Other Economics Commons^™

Adam Smith’S Modeling Of Agents: Roots Versus Consequences Of Action, Vernon L. Smith, Sabiou M. Inoua

ESI Publications

Adam Smith founded his investigations of economic and social exchanges on the roots of human action (sympathy, need, self-interest), unlike the utilitarians (Hume and the neoclassical economists), who centered theirs on the consequences of human action (pleasure, utility of outcome). This distinction is key to understanding the contrast between the two schools of thought, as we emphasize in this chapter.

What Did Adam Smith Mean? The Semantics Of The Opening Key Principles In The Wealth Of Nations, Bart J. Wilson, Gian Marco Farese

ESI Publications

We present a semantic and textual analysis of the first two chapters of the Wealth of Nations to elucidate the meaning of several of Adam Smith’s key ideas. Using the methodology of the Natural Semantic Metalanguage, we produce semantic explications of some of Adam Smith’s fundamental principles of economics phrased in simple and cross-translatable words. The extracts from the original text function as textual evidence and conceptual reference for the explications we present. We demonstrate that: (i) by reducing the principles as conceived by Smith to their core meanings, it is possible to resolve some interpretive ambiguities for general readers …

Economics Of Markets: Neoclassical Theory, Experiments, And Theory Of Classical Price Discovery, Sabiou M. Inoua, Vernon L. Smith

ESI Publications

This book establishes that neoclassical economics based on the marginal utility calculus failed to derive a theory of consumer market price discovery consistent with the experimental market evidence. Such markets involve inherently discrete final-demand items bought for consumption and not subject to resale. Classical economists following Adam Smith articulated a rich narrative of price discovery theory consistent with experimental evidence based on operational concepts of discrete demand values (maximum willingness-to-pay), and symmetrically, supply costs (minimum willingness-to-accept). We develop and extend a mathematical model of classical market price formation. Chapter 1 & 2 describes this theme and chapter 3 connects it …

Humanomics: Moral Sentiments And The Wealth Of Nations For The Twenty-First Century, Vernon Smith, Bart J. Wilson

Economics Faculty Books and Book Chapters

Sometime in the last 250 years, economists lost sight of the full range of human feeling, thinking, and knowing in everyday life. Smith and Wilson show how Adam Smith's model of sociality can re-humanize twenty-first century economics by undergirding it with sentiments, fellow feeling, and a sense of propriety - the stuff of which human relationships are built. Integrating insights from The Theory of Moral Sentiments and the Wealth of Nations into contemporary empirical analysis, this book shapes economic betterment as a science of human beings.

Equilibrium Play In Voluntary Ultimatum Games: Beneficence Cannot Be Extorted, Vernon L. Smith, Bart J. Wilson

ESI Working Papers

One robust result in experimental economics is the failure to observe equilibrium play in the ultimatum game. A heretofore unnoticed feature of the game is that neither player voluntarily chooses to play the game. Motivated by Adam Smith’s proposition that beneficence—like that of non‐ equilibrium play in the ultimatum game—cannot be extorted by force, we offer the responder the opportunity to opt out of the game for a mere $1 payoff for both players. We observe high rates of equilibrium play with highly unequal splits when responders choose to play such ultimatum games with both fixed and variable sums.

The Fair And Impartial Spectator, Vernon L. Smith

Economics Faculty Articles and Research

Adam Smith’s metaphor of the impartial spectator is an essential element in understanding his model of the maturation process whereby people learn to follow general rules that honor the human sentiments of gratitude and resentment in others. Through the impartial spectator human action, subject to error, is governed by self-command. Smith’s model is presented in the form of a series of propositions.

Aristotle's Difficult Relationship With Modern Economic Theory, Spencer J. Pack

Economics Faculty Publications

This paper reviews Aristotle's problematic relationship with modern economic theory. It argues that in terms of value and income distribution theory, Aristotle should probably be seen as a precursor to neither classical nor neoclassical economic thought. Indeed, there are strong arguments to be made that Aristotle's views are completely at odds with all modern economic theory, since, among other things, he was not necessarily concerned with flexible market prices, opposed the use of money to acquire more money, and did not think that the unintended consequences of human activity were generally beneficial. The paper argues however, that this interpretation goes …

Smith’S Humean Criticism Of Hume’S Account Of The Origin Of Justice, Spencer J. Pack, Eric Schliesser

Economics Faculty Publications

Adam Smith criticizes David Hume's account of the origin of and continuing adherence to the rule of law for being not sufficiently Humean. Hume explained that adherence to the rule of law originated in the self-interest to restrain self-interest. According to Smith, Hume does not pay enough attention to the passions of resentment and admiration, which have their source in the imagination. Smith offers a more naturalistic and evolutionary account of the psychological preconditions of the establishment and morality of justice than Hume had. Smith severs the intimate connection that Hobbes and Hume made between justice and property.

(Review) Self-Interest Before Adam Smith: A Genealogy Of Economic Science, Spencer J. Pack

Economics Faculty Publications

Pierre Force, Self-Interest Before Adam Smith: A Genealogy of Economic Science (Cambridge: Cambridge University Press, 2003), pp. ix, 279, $65.00. ISBN 0-521 83060-5.

(Review) Pierre Force, Self-Interest Before Adam Smith: A Genealogy Of Economic Science, Spencer J. Pack

Economics Faculty Publications

Pierre Force, Self-Interest Before Adam Smith: A Genealogy of Economic Science (Cambridge: Cambridge University Press, 2003), pp. ix, 279, $65.00. ISBN 0-52183060-5.

(Review) The Myth Of Adam Smith, Spencer J. Pack

Economics Faculty Publications

The Myth of Adam Smith, By Salim Rashid. Cheltenham, UK: Edward Elgar, 1998. Pp. X, 227. $80.00