Political economy and the ‘modern view’ as reflected in the history of economic thought

This paper focuses on the transition from classical political economy to ‘modern’ economics, a central aspect of which is the ascent of the conception of ‘theory’ as a mere instrument of research. We analyse how this transitional phase was perceived and interpreted in representative, more or less contemporaneous histories of economic thought: those by Luigi Cossa in 1880, by John Kells Ingram in 1915 (originally published in 1888), and by Charles Gide and Charles Rist in 1915. Despite their differences, all authors share the same conception of the structure of scientific laws, as well as the view that economics must be separated from liberalism.     

Human capital and sustainable competitive advantage: an analysis of the relationship between training and performance

This article analyses the importance of training as a creator of human capital, which enables a company to obtain competitive advantages that are sustainable in the long-term that result in greater profitability. The study is based on the general theoretical framework of resource and capacity theory. The study not only analyses the impact of the influence of training on performance; it also attempts to analyse the nature of such a relationship in greater depth. This being the case, an attempt has been made to measure explanatory capacity from two different perspectives: the universalistic approach and the contingent approach. At the outset, two hypotheses are formulated that attempt to quantify the relationship from a universalistic perspective to later, in two more hypotheses, incorporate the potential moderating effect of the strategy into the model, in order to verify whether or not this strategy improves the explanatory power of our model of analysis.

Existence of equilibrium in common agency games with adverse selection

We establish the existence of subgame perfect equilibria in general menu games, known to be sufficient to analyze common agency problems. Our main result states that every menu game satisfying enough continuity properties has a subgame perfect equilibrium. Despite the continuity assumptions that we make, discontinuities naturally arise due to the absence, in general, of continuous optimal choices for the agent. Our approach, then, is based on (and generalizes) the existence theorem of [Simon, L., Zame, W., 1990. Discontinuous games and endogenous sharing rules. Econometrica 58 (4), 861–872] designed for discontinuous games.     

Verdoorn’s law and productivity dynamics: An empirical investigation into the demand and supply approaches

According to Verdoorn’s law, productivity growth is endogenous to output growth, due to the existence of increasing returns to scale, broadly defined. Such an idea is at the root of both the endogenous growth theory and the Kaldorian approach. While in Kaldor’s view, a country’s growth is demand-driven, in the endogenous growth theory, growth is determined by the growth of the factors of production and hence growth is supply-constrained. This article empirically tests both assumptions for Verdoorn’s law by using a dynamic panel of manufacturing industries for seventy countries at different stages of development for the years between 1963 and 2009. In order to distinguish between these approaches, two different specifications are estimated where the growth of output and the supply of factors of production are instrumentalized by system generalized method of moments (GMM)estimators. The results show that, if it is assumed that the growth rates of countries are demand-driven, a faster growth of output increases productivity growth due to the existence of increasing returns. Alternatively, if it is assumed that output growth is driven by the growth of the supply of the factors of production, it is not possible to conclude that productivity growth is induced by output growth.     

Using mean-Gini and stochastic dominance to choose project portfolios with parameter uncertainty

Although a variety of models have been studied for project portfolio selection, many organizations still struggle to choose a potentially diverse range of projects while ensuring the most beneficial results. The use of the mean-Gini framework and stochastic dominance to select portfolios of research and development (R&D) projects has been gaining attention in the literature despite the fact that such approaches do not consider uncertainty regarding the projects’ parameters. This article discusses, with relation to project portfolio selection through a mean-Gini approach and stochastic dominance, the impact of uncertainty on project parameters. In the process, Monte Carlo simulation is considered in evaluating the impact of parametric uncertainty on project selection. The results show that the influence of uncertainty is significant enough to mislead managers. A more robust selection policy using the mean-Gini approach and Monte Carlo simulation is proposed.     

Agribusiness,Peasant Agriculture and Labour Markets: Ecuador in Comparative Perspective

The consolidation of capitalist agriculture in countries such as Ecuador has led to a recent revaluation of territories (central highlands) where cheap labour has facilitated agribusiness development linked to the world market. This process generates growth in the numbers of rural wage workers and the creation of a labour market that, in relation to others in several Latin American countries, has certain particularities: permanent jobs, gender balance, an absence of intermediaries and low levels of precariousness. Small‐scale peasant producers are marginalized in this context and play functional roles within the current dynamics of agribusiness firms. The organizational weakness of rural wage earners and the pursuit of clientelist relationships by firms do not allow rural workers and local communities to devise economic and social strategies that might improve their position in this ‘field of forces’ in the territory.     

Insights into carsharing demand dynamics: Outputs of an agent-based model application to Lisbon,Portugal

Two important claims for carsharing systems are their increased flexibility and potential contribution to reducing transport externalities such as pollution. Carsharing typically involves a fleet of vehicles in stations around a city that clients may use on an hourly-payment basis. Classical round-trip systems address a niche market of shopping and errand trips. However, a growing market is now arising providing one-way trips to clients. Great uncertainty remains on the economic viability of this type of carsharing given the complex relation between supply and demand, and how this may influence the level of service provided. Realistic modeling tools that include both supply and demand characterization and allow testing several carsharing operational parameters are scarce. In this sense, a detailed agent-based model was developed to simulate one-way carsharing systems. The simulation incorporates a stochastic demand model discretized in time and space and a detailed environment characterization with realistic travel times. The operation includes maintenance operations, relocations and reservations. The model was applied to the case-study city of Lisbon. Our results show that comparing to other modes, carsharing performs worse than private cars both in terms of time and cost. Nevertheless, it clearly outperforms taxis in terms of cost, and outperforms buses, metro and walking in terms of travel time. The competitiveness of carsharing is highly determined by trip length, becoming more competitive than other modes (travel-time wise) as trips become longer. The operational policies as car-fleet relocation and car reservation showed significant effects in enhancing profit while preserving good customers' satisfaction.     

Portfolio optimization through Kriging methods

This article presents a new methodology for optimizing financial asset portfolios. The proposed methodology, based on the Kriging method, allows for approximating the risk surface – and thus the optimal solution to the problem – in a generalized fashion, relaxing every restrictive hypothesis inherent to the available methods and with the ability to estimate the error in the risk surface approximation. Illustratively, the proposed methodology is applied to the portfolio problem with the Variance, VaR and CVaR as objective functions. The results are compared to those obtained using the Khun–Tucker technique, for the former, and the Rockafellar method, for the latter.     

Symposium on: Existence of Nash equilibria in discontinuous games

This paper introduces the symposium on existence of Nash equilibria in discontinuous games.