Economic Theory Commons^™

Subreption, Radical Institutionalism, And Evolutionary Economics, John B. Hall, Alexander Dunlap, Joe Mitchell-Nelson

Economics Faculty Publications and Presentations

This inquiry seeks to establish the importance of subreption as an approach to economic and social evolution that also proves integral to the tradition of radical institutionalism. We relate subreption’s etymology and appearances in Roman, Canon and Scots Law, as well as in Philosophy, to its applications found in writings advanced by Thorstein Veblen and carried on later as William Dugger details the rise of corporate hegemony. Understood as an approach derivable from selected philosophical writings of Immanuel Kant, in social science subreption is suggested to occur through the introduction of an outside value that sets off a form of …

American Obesity: Rooted In Uncertainty, Institutions And Public Policy, James Woodward

Theses and Dissertations--Public Policy and Administration

Despite the efforts of policymakers, medical professionals, and other stakeholders, obesity and related health problems show no signs of receding from their record-high rates. Public policy has largely taken the form of consumer advice, (e.g., USDA’s Dietary Guidelines). Since consumers bear most of the costs associated with their obesity, the goal of obesity prevention appears to be incentive-compatible, prima facie. That is, there is no a priori case for much further policy intervention unless existing advice is deficient or consumers’ exhibit systematically poor decision-making.

My review of the literature shows that scholars have long conveyed a consistent narrative regarding …

Price Signaling In A Two-Market Duopoly, Matthew Hughes

Williams Honors College, Honors Research Projects

Within any industry, firms typically produce related products over multiple subsequent periods in an attempt to build consumer loyalty and achieve continued sales. Apple releases new iPhones and car companies produce new models every year, relying on consumers believing each new product is of high quality. Firms rely on the spillover effects from previous markets, where firms are able to more easily demonstrate their product's quality to the consumers before purchase. The goal is to find a range of prices which allows the high quality firm to distinguish its type to consumers via the price pH and if spillover effects …

Insatiability And Crisis: Using Interdisciplinarity To Understand (And Denaturalize) Contemporary Humans, Sean P. Macdonald, Costas Panayotakis

Publications and Research

This chapter illustrates how collaboration between different social sciences can encourage students to think critically about prevailing assumptions regarding human nature. Both the chapter and the pedagogical experience on which it is based investigate the distinctive type of human created by capitalist society. In so doing, it takes a heterodox approach to analyzing the concept of an insatiable human nature through a case study that invites students to critically assess this perspective. This discussion then leads to an investigation and critique of traditional neoclassical Economic assumptions about human behavior, which forms the basis for a case study on the causes …

Religious Identity And The Provision Of Public Goods: Evidence From The Indian Princely States, Latika Chaudhary, Jared Rubin

ESI Publications

This paper describes a simple model of how a ruler’s religious identity affects public goods provision. Our primary insight is that rulers reduce public goods expenditures to a greater degree when there are privately-provided substitutes excludable by religion.The basic idea is that if the good is provided privately to the ruler’s co-religionists, the ruler faces weaker incentives to provide this public good because his co-religionists receive lower marginal utility from its provision. Testing such a conjecture is an empirical challenge, however, since the religious identity of rulers rarely varies over time and place. We address this problem by exploiting …

Causes And Consequences Of The Protestant Reformation, Sascha O. Becker, Steven Pfaff, Jared Rubin

ESI Working Papers

The Protestant Reformation is one of the defining events of the last millennium. Nearly 500 years after the Reformation, its causes and consequences have seen a renewed interest in the social sciences. Research in economics, sociology, and political science increasingly uses detailed individual-level, city-level, and regional-level data to identify drivers of the adoption of the Reformation, its diffusion pattern, and its socioeconomic consequences. This survey takes stock of the research so far, tries to point out what we know and what we do not know, and which are the most promising areas for future research.

Payment Scheme Self-Selection In The Credence Goods Market: An Experimental Study, Hernan Bejarano, Ellen P. Green, Stephen Rassenti

ESI Working Papers

Given heterogeneity in expert behavior across payment schemes in credence goods markets, it becomes important to understand the consequences of payment scheme selection. To study the effect on customer well being of expert self-selection, we recruited subjects to participate in a real-effort credence good laboratory market. Experts were either randomly assigned or faced with the choice of three payment schemes: fee-for-service, salary, and capitation. We found that experts who selected fee-for-service payment resulted in customers with significantly worse outcomes in comparison with experts who had been randomly assigned to fee-for-service. In contrast, experts who selected salary payment did not change …

Bringing A Natural Experiment Into The Laboratory: The Measurement Of Individual Risk Attitudes, Zuzana Brokesova, Cary Deck, Jana Peliova

ESI Working Papers

Controlled laboratory experiments have become a generally accepted method for studying economic behavior, but there are two issues that regularly arise with such work. The first pertains to the ability to generalize experimental results outside the laboratory. While laboratory experiments are typically designed to mimic naturally occurring situations, ceteris paribus comparisons are rare. Using data from a promotional campaign by a bank and a matching laboratory experiment, we find similar patterns of risk taking behavior controlling for gender and age. The second issue pertains to the impact that the payment procedure in an experiment has on observed risk taking behavior. …

The Impact Of Taxes And Wasteful Government Spending On Giving, Roman M. Sheremeta, Neslihan Uler

ESI Working Papers

We examine the impact of taxes and wasteful government spending on charitable giving. In our model, the government collects a flat-rate tax on income net of donations and wastes part of the tax revenue before redistribution. The model provides theoretical predictions which we test in a framed field experiment. The results of the experiment show that the tax rate has a weak and insignificant effect on giving. The degree of waste, however, has a large, negative and significant effect on giving, with the relationship moderated by the curvature in the utility function.

Ambiguity Framed, Mark Schneider, Jonathan W. Leland, Nathaniel Wilcox

ESI Working Papers

In his exposition of subjective expected utility theory, Savage (1954) proposed that the Allais paradox could be reduced if it were recast into a format which made the appeal of the independence axiom of expected utility theory more transparent. Recent studies consistently find support for this prediction. We consider a salience-based choice model which explains this frame-dependence of the Allais paradox and derive the novel prediction that the same type of presentation format which was found to reduce Allais-style violations of expected utility theory will also reduce Ellsberg-style violations of subjective expected utility theory since that format makes the appeal …

Random Expected Utility And Certainty Equivalents: Mimicry Of Probability Weighting Functions, Nathaniel Wilcox

ESI Working Papers

For simple prospects of the kind routinely used for certainty equivalent elicitation, random expected utility preferences imply a conditional expectation function that can mimic deterministic rank dependent preferences. That is, an agent with random expected utility preferences can have mean certainty equivalents that look exactly like rank dependent probability weighting functions of the inverse-s shape discussed by Quiggin (1982) and later advocated by Tversky and Kahneman (1992) and other scholars. It seems that certainty equivalents cannot nonparametrically identify preferences, at least not in every relevant sense, since their conditional expectation depends on assumptions concerning the source and nature of their …

What Makes A Good Trader? On The Role Of Intuition And Reflection On Trader Performance, Brice Corgnet, Mark Desantis, David Porter

ESI Working Papers

Using simulations and experiments, we pinpoint two main drivers of trader performance: cognitive reflection and theory of mind. Both dimensions facilitate traders’ learning about asset valuation. Cognitive reflection helps traders use market signals to update their beliefs whereas theory of mind offers traders crucial hints on the quality of those signals. We show these skills to be complementary because traders benefit from understanding the quality of market signals only if they are capable of processing them. Cognitive reflection relates to previous Behavioral Finance research as it is the best predictor of a trader’s ability to avoid commonly-observed behavioral biases.

Gender Biases In Delegation, Eleonora Bottino, Teresa García-Muñoz, Praveen Kujal

ESI Working Papers

We explore gender biases towards delegation in a modified (delegation) dictator game. Under compulsory delegation and no (gender) revelation no significant gender differences are observed for choices made by principals. Male agents share little with the recipients, meanwhile, female (agents) are not responsive to the incentive scheme and return less to the dictator. However, a clear dichotomy in female behavior is observed under gender revelation. As principals, females behave similar to their male counterparts and appoint as agents those who return more to them. On the other hand, as agents’ females show greater redistributive concerns relative to their male counterparts …

Robust Information Cascade With Endogenous Ordering, Yi Zhang

Research Collection School Of Economics

We analyze a sequential decision model with endogenous ordering in which decision makers are allowed to choose the time of acting (exercising a risky investment option) or waiting. We show the existence of a unique symmetric equilibrium and characterize information cascade under endogenous ordering. Further, if there are two or more risky investment options, individuals tend to wait longer with competition. Hence, we could end up with a dilemma: more options might be worse.

Deny, Deny, Deny, Michael Lewyn

Scholarly Works

Some commentators argue that new housing supply and less restrictive zoning will not reduce housing prices in high-cost cities. This article discusses and critiques their arguments.

Responses To Change In The Global Political Economy Of Innovation – The Role Of Sub-National States In Industrial Transition, Dan Herman

Theses and Dissertations (Comprehensive)

This dissertation seeks to explore how sub-national levels of the state promote the development of new industrial sectors. To do so this dissertation builds on a series of theoretical perspectives on the role of the state in the economy and develops a unique view of how sub-national states coalesce and contrast within these perspectives. It does so through a series of empirical case studies focused on sub-national jurisdictions in North America that highlight diverse varieties of state actions that contribute, if not lead, industrial transitions and the development of new innovation-oriented industrial sectors. In so doing, the dissertation presents a …

Seller Beware: Supply And Demand Reduction And Price Manipulation In Multiple-Unit Uniform Price Auctions, Abel Winn, Michael Parente, David Porter

Economics Faculty Articles and Research

We experimentally compare under-revelation of supply and demand across alternative variations of ascending and descending two-sided price clock auctions. We find that buyers reduce demand more when the price is ascending but sellers’ behavior is consistent across clock directions. As a result, the clock price rule has empirical effects on efficiency even though it is theoretically neutral.

Career And Technical Education Completers' Perspectives Of College And Career Readiness, Dandi Daniels

Walden Dissertations and Doctoral Studies

At a southeast United States high school career center, career and technology education (CTE) programs failed to meet the state career and college readiness benchmarks. Meeting these benchmarks is necessary for students who transition from high school to the workplace or a postsecondary education program. Bandura's social learning theory served as the conceptual framework for this study. The purpose of this bounded, qualitative case study was to explore students' perspectives of their career and college readiness or nonreadiness after completing a CTE program. Purposeful sampling was used to identify 10 participants who had completed a vocational technical center (VTC) CTE …

Economic Policy Implications Of Port Concession In Nigeria, Chiedu Bertram Ndubisi

Walden Dissertations and Doctoral Studies

Previous research on privatization has focused on its effect on output, profitability, investment, and efficiency at the level of the firm, neglecting the economic growth and other impacts. Nigeria's port privatization through concession in 2006 covered virtually all the ports in the economy. However, the few studies on the subject neither factored in the complexity that characterize the multiple port system nor controlled for alternative explanations of the changes in the economy. This correlational study tested the property rights theory by investigating whether the changes in production efficiency at the ports following privatization are good predictors of economic growth in …

Rethinking The "Marginal Revolution" In The History Of Economic Thought: A Brief Examination Of The Marginal Utility Theory Before And In The 1870s, Ding Ning

Electronic Theses and Dissertations

The "Marginal Revolution," a well-known event in the history of economic thought, challenged the mainstream classical political economy and introduced new methods to economic study. The "Marginal Revolution" marked the rise of the Marginal Utility School and pushed the formulation of neoclassical economics. Because marginal utility is the core concept of the "Marginal Revolution," this thesis studies the origin of marginal utility theory by examining figures such as Bernoulli, Bentham, Dupuit, and Goseen, and the utility theory with its related topics of Jevons, Menger and Walras in the 1870s. This thesis considers the significance of the "Marginal Revolution," with particular …