les théories de la justice distributive? Pour répondre, on distingue d'abord trois versions de nationalisme méthodologique, pour montrer ensuite que la théorie de Rawls endosse les trois versions. Les arguments fondés sur la justice en pâtissent. |
| Keywords: | Methodological nationalism,Social justice,Global inequality,Equal Opportunity,Globalisation,Nationalisme,Justice sociale,Inégalités,Inégalités mondiales,Nationalisme méthodologique |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01900316&r=hpe |
| By: | Rod Cross (Department of Economics, University of Strathclyde) |
| Abstract: | In this paper we ask what happens in the medium-term interregnum between the domain of the short-run Phillips curve and that of the long-run effects on the natural rate of unemployment, according to Friedman's conjecture. We discuss the new classical and hysteresis alternatives to Friedman's conjecture, and some of the methodological issues involved in appraising the conjecture. A simple model, and some data, are employed in this task. |
| Keywords: | Friedman, Nobel Prize Address, Phillips Curves, Short Run, Medium Run, Long Run. |
| JEL: | B22 E30 E31 N10 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1814&r=hpe |
| By: | Decker, Frank; Goodhart, Charles A |
| Abstract: | This paper assesses the theory of credit mechanics within the context of the current money supply debate. Credit mechanics and related approaches were developed by a group of German monetary economists during the 1920s-1960s. Credit mechanics overcomes a one-sided, bank-centric view of money creation, which is often encountered in monetary theory. We show that the money supply is influenced by the interplay of loan creation and repayment rates; the relative share of credit volume neutral debtor-to-debtor and creditor-to-creditor payments; the availability of loan security; and the behavior of non-banks and non-borrowing bank creditors . With the standard textbook models of money creation now discredited, we argue that a more general approach to money supply theory involving credit mechanics needs to be established. |
| Keywords: | balances mechanics; Bank credit; credit creation; credit mechanics; money supply theory |
| JEL: | E40 E41 E50 E51 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13233&r=hpe |
| By: | Stefan Bach |
| Abstract: | Die „Erzbergerschen Steuer- und Finanzreformen“ 1919/20 haben das deutsche Steuer- und Finanzsystem nahezu vollständig umgestaltet, modernisiert und stark ausgebaut. Wesentliche Elemente dieser Reformen haben bis heute Bestand– die Grundstrukturen des Steuersystems und der Steuerrechtsordnung sowie der zentralistische kooperative Finanzföderalismus. Das NS-Regime konsolidierte die Reformen und erhöhte die Steuerbelastungen weiter. Wiederaufbau und Wirtschaftswunder begannen bei sehr hohen Einkommensteuersätzen, die erst schrittweise gesenkt wurden. Steuervergünstigungen unterstützten die Struktur- und Regionalpolitik seit den 50er Jahren, der Sozialstaat wurde ausgebaut, seit den 60er Jahren wurden gesamtwirtschaftliche Stabilisierungsziele verfolgt. Ab den 70er Jahren dominierten Strukturprobleme und Konsolidierung die Steuer- und Finanzpolitik, seit den 80er Jahren angebotsökonomische und (neo)liberale Reformagenden. Die Steuern auf hohe Einkommen und Vermögen wurden gesenkt, die indirekten Steuern ausgebaut. Seit der Finanzkrise 2009 stehen Verteilungsfragen wieder stärker im Vordergrund. |
| Keywords: | History of taxation, taxation system, tax reform |
| JEL: | N44 H20 H11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1767&r=hpe |
| By: | José Alberto Molina (Departamento de Análisis Económico, Universidad de Zaragoza); David Iñiguez (Fundación ARAID, Diputación General de Aragón); Gonzalo Ruiz (Instituto de Biocomputación y Física de Sistemas Complejos (BIFI), Zaragoza); Alfonso Tarancón (Departamento de Física Teórica, Universidad de Zaragoza) |
| Abstract: | We analyse the research production of Nobel laureates in Economics, employing the JCR Impact Factor (IF) of their publications. We associate this production indicator with the level of collaboration established with other authors, using Complex Networks techniques applied to the co-authorship networks. We study both individual and collaborative behaviours, and how the professional output, in terms of publications, is related to the Nobel Prize. The study encompasses a total of 2,150 papers published between 1935 and the end of 2015 by the laureates in Economics awarded between 1969 and 2016. Our results indicate that direct collaborations among laureates are, in general, rare, but when we add all the co-authors of the laureates, the network becomes more dense, and appears as a giant component containing 70% of the nodes, which means that more than two thirds of the laureates can be connected through only two steps. We have been able to measure that, in general, a higher level of collaboration leads to a larger production. Finally, when looking at the evolution of the research output of the laureates, we find that, for most of those awarded up to the mid-1990s, the production is more stable, with a gradual decrease after the awarding of the Prize, and those awarded later experience a sharp growth in the IF before the Prize, a decrease during the years immediately following, and a new increase afterwards, returning to high levels of impact. |
| Keywords: | Nobel prize, Economics, research productivity, coauthorship, networks |
| JEL: | C45 D85 A11 |
| Date: | 2018–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:966&r=hpe |