The new institutional economics offers one of the most exciting research agendas in economics tod... more The new institutional economics offers one of the most exciting research agendas in economics today. Yet can it really explain processes of economic change? Economic Evolution explores three of the main approaches within the new institutional economics: * the new theory of ...
ABSTRACT The serious side of the Economics Made Fun genre stems from its mantra that people respo... more ABSTRACT The serious side of the Economics Made Fun genre stems from its mantra that people respond to incentives. As Levitt and Dubner put it, economists typically believe they can solve virtually all problems by designing a proper incentive scheme. What is not always sufficiently appreciated is that Levitt and Dubner argue that economists nowadays grant the existence of social and moral incentives, besides the standard economic ones. A glance at the relevant literature in academic economics confirms this. Although there is an ongoing debate in academic economics about the necessity and desirability of introducing social preferences in utility functions and also about the relative strengths of various sorts of preferences, economists increasingly take the existence of various sorts of incentives and motivations into account. The recognition of non-monetary incentives and of non-economic motivation makes the economic approach to policy making more comprehensive and flexible. But since there might be various kinds of interaction effects between different sorts of incentives and different sorts of motivations, it also vastly complicates devising optimal policy schemes. What Levitt and Dubner say almost in passing about the “strange nature” of incentives also reflects the present state of art in academic economics: while it is increasingly acknowledged that different sorts of incentives and different sorts of motivations might interact in various ways, little is still known about when, under what conditions, the one or the other interaction effect obtains. Yet knowledge of the latter is required to devise optimal incentive schemes. Thus even though Levitt and Dubner might be right that economists are quite confident that they can solve virtually all problems by devising optimal incentive schemes, it seems the limited understanding of incentives, motivations and their various interaction effects in present-day academic economics falls short of bolstering this confidence.
indeterminacy in the concept of voluntariness, the only way to proceed is to consider the plausib... more indeterminacy in the concept of voluntariness, the only way to proceed is to consider the plausibility of claims such as this: Where A agrees to transfer property to B and B has acted within his rights during the transaction, the transfer preserves justice. Or this: Where A agrees to transfer property to B and A’s assent is not given because there is no acceptable alternative, the transfer preserves justice. Spell them out, and neither proposition seems remotely plausible to me, but that’s because I believe that the law of property and its transfer is but one important part of the entire legal and economic institutional scheme, and that different possible total schemes should be evaluated instrumentally, by looking at the outcomes they produce. Be that as it may, the real contribution of the second half of Liberty, desert and the market is not to provide a correct account of the concept of voluntariness and draw normative conclusions from that. Rather it is a contribution to the critique of libertarian ideology, which has so far mostly focused on the use of the rhetoric of freedom and ownership. Olsaretti highlights the crucial role of the idea of voluntariness – as the key to the libertarian ‘principle of justice in transfer’ – and shows that the libertarian interpretation of this notion is not irresistible, and that libertarians therefore cannot help themselves to the plausible sounding rhetoric about the free market being just in virtue of being the domain of voluntary exchange.
Darwinism and Evolutionary Economics brings together contributions from eminent authors who, buil... more Darwinism and Evolutionary Economics brings together contributions from eminent authors who, building on Darwin’s own insights and on developments in evolutionary theory, offer challenging views on how economics can use evolutionary ideas effectively.
Page 132. Taking evolution seriously: what difference does it make for economics? Jack J. Vromen ... more Page 132. Taking evolution seriously: what difference does it make for economics? Jack J. Vromen Introduction The issue what relevance (if any) the theme of evolution has for economics can be tackled from several vantage points. ...
The publication of Robert Sugden’s The Community of Advantage in 2018 might very well turn out to... more The publication of Robert Sugden’s The Community of Advantage in 2018 might very well turn out to be a landmark event in welfare economics. In the book, Sugden presents a highly original view on what the main lessons of behavioral economics should be for welfare analyses; a view that radically deviates from the libertarian paternalism underlying the Nudge literature and other views that have been put forward in behavioral welfare economics. All the prevailing versions of behavioral welfare economics somehow want to retain the normative authority of individuals’ preferences (or of a proper subset of individuals’ preferences; preferences that are not clearly flawed by cognitive errors and mistakes). As Sugden cogently argues, the evidence gathered in behavioral economics fails to sustain this deference to preferences. With his own opportunity criterion, Sugden proposes a break with this long-lived tradition in welfare economics. The radicality of Sugden’s view goes beyond this as he argues that the addressee of welfare analysis should not be a fictitious benevolent social planner, but rather citizens, as potential parties to mutually beneficial agreements. We are happy to present this Review Symposium issue on The Community of Advantage in which prominent scholars, all with different outlooks and predilections, comment on the book, prompting Sugden to clarify and sharpen his own views. We want to thank Douglas Bernheim, Geoffrey Brennan, Malte Dold, Hartmut Kliemt, Mozaffar Quizilbash, Mario Rizzo, Cass Sunstein, Johanna Thoma and Robert Sugden for their fine work. Many thanks also to our reviewers for their contribution. Our greatest gratitude goes to Constanze Binder, the guest editor of this Review Symposium. Without her relentless efforts, this issue would not have seen the light. What is more, Constanze’s meticulous comments on earlier drafts of the articles published in this issue surely helped in improving their focus and clarity. Sadly, personal circumstances prevented her from finishing her own contribution in time. We hope that she will publish her own contribution soon and shed her own light on The Community of Advantage.
In The Darwin Economy: Liberty, Competition, and the Common Good Robert H. Frank practices what h... more In The Darwin Economy: Liberty, Competition, and the Common Good Robert H. Frank practices what he preaches. Starting with just a handful of simple basic principles, he is not only able to shed an interesting new light on some of society’s most pressing problems, but also to propose (at least to some) contrarian solutions for them. Frank arrives at his analyses and his solutions not by exploring the properties of mathematical models but by cogent informal reasoning. This approach is exactly ...
This book is based on the premise that mainstream economics has become excessively specialized an... more This book is based on the premise that mainstream economics has become excessively specialized and formalized, entering a state of de facto withdrawal from the study of the economy in favour of exercises in applied mathematics. The editors believe that there is much scope for synergies by engaging in an encounter with economics and the other social sciences. The chapters in this book offer important new contributions to such a development.
The new institutional economics offers one of the most exciting research agendas in economics tod... more The new institutional economics offers one of the most exciting research agendas in economics today. Yet can it really explain processes of economic change? Economic Evolution explores three of the main approaches within the new institutional economics: * the new theory of ...
ABSTRACT The serious side of the Economics Made Fun genre stems from its mantra that people respo... more ABSTRACT The serious side of the Economics Made Fun genre stems from its mantra that people respond to incentives. As Levitt and Dubner put it, economists typically believe they can solve virtually all problems by designing a proper incentive scheme. What is not always sufficiently appreciated is that Levitt and Dubner argue that economists nowadays grant the existence of social and moral incentives, besides the standard economic ones. A glance at the relevant literature in academic economics confirms this. Although there is an ongoing debate in academic economics about the necessity and desirability of introducing social preferences in utility functions and also about the relative strengths of various sorts of preferences, economists increasingly take the existence of various sorts of incentives and motivations into account. The recognition of non-monetary incentives and of non-economic motivation makes the economic approach to policy making more comprehensive and flexible. But since there might be various kinds of interaction effects between different sorts of incentives and different sorts of motivations, it also vastly complicates devising optimal policy schemes. What Levitt and Dubner say almost in passing about the “strange nature” of incentives also reflects the present state of art in academic economics: while it is increasingly acknowledged that different sorts of incentives and different sorts of motivations might interact in various ways, little is still known about when, under what conditions, the one or the other interaction effect obtains. Yet knowledge of the latter is required to devise optimal incentive schemes. Thus even though Levitt and Dubner might be right that economists are quite confident that they can solve virtually all problems by devising optimal incentive schemes, it seems the limited understanding of incentives, motivations and their various interaction effects in present-day academic economics falls short of bolstering this confidence.
indeterminacy in the concept of voluntariness, the only way to proceed is to consider the plausib... more indeterminacy in the concept of voluntariness, the only way to proceed is to consider the plausibility of claims such as this: Where A agrees to transfer property to B and B has acted within his rights during the transaction, the transfer preserves justice. Or this: Where A agrees to transfer property to B and A’s assent is not given because there is no acceptable alternative, the transfer preserves justice. Spell them out, and neither proposition seems remotely plausible to me, but that’s because I believe that the law of property and its transfer is but one important part of the entire legal and economic institutional scheme, and that different possible total schemes should be evaluated instrumentally, by looking at the outcomes they produce. Be that as it may, the real contribution of the second half of Liberty, desert and the market is not to provide a correct account of the concept of voluntariness and draw normative conclusions from that. Rather it is a contribution to the critique of libertarian ideology, which has so far mostly focused on the use of the rhetoric of freedom and ownership. Olsaretti highlights the crucial role of the idea of voluntariness – as the key to the libertarian ‘principle of justice in transfer’ – and shows that the libertarian interpretation of this notion is not irresistible, and that libertarians therefore cannot help themselves to the plausible sounding rhetoric about the free market being just in virtue of being the domain of voluntary exchange.
Darwinism and Evolutionary Economics brings together contributions from eminent authors who, buil... more Darwinism and Evolutionary Economics brings together contributions from eminent authors who, building on Darwin’s own insights and on developments in evolutionary theory, offer challenging views on how economics can use evolutionary ideas effectively.
Page 132. Taking evolution seriously: what difference does it make for economics? Jack J. Vromen ... more Page 132. Taking evolution seriously: what difference does it make for economics? Jack J. Vromen Introduction The issue what relevance (if any) the theme of evolution has for economics can be tackled from several vantage points. ...
The publication of Robert Sugden’s The Community of Advantage in 2018 might very well turn out to... more The publication of Robert Sugden’s The Community of Advantage in 2018 might very well turn out to be a landmark event in welfare economics. In the book, Sugden presents a highly original view on what the main lessons of behavioral economics should be for welfare analyses; a view that radically deviates from the libertarian paternalism underlying the Nudge literature and other views that have been put forward in behavioral welfare economics. All the prevailing versions of behavioral welfare economics somehow want to retain the normative authority of individuals’ preferences (or of a proper subset of individuals’ preferences; preferences that are not clearly flawed by cognitive errors and mistakes). As Sugden cogently argues, the evidence gathered in behavioral economics fails to sustain this deference to preferences. With his own opportunity criterion, Sugden proposes a break with this long-lived tradition in welfare economics. The radicality of Sugden’s view goes beyond this as he argues that the addressee of welfare analysis should not be a fictitious benevolent social planner, but rather citizens, as potential parties to mutually beneficial agreements. We are happy to present this Review Symposium issue on The Community of Advantage in which prominent scholars, all with different outlooks and predilections, comment on the book, prompting Sugden to clarify and sharpen his own views. We want to thank Douglas Bernheim, Geoffrey Brennan, Malte Dold, Hartmut Kliemt, Mozaffar Quizilbash, Mario Rizzo, Cass Sunstein, Johanna Thoma and Robert Sugden for their fine work. Many thanks also to our reviewers for their contribution. Our greatest gratitude goes to Constanze Binder, the guest editor of this Review Symposium. Without her relentless efforts, this issue would not have seen the light. What is more, Constanze’s meticulous comments on earlier drafts of the articles published in this issue surely helped in improving their focus and clarity. Sadly, personal circumstances prevented her from finishing her own contribution in time. We hope that she will publish her own contribution soon and shed her own light on The Community of Advantage.
In The Darwin Economy: Liberty, Competition, and the Common Good Robert H. Frank practices what h... more In The Darwin Economy: Liberty, Competition, and the Common Good Robert H. Frank practices what he preaches. Starting with just a handful of simple basic principles, he is not only able to shed an interesting new light on some of society’s most pressing problems, but also to propose (at least to some) contrarian solutions for them. Frank arrives at his analyses and his solutions not by exploring the properties of mathematical models but by cogent informal reasoning. This approach is exactly ...
This book is based on the premise that mainstream economics has become excessively specialized an... more This book is based on the premise that mainstream economics has become excessively specialized and formalized, entering a state of de facto withdrawal from the study of the economy in favour of exercises in applied mathematics. The editors believe that there is much scope for synergies by engaging in an encounter with economics and the other social sciences. The chapters in this book offer important new contributions to such a development.
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