Economic Theory Commons^™

When Do Security Markets Aggregate Dispersed Information?, Brice Corgnet, Cary Deck, Mark Desantis, Kyle Hampton, Erik O. Kimbrough

ESI Publications

We attempt to replicate a seminal paper that offered support for the rational expectations hypothesis and reported evidence that markets with certain features aggregate dispersed information. The original results are based on only a few observations, and our attempt to replicate the key findings with an appropriately powered experiment largely fails. The resulting poststudy probability that market performance is better described by rational expectations than the prior information (Walrasian) model under the conditions specified in the original paper is very low. As a result of our failure to replicate, we investigate an alternate set of market features that combines aspects …

Minimum Wage As A Tool For Combatting Renter Burdens, Jack Hanson

Stevenson Center for Community and Economic Development—Student Research

There is a severe shortage of affordable housing in the United States. In 2011, the number of low-cost rental units (units renting for $800 or less per month) stood around 23.5 million, but by 2017, this number dropped to 19.5 million, roughly a 17% decrease (Joint Center for Housing Studies, 2020). The result is that in 2020, only 37 affordable units exist for every 100 of the nation’s 10.8 million extremely low-income renters (those earning 30% or less of the area median income) (National Low Income Housing Coalition, 2021). One contributing factor is that higher-income households are beginning to rent …

Trade Competition And Migration: Evidence From The Quartz Crisis, Tate Twinam

Arts & Sciences Articles

Foreign competition and technological change can both present threats to domestic industries, potentially resulting in out-migration from cities and regions where these industries are spatially agglomerated. In this paper, I study the migration effects of one such trade shock: The quartz crisis, which devastated the globally dominant Swiss watch industry in the 1970s. Using a differences-in-differences strategy, I show that this trade shock led to a rapid loss of population in affected areas, and a long-run change in growth patterns. This contrasts with many other studies of large trade shocks, which find little migration response. I highlight three key factors …

Compellingness In Nash Implementation, Shurojit Chatterji, Takashi Kunimoto, Paulo Daniel Salles Ramos

Research Collection School Of Economics

A social choice function (SCF) is said to be Nash implementable if there exists a mechanism in which every Nash equilibrium outcome coincides with that specified by the SCF. The main objective of this paper is to assess the impact of considering mixed strategy equilibria in Nash implementation. To do this, we focus on environments with two agents and restrict attention to finite mechanisms. We call a mixed strategy equilibrium “compelling” if its outcome Pareto dominates any pure strategy equilibrium outcome. We show that if the finite environment and the SCF to be implemented jointly satisfy what we call Condition …

An Economy Of Care: George Eliot's Middlemarch And Feminist Care Ethics, Madison V. Newman

Masters Theses

This thesis assesses the centrality of care relationships in George Eliot’s Middlemarch and, by doing so, seeks to provide a nuanced understanding of individual and collective morality. Using the ethics of care as a methodological framework to acknowledge the importance of care acts and successful care relations – especially those complicated by the presence of dichotomized socioeconomic hierarchies – will allow readers to engage more fully with this text, its author, her relations, her characters, and the community of readers; reading Eliot’s work from this lens will allow us to validate every interaction, every thread of connectedness, and every act …

Organizing Economies: Narrative Sensemaking And Communciative Resilience During Economic Disruption, Timothy Betts

USF Tampa Graduate Theses and Dissertations

This dissertation unites organizational communication, and economic theory to understand how individuals make sense of economic crises, imbed power and logic in those understandings, and construct new economic realities in the aftermath of crisis. Contra economic orthodoxy, this project conceives of economy and economics as a social construct. As a social construct, individuals organize economy and economics through discourse, make sense of through narrative, and rebuild through communication. This dissertation combines different theoretical perspectives—actor-network theory, antenarrative organization theory, and the communication theory of resilience—to recenter social scientific accounts of economic reality around communication, story, and power.

Specifically, I focus on …

A Universally Translatable Explication Of Adam Smith's Famous Proposition On "The Extent Of The Market", Bart J. Wilson, Gian Marco Farese

ESI Publications

Following Adam Smith’s line of argument, we examine the semantics of four economic principles in Chapter III of the Wealth of Nations that compose his famous proposition “that the division of labour is limited by the extent of the market.” We apply the Natural Semantic Metalanguage framework in linguistics to produce a series of explications that are clear and plain, cross-translatable into any language, intelligible to twenty-first-century readers, and faithfully close to the original text. Our paper explicates Smith’s logical argument in Chapter III and demonstrates how his ideas can be shared among speakers with different linguacultural backgrounds in line …

Preventing (Panic) Bank Runs, Hubert János Kiss, Ismael Rodriguez-Lara, Alfonso Rosa-Garcia

ESI Publications

We study experimentally an instrument to prevent bank runs in healthy banks. In particular, we extend the basic bank-run game, where depositors choose between withdrawing or keeping their money deposited, with a third option, the possibility to relocate funds to a priority account that is less profitable, but which guarantees a payoff even in a bank run. Theoretically, the use of this instrument dominates withdrawals for depositors without liquidity needs, and given this fact, depositors should optimally keep their deposits in the bank, so no bank run shall happen. In our experiment, we find evidence that the mechanism reduces not …

Working Paper No. 64, Ecological Economics Versus Environmental Economics, Audrey Demeaux

Working Papers in Economics

This inquiry seeks to establish that the field within the Discipline of Economic Science known as Ecological Economics is based upon assumptions and methodological foundations that differ from the field of Environmental Economics. It shall be argued that Environmental Economics did not emerge as the result of a new shift in economic thinking, but rather formed around a reorientation of standard neoclassical assumptions. This was undertaken in an effort to address environmental issues emerging several decades back. In contrast, it shall be argued that the field of Ecological Economics has brought to the Economics Discipline an appreciation for novel assumptions …

Working Paper No. 55, An Inquiry Into The Assumptions And Tenets Of Neoclassical Economics That Lead Towards Income Inequality, Katharine Nester

Working Papers in Economics

This inquiry seeks to establish that key assumptions foundational to Neoclassical Economics contribute towards income inequality. A consideration of the Neoclassical interpretation and assumptions of the laissez-faire approach to market economies opens the inquiry. I examine the economic outcomes that result when the assumptions underpinning the Neoclassical application of laissez-faire are false, as they often are in the real world. The inquiry then turns to the theories and natural “laws” as advanced by Vilfredo Pareto (1848-1923) and John Bates (J. B.) Clark (1847-1938), which were built upon the Neoclassical adaptation of laissez-faire and became canon in the Neoclassical school. Finally, …

Working Paper No. 66, Sir John Bowring, Trade Policies And Economic Development In Siam, Jackrit Kamudhamas

Working Papers in Economics

This inquiry seeks to establish that during the mid-19th century Sir John Bowring emerged as a proponent who formulated distinct trade policies that served to promote the economic development of Siam (Thailand). This thesis is supported with three parts. The first part investigates the trade policies of the Burney Treaty as the first step towards the initiation of a new form of foreign trade policies between Siam and the British Empire and other western countries. The second part explores further Sir Bowing’s thoughts and his mission in achieving the adjusting agreements of the Bowring Treaty. And lastly, the third part …

Working Paper No. 54, Nicholas Georgescu-Roegen And Ecological Economics, Miriam Silverman

Working Papers in Economics

This inquiry seeks to establish that in his book The Entropy Law and the Economic Process [1971] (2013), author Nicholas Georgescu-Roegen provides a foundation for Ecological Economics. The Entropy Law implies that the economic process is limited because it is reliant on finite natural resources, e.g., fossil fuels and minerals, as the economic process involves relying upon low-entropy natural resources in the production of consumer goods, and then results in the discarding of high-entropy waste, e.g., heat in the form of CO₂ and other greenhouse gasses, into the environment, eventually resulting in noticeable degradation. Notably, these ideas from Georgescu-Roegen’s …

Working Paper No. 59, Cultural Imperialism And Hegemony, Maria Zavala

Working Papers in Economics

While the traditional colonial imperialism of France and Great Britain ended after World War Two, it can be argued that a new form of imperialism replaced it. What is known as “cultural imperialism” includes the art of inserting a covert idea into person's mind by use of popular culture. Herein, Antonio Gramsci’s ideas of cultural imperialism are contemplated. This paper explores the topic by focusing upon some of the effects that popular American music has had on Latin music and the changes in culturally acceptable trends that have followed. Then, American beauty standards and the Eurocentric beauty standards of Latin …

Working Paper No. 65, On Debt, Enclosure And Witchcraft, Jenna Schoof

Working Papers in Economics

This inquiry seeks to establish that the process of commons-enclosure taking place in 14th-16th century Europe also required an “enclosure” of the female body, which was carried out by introducing radically novel conceptions of debt. The dual processes of bodily dispossession and debt imposition acted as a single force which is paradoxically the origin and effect of capitalist accumulation. This process began in Europe during the period of “transition” between feudalism and capitalism but has remained an essential component of capitalist accumulation through to globalization in contemporary times. To support this thesis, this inquiry considers the evolution of debt; the …

Essays On Conflict Mediation, Ali Kamranzadeh

Electronic Thesis and Dissertation Repository

An important barrier to conflict resolution is asymmetric information. That is adversaries have private information about their objectives, resources, and strengths during the conflict and have incentives to misrepresent this information during the negotiations. Third-party institutions, like mediators, can help adversaries to reach an agreement by making a peace proposal. In this thesis, I explore the implication of asymmetric information of players to the design of an optimal peace proposal by a mediator.

Chapter 2, co-authored with Charles Zheng, studies a problem of conflict mediation where a mediator proposes a split of a good between two ex-ante identical contestants thereby …

The Slogans And Goals Of Antitrust Law, Herbert J. Hovenkamp

Faculty Scholarship at Penn Carey Law

This is a comparative examination of the slogans and goals most advocated for antitrust law today – namely, that antitrust should be concerned with “bigness,” that it should intervene when actions undermine the “competitive process,” or that it should be concerned about promoting some conception of welfare. “Bigness” as an antitrust concern targets firms based on absolute size rather than share of a market, as antitrust traditionally has done. The bigness approach entails that antitrust cannot be concerned about low prices, or the welfare of consumers and labor. Nondominant firms could not sustain very high prices or cause significant reductions …

Essays On Social Choice And Implementation Theory, Paulo Daniel Salles Ramos

Dissertations and Theses Collection (Open Access)

We present here three essays. The first two are about Social Choice Theory and explore under what domain restrictions is possible to obtain a Social Choice Function that is Well Behaved as well as Monotonic, and what other characteristics can be inferred about such functions on that domain. The last essay is about Implementation Theory and explore how to obtain a more compelling form of implementation than pure Nash Equilibrium for finite environments using finite mechanisms.

Finance And Fear: Sentiment, Media, And Financial Markets During The Covid-19 Pandemic, Alison N. Sommers

Honors Theses

This thesis aims to build on existing research of market psychology and the effect of sentiment on financial markets. The main objective of this study is to determine the ability of investors to make rational decisions during the most recent period of high sentiment. The anomalies that have occurred in the stock market can be better understood by market psychology which focuses on the biases and social factors that influence investors. The media is a newly relevant factor impacting the volume of sentiment present in the market. A review of literature reveals that many studies of sentiment and financial market’s …

Political Legitimacy In Historical Political Economy, Avner Greif, Jared Rubin

ESI Working Papers

Political legitimacy has long been recognized in the social sciences as an integral component of governance. It encourages obedience without the threat of force, thus lowering governing costs and improving the efficacy of policies. This chapter begins by overviewing the extensive literature on political legitimacy, classifying studies by whether they are based on the beliefs (regarding the legitimacy of the authority) or effectiveness (good governance is legitimate governance). Among the studies focusing on beliefs, most take legitimacy as an exogenous element of political authority. We develop a conceptual framework to study how beliefs regarding political legitimacy form endogenously and impact …

300 Anniversary Of Smith’ Birth, Vernon L. Smith

ESI Working Papers

Thousand-word brief on key quotes from Adam Smith’s two books (TMS, WN) modelling Society and Economy.