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on History and Philosophy of Economics |
| By: | Rossi, Enrico |
| Abstract: | In the last two decades, a renewed interest in property rights have challenged the accepted interpretation of property rights as “bundle of rights” over the use of things and have rehabilitated the old classical interpretation of property rights as exclusive (absolute) dominium over things rooted in the right to exclude. This paper provides a three-dimensional framework for the study of property rights and shows that, historically, the reason for this dual nature of property rights derives from the fact that properties can either be treated as personal property, or capital. While the classical approach is consistent with the former interpretation, the neoclassical (“bundle of right”) approach is consistent with the latter. By reinterpreting the dual nature of property rights as a dichotomy between capital and personal property the work makes two main contributions to the debates in the legal and economic literature. First, it re-evaluates and justifies the interpretation of property rights as a “politically-embedded” bundle of right provided by legal realist, old progressive and institutional economists at the turn of the twentieth century. Second, it reassesses the conclusions reached by the Coasean legacy in law and economics; the paper shows that transaction costs are necessary and sufficient to explain the emergence and the form of legal institutions only in pure capitalistic societies, but cannot explain the emergence and the nature of legal institutions whenever personal properties are involved. Additional normative assumptions explaining the origin and the legitimacy of value judgments are needed to understand and explain the dual nature of property rights and to make sense of the decisions to employ personal properties as capital (or vice versa). This highlights the often neglected (but decisive) role played by the rationality assumption in legitimizing the normative conclusions reached by Coasean law and economics (and welfare economics more generally). It also highlights that the normative power of transaction costs is always institution determined (socially-embedded), never institution-determining |
| Keywords: | property rights; capital; personal property; possession |
| JEL: | J1 R14 J01 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105840&r=all |
| By: | Ignazio Visco (Bank of Italy); Giordano Zevi (Bank of Italy) |
| Abstract: | Starting from Simon’s bounded rationality notion, in this study we consider some of the links between concepts of bounded rationality and the approaches followed by economists in their analysis of the role played by economic agents’ expectations in driving the evolution of the economy through time. We argue that the degree of attention devoted to the formation of expectations by the macroeconomic theory has followed high and low cycles. In recent years, the increasing availability of survey data and the failings of models based on purely rational representative agents have prompted renewed interest in inquiries into the direct measurement of expectations and empirical studies of their formation. The intellectual legacy of Herbert Simon provides a useful guide for both these activities. |
| Keywords: | bounded rationality, expectations, Herbert Simon |
| JEL: | B3 D80 D9 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_575_20&r=all |
| By: | Sacha Bourgeois-Gironde (Laboratory of modern economics - UP2 - Université Panthéon-Assas); Alda Mari (IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Philosophie - ENS Paris - ENS Paris - École normale supérieure - Paris); David Nicolas (IJN - Institut Jean-Nicod - DEC - Département d'Etudes Cognitives - ENS Paris - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - Département de Philosophie - ENS Paris - ENS Paris - École normale supérieure - Paris); David Blunier |
| Abstract: | This paper explores the impact of language on behaviour studying the impact of mood in a probabilistic choice context. Building on the idea of "aversion to ambiguity" according to which subjects prefer situations in which probabilities are known over those in which they are not known, we have systematically tested the association of sentence mood with choice situations. We found that with indicative the aversion to ambiguity is confirmed, whereas with the subjunctive, it is not. This indicates that grammatical features can influence the way in which subjects apprehend choices in probabilistic contexts. Goal While modern economic theories have soundly established a connection between economic behavior and psychology, there is a new and growing interest in the connection between language and behavior. This paper studies one aspect of this connection by addressing choices in probabilistic contexts. Specifically, we study how the verbalization of mental states accompanying choices in probabilistic contexts can modify what psychology based economic theories have labelled as the "standard" behavior. We show here that certain grammaticalized features of natural language can impact the expectations solely based on psychological considerations. |
| Keywords: | subjunctive,mood,decision theory,language,ambiguity,risk |
| Date: | 2019–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02869834&r=all |
| By: | Maurice Obstfeld (Peterson Institute for International Economics) |
| Abstract: | Fifty years ago, Harry G. Johnson published "The Case for Flexible Exchange Rates, 1969," its title echoing Milton Friedman’s classic essay of 1953. Though somewhat overlooked today, Johnson’s reprise was an important element in the late 1960s debate over the future of the international monetary system. In this Working Paper, Obstfeld lays out the historical context in which Johnson’s “Case†was written and read and then examines Johnson’s main points and sees how they stand up to nearly five decades of experience with floating exchange rates since the end of the Bretton Woods system. He also reviews the most recent academic critiques of exchange rate flexibility and asks how fatal they are to Johnson’s basic argument. He concludes that the essential case for exchange rate flexibility still stands strong. |
| Keywords: | Monetary policy, natural rate of interest, Phillips curve, current account, capital flows, policy spillbacks |
| JEL: | E52 F32 F41 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp20-12&r=all |
| By: | Kabeer, Naila |
| Abstract: | The 2019 Nobel Prize in economics was awarded to three scholars on the grounds that their pioneering use of randomized control trials (RCTs) was innovative methodologically and contributed to development policy and the emergence of a new development economics. Using a critical feminist lens, this article challenges that conclusion by interrogating the storytelling practices deployed by “randomista” economists through a critical reading of a widely cited essay by Esther Duflo, one of the 2019 Nobel recipients, on the relationship between women’s empowerment and economic development. The paper argues that the limitations of randomista economics have given rise to a particular way of thinking characterized by piecemeal analysis, ad hoc resort to theory, indifference to history and context, and methodological fundamentalism. It concludes that the randomista argument that broad-based economic development alone–without focused attention to women’s rights–will lead to gender equality has not been borne out by recent data. HIGHLIGHTS Despite claims of impartiality, Duflo’s interpretations of evidence and the language she uses indicate that the randomista method and narrative is not objective or impartial. The randomistas’ treatment of preferences as random and idiosyncratic ignores what feminists have long espoused: that the formation of preferences derives from entrenched social constructions. The randomistas' claims to methodological superiority result in a discounting or dismissal of findings from nonexperimental studies in favor of experimental studies that report the same findings. Duflo's main argument discussed in this paper is that while gender equality is desirable in its own right, it is better achieved through gender-neutral policies because gender-affirmative policies “distort” the allocative process and lead to efficiency costs. Yet, these so-called distortions stem from historical structures that have curtailed women's productive potential and protected male privilege. In other words, patriarchal discrimination introduces structural costs that are unlikely to be visible when the focus is on individual economic actors. |
| Keywords: | development; economic development; Empowerment |
| JEL: | O10 |
| Date: | 2020–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:104600&r=all |
| By: | Johannes Becker; Daniel Hopp; Karolin Süß |
| Abstract: | Indirect reciprocity is defined as a specific kind of behavior: An agent rewards or penalizes another agent for having behaved kindly or unkindly toward a third party. This paper analyzes the question of what drives indirect reciprocity: Does the agent reward or penalize because she (altruistically) cares for the third party? Or does she take the other agent’s behavior as a signal of how the latter would treat her if they met? In order to measure the relative importance of the altruism motive versus the signaling motive, we consider a gift-exchange game with three players: an employer pays wages to a worker and a coworker, before the worker (but not the coworker) may reciprocate by exerting effort. We offer a theoretical framework to analyze both motives for indirect reciprocity and run a series of lab experiments. The treatments manipulate the worker’s information on wages. We find that, if only the coworker’s wage is observable, the worker’s effort increases in the coworker’s wage. In contrast, if the worker can observe her own wage, the coworker’s wage does not affect worker effort at all. We interpret this as support for the signaling motive: Indirect reciprocity is rather a byproduct of direct reciprocity than an act of altruism. |
| Keywords: | gift-exchange, indirect reciprocity, signaling |
| JEL: | A13 C92 D91 J31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8423&r=all |
| By: | Simone Cerreia-Vioglio; Fabio Maccheroni; Massimo Marinacci; Aldo Rustichini |
| Abstract: | We prove that a random choice rule satisfies Luce's Choice Axiom if and only if its support, the set of "alternatives that can be chosen," is a choice correspondence that satisfies the Weak Axiom of Revealed Preference, and random choice occurs according to a stochastic tie breaking among optimizers that satisfies Renyi's Conditioning Axiom. Our result shows that the Choice Axiom is, in a precise formal sense, a probabilistic version of the Weak Axiom. It thus supports Luce's view of his own axiom as a "canon of probabilistic rationality." |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2007.11386&r=all |
| By: | Rapanos, Theodoros; Sommer, Marc; Zenou, Yves |
| Abstract: | We develop a simple Bayesian network game in which players, embedded in a network of social interactions, bear a cost from deviating from the social norm of their peers. All agents face uncertainty about the private benefits and the private and social costs of their actions. We prove the existence and uniqueness of a Bayesian Nash equilibrium and characterize players' optimal actions. We then show that denser networks do not necessary increase agents' actions and welfare. We also find that, in some cases, it is optimal for the planner to affect the payoffs of selected individuals rather than all agents in the network. We finally show that having more information is not always beneficial to agents and can, in fact, reduce their welfare. We illustrate all our results in the context of criminal networks in which offenders do not know with certitude the probability of being caught and do not want to be different from their peers in terms of criminal activities. |
| Keywords: | Bayesian games; beliefs; Conformism; crime; networks; value of information |
| JEL: | C72 D82 D85 K42 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14087&r=all |
| By: | Olivier Rocca (SCD-BU UNS - Bibliothèques universitaires de l'université Nice Sophia Antipolis - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019), AMU DSP - Aix-Marseille Université - Faculté de droit et de science politique - AMU - Aix Marseille Université) |
| Abstract: | Nous vivons encore aujourd'hui dans l'héritage juridique et économique d'une conception du travail datant du XIX ème siècle où se mêlent conceptions marxistes et capitalistes, le tout sous tendu par des courants à la fois fortement libéraux et conservateurs. Il convient de sortir de ces conceptions obsolètes et souvent désespérées de la notion de travail afin de rétablir une vision claire et heureuse de cette notion qui soit à la hauteur des enjeux de notre époque. Que l'on parle du marché du travail ou de la dimension philosophique de la production, il semble que la notion de travail demeure encore une grande inconnue. Elle s'inscrit pourtant dans des cadres comptables très précis qui en déterminent le sens et la valeur de la façon la plus concrète et la plus influente pour l'existence de millions d'hommes et de femmes: Interroger les définitions comptables qui fondent le travail en pratique nous permettra de remonter vers des questions plus générales et de proposer une réflexion sur les dimensions multiples du travail tenant compte de la société du numérique, de l'intelligence artificielle et des nouvelles technologies qui redessinent totalement l'idée du travail et de ses implications. |
| Keywords: | travail,rendement,comptabilité,résultat,productivité |
| Date: | 2020–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02896922&r=all |
| By: | Sascha O. Becker; Jared Rubin; Ludger Woessmann |
| Abstract: | This paper surveys the recent social science literature on religion in economic history, covering both socioeconomic causes and consequences of religion. Following the rapidly growing literature, it focuses on the three main monotheisms—Judaism, Christianity, and Islam—and on the period up to WWII. Works on Judaism address Jewish occupational specialization, human capital, emancipation, and the causes and consequences of Jewish persecution. One set of papers on Christianity studies the role of the Catholic Church in European economic history since the medieval period. Taking advantage of newly digitized data and advanced econometric techniques, the voluminous literature on the Protestant Reformation studies its socioeconomic causes as well as its consequences for human capital, secularization, political change, technology diffusion, and social outcomes. Works on missionaries show that early access to Christian missions still has political, educational, and economic consequences in present-day Africa, Asia, and Latin America. Much of the economics of Islam focuses on the role that Islam and Islamic institutions played in political-economy outcomes and in the “long divergence” between the Middle East and Western Europe. Finally, cross-country analyses seek to understand the broader determinants of religious practice and its various effects across the world. We highlight three general insights that emerge from this literature. First, the monotheistic character of the Abrahamic religions facilitated a close historical interconnection of religion with political power and conflict. Second, human capital often played a leading role in the interconnection between religion and economic history. Third, many socioeconomic factors matter in the historical development of religions. |
| Keywords: | religion, economic history, Judaism, Christianity, Islam, economic development, education, persecution, political economy, finance, specialization, trade |
| JEL: | Z12 N00 J15 I25 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8365&r=all |
| By: | Danae Arroyos-Calvera (University of Birmingham); Rebecca McDonald (University of Birmingham); Daniel Read (University of Warwick); Bruce Rigal (St Mary's University) |
| Abstract: | It has been suggested that avoiding information provides people with moral wiggle room to behave less pro-socially. In a novel dictator game context we unpack the effect of moral wiggle room along two dimensions: whether information is hidden from the recipient or the dictator; and whether generosity is influenced by the information condition, or whether, instead, less generous types self-select into hidden information states. Participants (n=1,360) play a lottery dictator game with three treatments differing in who knows and does not know the endowment (the information state) and - importantly - whether the information state is exogenously or endogenously determined. We found that it was the information state dictators preferred, not the information state they eventually received, that could predict generosity. Dictators who preferred to hide information from the recipient were the least likely to make a generous transfer, and those who preferred to hide information from themselves were more likely to make a generous transfer. |
| Keywords: | Self-image; Social-image; Self-Selection; Moral Wiggle Room; Information. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:20-19&r=all |
| By: | Benjamin Enke; Ricardo Rodríguez-Padilla; Florian Zimmermann |
| Abstract: | Throughout the Western world, people's policy views are correlated across domains in a strikingly similar fashion. This paper proposes that what partly explains the structure of ideology is moral universalism: the extent to which people's altruism and trust remain constant as social distance increases. In new large-scale multinational surveys, heterogeneity in universalism descriptively explains why the left and right both simultaneously support and oppose different types of government spending. Moreover, the left-right divide on topics such as redistribution strongly depends on whether people evaluate more or less universalist policies. Large-scale donation data provide additional evidence for the political left's universalism. |
| JEL: | D01 D72 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27511&r=all |
| By: | Felix Kersting; Iris Wohnsiedler; Nikolaus Wolf |
| Abstract: | We revisit Max Weber’s hypothesis on the role of Protestantism for economic development. We show that nationalism is crucial to both, the interpretation of Weber’s Protestant Ethic and empirical tests thereof. For late nineteenth-century Prussia we reject Weber’s suggestion that Protestantism mattered due to an “ascetic compulsion to save”. Moreover, we find that income levels, savings, and literacy rates differed be-tween Germans and Poles, not between Protestants and Catholics, using pooled OLS and IV regressions. We suggest that this result is due to anti-Polish discrimination. |
| Keywords: | Max Weber, protestantism, nationalism |
| JEL: | N13 N33 O16 Z12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8421&r=all |