What is considered deception in experimental economics?

Experimental Economics - In experimental economics there is a norm against using deception. But precisely what constitutes deception is unclear. While there is a consensus view that providing false...     

What is evolutionary about ‘regional systems of innovation’? Implications for regional policy

The literature on Regional Systems of Innovation (RSI) has produced an extensive body of research in recent years and has been used widely as a framework for the design and implementation of policies in a variety of regional contexts. However, certain lack of clarity remains in relation to the defining elements and the dynamics of RSI, which make it difficult to operationalize and to articulate properly the concept for policy purposes. This lack of clarity is motivated by the fact that the concept of RSI is influenced by a number of theories and approaches, in particular institutional, systemic and evolutionary approaches to innovation and learning. As a result of this mix of influences, the concept of RSI derives different and even conflicting theoretical assumptions and policy rationales. The paper advocates a more coherent evolutionary articulation of regional systems and a better understanding of the complexity surrounding policy processes.     

What is extreme about Mises’s extreme apriorism?

There is something extreme about Ludwig von Mises’s methodological apriorism, namely, his epistemological justification of the a priori element(s) of economic theory. His critics have long recognized and attacked the extremeness of Mises’s epistemology of a priori knowledge. However, several of his defenders have neglected what is (and what has long been recognized by his critics to be) extreme about Mises’s apriorism. Thus, the argument is directed less against Mises than against those contributions to the secondary literature that assert his methodological moderation while overlooking what the most prominent critics have found extreme about Mises’s apriorism. Defending Mises as a merely moderate apriorist because he held only a narrow part of the foundation of economics to be a priori is a straw-man defense against criticisms of his apriorism as epistemologically extreme.     

Applying evolutionary methods in economics: progress or pitfall?

The Darwinian theory of evolution has arguably become an important building block for experimental and theoretical economists. According to Burnham (J Econ Behav Org 90:S113–S127, 2013), it is possible to formulate novel hypotheses and predictions about human preferences, on the basis of what patterns of behavior would have been adaptive in the ancestral environment. After clarifying two theoretical concepts, the Adaptively Relevant Environment and fitness maximization, I argue that multiple scientifically plausible hypotheses about human preferences are compatible with evolutionary models that target behavior. Moreover, I propose a refinement of Burnham’s method based on theoretical resources provided by the indirect evolutionary approach. Economists apply or build evolutionary models of their own that target particular features of human psychology and cognition. Such models may reduce the number of plausible hypotheses to allow for rigorous scientific testing in laboratory or field experiments.

     

What can econophysics contribute to financial economics?

Econophysics presents itself as a new paradigm and a new specialty (or even a discipline), using various models and concepts imported from condensed matter and statistical physics to analyze financial phenomena. Financial economics is becoming more and more concerned by the emergence of econophysics because this new field deals with the economic reality. In this perspective, one might ask “What can econophysics contribute to financial economics?” After emphasizing the main differences between financial economics and econophysics, this paper will show that these two disciplines can be complementary. I then provide some research themes from econophysics that could be a source of inspiration for financial economists to broaden their theoretical framework.     

Evolutionary game theory and evolutionary economics: are they different species?

Evolutionary game theory and evolutionary economics seem to inhabit different academic spheres and have little collaboration with one another. Neither side cites much research by the other. Does this de facto academic separation impede fruitful possibilities for mutual inspiration and joint development? This paper addresses this question by considering (1) the different origins and research orientations of the two genres, (2) to what extent evolutionary economists could make use of evolutionary game theory, and (3) what evolutionary game theorists might learn from other, less formal, modes of theorising. The paper concludes that while significant possibilities for collaboration exist, the foremost test is whether they can help enhance our understanding of structures and causal processes in the real world.     

Is novelty always a good thing? Towards an evolutionary welfare economics

Evolutionary economists are increasingly interested in developing policy implications. As a rule, contributions in this field implicitly assume that policy should focus on the encouragement of learning and innovation. We argue that, from an individualistic perspective, this position is not easy to justify. Novelty and evolutionary change have in fact a rather complex normative dimension. In order to cope with this, the evolutionary approach to policy-making needs to be complemented with an account of welfare the background assumptions of which are compatible with an evolutionary world-view. Standard welfare economics is unsuited to the job, since the orthodox way to conceptualize welfare as the satisfaction of given and rational preferences cannot be applied in a world in which preferences tend to be variable and incoherent. We argue that, in order to deal with the specific normative issues brought up in an evolving economy, welfare should be conceptualized in a procedural way: At the individual level, it should be understood as the capacity and motivation to engage in the ongoing learning of instrumentally effective preferences. Evolutionary-naturalistic insights into the way human agents bring about, value, and respond to novelty-induced change turn out to be a valuable input into this extended concept of welfare. Finally, some implications of this concept are explored.     

What is macroeconomic causality?

The paper aims to develop an adequate account of macroeconomic causality. It discusses the definition that is central to Woodward’s interventionist account and the definitions that can be extracted from Hoover’s remarks on privileged parameterization and from the potential outcome approach that Angrist and Kuersteiner have introduced into macroeconomics more recently. The definition to be defended can be regarded as the gist that is common to all three definitions when they are relieved of overly restrictive conditions. It says (roughly) that X causes Y if and only if there is a possible intervention on X that changes Y, where X and Y stand for macroeconomic aggregates, where an intervention is understood as a manipulation of an intervention variable I that satisfies conditions requiring that I be a cause of X, and that there be no confounders of X and Y, and where an intervention variable is either a variable or a parameter.     

How is development economics taught in developing countries?

A survey of instructors and data collected from course syllabi and examinations are used to examine how the subject of development economics is taught at the undergraduate and master's levels in developing countries, compared to undergraduate classes in the United States. Topic coverage, teaching approach, and means of assessment all differ from that in leading U.S. economics departments. Development economics is taught largely as a theoretical subject coupled with case studies in developing countries, with few courses emphasizing use of data or empirical methods. Limited financial resources, the educational level of students, and low involvement of instructors in research are considered as explanations for the way the subject is taught in developing countries. The authors conclude with suggestions for improving teaching of development economics.     

Confucian economics: how is Chinese thinking different?

The Chinese have their economics. Not yet acknowledged, it is contained in the Confucian thought. Called by me ‘Confucian economics’, it sharply differs from the Western ‘Liberal economics’. Individuals seek posterity through offspring, rather than ‘instant gratification’. Resources are not seen as scarce but as abundant. Rather than take resources from others, people work to make a living. The work ethics and not the profit margin is a key motive. Individuals work not for themselves but for their family. The family is a source of moral sentiment, understood as responsibility for others. This is why the main institution is family and not market. To Confucians, the key principle is equality, which precedes efficiency. Inequality upsets ‘social peace’, as a precondition for growth. Built on Liberal principles, the Western capitalist system is a market one. The Chinese system, which I call ‘Confucian system’, is also market-based. The former is a ‘free market’ animated by individuals, the latter is a ‘familial market’ built around households. Both approaches advocate ‘minimal state’, but for Liberals the state is a ‘night watchman’ to ensure the security of resources, while for Confucians, the state is a moral guide to enable social harmony. As a theory, Confucian economics is a form of ethics and the Liberal is not. China has never abandoned Confucianism. The recent reforms are not about rolling back the Soviet model to establish a capitalist system. Relying on Confucian economics, China is reviving Confucian system. Paradoxically, the ancient Confucian economics has become the engine of China’s modernity. This is a key reason for China’s ‘longest boom’. To extend it, China needs to refocus its policies from ‘capital formation’ to the ‘moral cultivation’, along the Confucian principles.     

What is a farecard worth?

In this paper wer use the duality approach to demand theory to evaluate the value to a consumer of a farecard which allows travel at zero marginal pecuniary cost. The analysis is extended to networks with two modes of travel (bus and underground).Illustrative figures are calculated for farecards on the London Transport network.     

Flunking economics?

Economists are in revolt over President Clinton's health care reform proposal. Many contend that the Administration is abandoning free-market principles and embracing price controls that could have disastrous consequences. But others argue that traditional rules of supply and demand don't apply to the health care sector.     

What do Russians think about transition?1

We use data from the 2006 round of the Russian Longitudinal Monitoring Survey to describe perceptions of the Russian population about the transition process and the role of the state compared with that of free markets. We find that about one‐half of the Russian population is disappointed with transition and a large majority is in favour of high state regulation and state provision of goods and services. High demand for government regulation and increased state intervention coexists with a low level of trust in government institutions and recognition of high and rising levels of corruption. The findings are consistent with the theory developed by Aghion et al. (2009) . In an environment with poor social capital, private business imposes negative externalities on the society and society chooses to demand more state regulation and tolerate corruption to reduce these externalities. We also find that individual perceptions of social capital and corruption co‐vary with the demand for regulation, as predicted by the theory.     

The history of economics as economics?

Abstract

This paper critically evaluates the current decline of the relationship between economics and the history of economics, and proposes a framework called the panorama-cum-scenario model for the practice of the history of economics. Starting with the Hegelian thesis that the history of economics is economics itself, the paper argues that such a relationship is necessary but not sufficient because the history of economics is a metatheory addressed to economic theory. The history of economics needs a panoramic view of the subject and a scenario for the construction, interpretation, and evaluation of the system of economics. The panorama-cum-scenario model enables us to work on the history of economics not only by historical and rational reconstruction but also by global reconstruction. Nietzsche's anti-Hegelian viewpoint and Heidegger's hermeneutical standpoint are useful for identifying the role of historical research in developing economic knowledge based on the panorama-cum-scenario model. Several approaches to the history of economics are examined in light of the panorama-cum-scenario model. Schumpeter's history of economics is interpreted as an example of the panorama-cum-scenario model.     

The micro-geography of academic research: How distinctive is economics?

This study examines micro-geographic clustering in the production and recognition of academic research. Three U.S. ZIP codes are associated with over 40 percent of articles in the top five economics journals and those articles garnered one-half of all citations in these journals from 2000 to 2015. Such micro-geographic concentration is not apparent in other disciplines, even those like chemistry that rely on specialized laboratories. Concentration of citations to economics articles whose authors are associated with a few key ZIP codes has strengthened over time, even as it has weakened for other disciplines. This micro-geographic concentration may increase systemic risk by reducing the diversity of economics research that is published and cited and may lead to insufficient research attention to local context.     

What is an Australian Job Worth?

The value of a job is an important issue for management, human resources, law and public policy, yet we lack good empirical estimates of this value. This article presents a theoretical framework for valuing jobs and estimates the average economic value of an Australian job at approximately $104,000. However, judges awarding compensation for unfair dismissal under the Fair Work Act implicitly value a job at around $10,000. If the economic value estimate is correct then workers place a high value on keeping their job, which has important human resources management implications, such as worker commitment and risk-taking.