nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2020‒02‒10
fourteen papers chosen by
Erik Thomson
University of Manitoba

  1. Conclusion: Perspectives on Urban Theories By Denise Pumain; Juste Raimbault
  2. Know Your Neighbor: The Impact of Social Context on Fairness Behavior By Sircar, Neelanjan; Turley, Ty; van der Windt, Peter Cornelis; Voors, Maarten
  3. A Skeptic's Guide to Modern Monetary Theory By N. Gregory Mankiw
  4. Property is Dummy Proof: An Experiment By Oren Bar-Gill; Christoph Engel
  6. Comments are welcome By Asier Minondo
  7. The Rational Group By Franz Dietrich
  8. Do people choose what makes them happy and how do they decide at all? A theoretical inquiry By Niklas Scheuer
  9. « Théoriser les formes du capitalisme », A propos de Branko Milanovic, Capitalism Alone. The Future of the System That Rules the World, Cambridge, MA: Harvard University Press, 2019, 287 pages By Alexandre Chirat
  10. L’Amérique latine et l’histoire intellectuelle de l’Economie du développement By Jérôme Sgard
  11. Léon Walras and Alfred Marshall : microeconomic rational choice or human and social nature? By Richard Arena; Katia Caldari
  12. La théorie économique est-elle encore utile? By Richard Arena
  13. On free markets, income inequality, happiness and trust By Lous, Bjorn
  14. L’économie de marché est-elle un facteur de paix ? By Jacques Fontanel

  1. By: Denise Pumain (GC (UMR_8504) - Géographie-cités - UP1 - Université Panthéon-Sorbonne - EHESS - École des hautes études en sciences sociales - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique); Juste Raimbault (Center for Advanced Spatial Analysis, UCL - UCL - University College of London [London], ISC-PIF - Institut des Systèmes Complexes - Paris Ile-de-France - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Panthéon-Sorbonne - UP11 - Université Paris-Sud - Paris 11 - X - École polytechnique - Institut Curie - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique, GC (UMR_8504) - Géographie-cités - UP1 - Université Panthéon-Sorbonne - EHESS - École des hautes études en sciences sociales - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: At the end of the five years of work in our GeoDiverCity program, we brought together a diversity of authors from different disciplines. Each person was invited to present an important question about the theories and models of urbanization. They are representative of a variety of currents in urban research. Rather than repeat here the contents of all chapters, we propose two ways to synthesize the scientific contributions of this book. In a first part we replace them in relation to a few principles that were experimented in our program, and in a second part we situate them with respect to a broader view of international literature on these topics. The first part of this concluding chapter is a selection of salient points from our evolutionary theory of urban systems that are discussed in several of the chapters. As many of our results were already published (Pumain et al. 2015; Cura et al. 2017; Pumain & Reuillon 2017) 2 it was possible to confirm them, or to bring more different evidence or contradictory views. For each of these lively research questions, we report the convergent opinions that emerged from the topics discussed, as well as the open and even controversial perspectives for future work. The second part reports a quantitative analysis which arrives at another form of synthesis from the bibliographies of the chapters of the book and their networks of citations. This requires the use of methods for constructing and exploring large digital bibliographical data. Each part gives an overview of the current state of urban science, first of all according to its reported results and then according to the articulations between the conceptions of those who make it. We can easily imagine that in the near future, the second method will become an essential prerequisite for realizing the first, provided that further semantic analysis of the content of papers could be made.
    Date: 2020–01–03
  2. By: Sircar, Neelanjan; Turley, Ty; van der Windt, Peter Cornelis; Voors, Maarten (Wageningen University)
    Abstract: Laboratory experiments offer an opportunity to isolate human behaviors with a level of precision that is often difficult to obtain using other (survey-based) methods. Yet, experimental tasks are often stripped of any social context, implying that inferences may not directly map to real world contexts. We randomly allocate 632 individuals (grouped randomly into 316 dyads) from small villages in Sierra Leone to four versions of the ultimatum game. In addition to the classic ultimatum game, where both the sender and receiver are anonymous, we reveal the identity of the sender, the receiver or both. This design allows us to explore how fairness behavior is affected by social context in a natural setting where players are drawn from populations that are well-acquainted. We find that average offers increase when the receiver's identity is revealed, suggesting that anonymous ultimatum games underestimate expected fair offers. This study suggest that researchers wishing to relate laboratory behavior to contexts in which the participants are well-acquainted should consider revealing the identities of the players during game play.
    Date: 2020–01–14
  3. By: N. Gregory Mankiw
    Abstract: This essay discusses a new approach to macroeconomics called modern monetary theory (MMT). It identifies the key differences between MMT and the approach found in mainstream textbooks. It concludes that while MMT contains some kernels of truth, its most novel policy prescriptions do not follow cogently from its premises.
    JEL: E0 H6
    Date: 2020–01
  4. By: Oren Bar-Gill (Harvard Law School); Christoph Engel (Max Planck Institute for Research on Collective Goods)
    Abstract: Law is for humans. Humans suffer from cognitive limitations. Legal institutions can help humans by making these limitations irrelevant. This experiment shows that strong property rights serve this function. In theory, efficient outcomes obtain even without strong property rights. In a hypothetical world where cognitive ability is perfect, individuals would not engage in wasteful taking wars. A party would not take another’s good, if she expects that the good will ultimately be taken back. By contrast, the large majority of experimental subjects takes a token good when interacting with a computer they know to maximize profit, and that has a symmetric ability to take the good back. Experience mitigates the inefficiency, but does not eliminate it; and in the real world relevant experience is often lacking. We show that cognitive limitations prevent weak property rights – imperfectly enforced property rules and liability rules with low damages – from securing efficient outcomes. Strong property rights should be preferred, because they are dummy proof.
    Keywords: Property, Liability, Cost of Appropriation, Cognitive Limitations, Sophistication, Descriptive and Normative Beliefs
    JEL: C91 D02 D47 D61 K11
    Date: 2020–01
  5. By: Akshay Bhat
    Abstract: This conceptualessay is to introduce management scholars to the topics of Bounded Rationality, as propounded by Simon (1957) with the initial emphasis of the topic being given to Motivation, in addition to Coordination the other central problem to any Economic Organization and Management. Often these terms are used in scholarly articles but there are subtle differences between the economic and behavioural literature parlances, definition and understanding. These definitions as described in economics with their understanding are very important to understand contracts, the nature of contracts and underlying assumptions made. Here, influential articles from prominent economics’ articleare gleaned; the terms’ rationale and understanding and important aspects are documented to serve as a primer for scholars.The article further elucidates the importance and flaws of Contracts: which are prima facie agreements made by two or more people which are voluntary in nature and accepted by both the parties entering into a contract when they both see their advantage, which on further decomposing will be seen to be mutually beneficial as well, however, under important caveats. Key Words:Bounded Rationality, Private Information, Motivation, Coordination, Contracts, Obligations, Adverse Selection, Trust, Commitment, Hold-up Policy
    Date: 2019–12
  6. By: Asier Minondo
    Abstract: Scholars present their new research at seminars and conferences, and send drafts to peers, hoping to receive comments and suggestions that will improve the quality of their work. Using a dataset of papers published in economics journals, this article measures how much peers' individual and collective comments improve the quality of research. Controlling for the quality of the research idea and author, I find that a one standard deviation increase in the number of peers' individual and collective comments increases the quality of the journal in which the research is published by 47%.
    Date: 2020–01
  7. By: Franz Dietrich (CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Can a group be a standard rational agent? This would require the group to hold aggregate preferences which maximise expected utility and change only by Bayesian updating. Group rationality is possible, but the only preference aggregation rules which support it (and are minimally Paretian and continuous) are the linear-geometric rules, which combine individual tastes linearly and individual beliefs geometrically.
    Date: 2020–01–08
  8. By: Niklas Scheuer (Johannes Gutenberg University Mainz)
    Abstract: We develop a theoretical model that jointly explains optimal choices and happiness. We work with constant elasticity of substitution functions for utility and happiness. Employing a choice framework, individuals are confronted with two options. When there exists a trade-off, we determine parametric conditions for which individual happiness and utility coincide as well as oppose each other. Comparing the empirical evidence of Benjamin et al. (2012), our model can explain three out of four possible happiness-utility combinations. Regarding how individuals actually decide, our findings suggest that this is partly random. This explanation accounts for the remaining 11.2 % of individuals.
    Keywords: Consumer Economics, Theory, General Welfare, Well-Being, Micro-Based Behavioral Economics
    JEL: D11 D91 I31
    Date: 2020–01–24
  9. By: Alexandre Chirat (TRIANGLE - Triangle : action, discours, pensée politique et économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Revue des livres Essais critiques : Titre recensé : Branko Milanovic, Capitalism Alone: The Future of the System That Rules the World, Cambridge, MA: Harvard University Press, 2019, 287 pages, ISBN 978-067498759-3 Paru dans : Œconomia [En ligne], 9-4 | 2019, a/7178
    Date: 2019–12–31
  10. By: Jérôme Sgard (Centre de recherches internationales)
    Abstract: On peut voir dans l’Economie classique du développement l’expression d’une époque exceptionnelle, l’après-guerre, saisie dans ses aspirations progressistes les plus vastes, les plus universelles. Paix, prospérité, émancipation nationale, multilatéralisme : ces forces nouvelles se seraient en somme liguées dans ce projet d’un monde meilleur, plus juste et construit grâce à une nouvelle technologie économique. Rarement on a vu s’exprimer de manière aussi puissante l’ancrage de la pensée économique dans les idées de progrès et de raison, et dans une disposition aussi évidemment technocratique...
    Keywords: Amérique latine; vie politique; économie du développement
    Date: 2020–01–30
  11. By: Richard 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); Katia Caldari
    Date: 2019–12–09
  12. By: Richard 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)
    Date: 2019–12–09
  13. By: Lous, Bjorn (Tilburg University, School of Economics and Management)
    Abstract: Even though on average Western countries are richer than ever before, an undercurrent of widespread discomfort and uncertainty has been revealed in recent years. This has led to renewed critical interest in the foundations and assumptions of the capitalist economic model. This thesis focuses on the role of inequality in the functioning of the economy. Specifically, three relationships are investigated. The first empirical chapter sets the general context, looking at the effect of economic freedom on (country-level) life satisfaction through income inequality. The second research chapter analyzes the effect of income inequality on trust and inequality in life satisfaction. The third and fourth chapters zoom in on the microeconomic level, discussing how national income inequality relates to individual life satisfaction, and to individual inclination to trust other people. In addition, the differences between different income groups are investigated, as well as between other socio-demographically defined groups.
    Date: 2020
  14. By: Jacques Fontanel (CESICE - Centre d'études sur la sécurité internationale et les coopérations européennes - UPMF - Université Pierre Mendès France - Grenoble 2 - UGA - Université Grenoble Alpes)
    Abstract: Modern economists do not ask much about the issues of war, even when the economic war is on, as if it were a random external shock that the economic variables used cannot predict. The basic assumption is that market economy and capitalism normally lead to peace. However, the permanence of wars questions and highlights the impotence of the market economy to maintain international peace. Many economists even believe that it creates the conditions for war, with the development of wealth and income inequalities, its mismanagement of climatic and environmental factors, the general exhaustion of arable land or the potential it offers to the most powerful countries with the application of economic wars.
    Abstract: Les économistes modernes s'interrogent peu sur les questions de la guerre, même lorsque la guerre économique est engagée, comme s'il s'agissait d'un choc externe aléatoire que les variables économiques utilisées ne peuvent prévoir. L'hypothèse de base est de considérer que l'économie de marché et le capitalisme conduisent normalement à la paix. Or, la permanence des guerres interrogent et mettent en évidence l'impuissance de l'économie de marché à maintenir la paix internationale. De nombreux économistes pensent même qu'il crée les conditions de la guerre, avec le développement des inégalités patrimoniales et des revenus, sa mauvaise gestion des facteurs climatologiques et environnementaux, l'épuisement généralisée des terres arables ou le potentiel qu'il offre aux économies les plus puissantes avec l'application des guerres économiques.
    Keywords: capitalism,market economy,capitalisme Economic war,économie de marché,paix,guerre,guerre économique,peace,war
    Date: 2019–12–12

This nep-hpe issue is ©2020 by Erik Thomson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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