Pub Date : 2022-08-16DOI: 10.1080/1350178X.2022.2112266
L. Larue
ABSTRACT This article aims to defend a novel account of pluralism in economics. First, it argues that what justifies pluralism is its epistemological benefits. Second, it acknowledges that pluralism has limits, and defends reasonable pluralism, or the view that we should only accept those theories and methods that can be justified by their communities with reasons that other communities can accept. Clearly, reasonable pluralism is an ideal, which requires economists of different persuasions to respect certain norms of communication while evaluating each other’s theories. The article ends with a discussion of the conditions under which reasonable communication becomes possible.
{"title":"A defense of reasonable pluralism in economics","authors":"L. Larue","doi":"10.1080/1350178X.2022.2112266","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2112266","url":null,"abstract":"ABSTRACT This article aims to defend a novel account of pluralism in economics. First, it argues that what justifies pluralism is its epistemological benefits. Second, it acknowledges that pluralism has limits, and defends reasonable pluralism, or the view that we should only accept those theories and methods that can be justified by their communities with reasons that other communities can accept. Clearly, reasonable pluralism is an ideal, which requires economists of different persuasions to respect certain norms of communication while evaluating each other’s theories. The article ends with a discussion of the conditions under which reasonable communication becomes possible.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"26 1","pages":"294 - 308"},"PeriodicalIF":1.2,"publicationDate":"2022-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74169842","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-08-01DOI: 10.1080/1350178x.2022.2100919
Philippe van Basshuysen
Where economists previously viewed the market as arising from a ‘ spontaneous order ’ , antithetical to design, they now design markets to achieve speci fi c purposes. This paper reconstructs how this change in what markets are and can do came about and considers some consequences. Two decisive developments in economic theory are identi fi ed: fi rst, Hurwicz ’ s view of institutions as mechanisms, which should be designed to align incentives with social goals; and second, the notion of market places – consisting of infrastructure and algorithms – which should be designed to exhibit stable properties. These developments have empowered economists to create marketplaces for speci fi c purposes, by designing appropriate algorithms. I argue that this power to create marketplaces requires a shift in ethical reasoning, from whether markets should reach into certain spheres of life, to how market algorithms should be designed. I exemplify this shift, focusing on bias, and arguing that transparency should become a goal of market design.
{"title":"Markets, market algorithms, and algorithmic bias","authors":"Philippe van Basshuysen","doi":"10.1080/1350178x.2022.2100919","DOIUrl":"https://doi.org/10.1080/1350178x.2022.2100919","url":null,"abstract":"Where economists previously viewed the market as arising from a ‘ spontaneous order ’ , antithetical to design, they now design markets to achieve speci fi c purposes. This paper reconstructs how this change in what markets are and can do came about and considers some consequences. Two decisive developments in economic theory are identi fi ed: fi rst, Hurwicz ’ s view of institutions as mechanisms, which should be designed to align incentives with social goals; and second, the notion of market places – consisting of infrastructure and algorithms – which should be designed to exhibit stable properties. These developments have empowered economists to create marketplaces for speci fi c purposes, by designing appropriate algorithms. I argue that this power to create marketplaces requires a shift in ethical reasoning, from whether markets should reach into certain spheres of life, to how market algorithms should be designed. I exemplify this shift, focusing on bias, and arguing that transparency should become a goal of market design.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"18 1","pages":""},"PeriodicalIF":1.2,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76477250","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-14DOI: 10.1080/1350178X.2022.2088085
Nick Huntington-Klein
ABSTRACT Structural Causal Modeling (SCM) is an approach to causal inference closely associated with Judea Pearl and given an accessible instroduction in [Pearl, J., & Mackenzie, D. (2018). The book of why: The new science of cause and effect. Basic Books]. It is highly popular outside of economics, but has seen relatively little application within it. This paper briefly introduces the main concepts of SCM through the lens of whether applied economists are likely to find marginal benefit in these methods beyond standard economic approaches to causal inference. The most promising areas are those where SCM's causal diagrams alone offer significant value: covariate selection, the development of placebo tests, causal discovery, and identification in complex models.
{"title":"Pearl before economists: the book of why and empirical economics","authors":"Nick Huntington-Klein","doi":"10.1080/1350178X.2022.2088085","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2088085","url":null,"abstract":"ABSTRACT Structural Causal Modeling (SCM) is an approach to causal inference closely associated with Judea Pearl and given an accessible instroduction in [Pearl, J., & Mackenzie, D. (2018). The book of why: The new science of cause and effect. Basic Books]. It is highly popular outside of economics, but has seen relatively little application within it. This paper briefly introduces the main concepts of SCM through the lens of whether applied economists are likely to find marginal benefit in these methods beyond standard economic approaches to causal inference. The most promising areas are those where SCM's causal diagrams alone offer significant value: covariate selection, the development of placebo tests, causal discovery, and identification in complex models.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"100 1","pages":"326 - 334"},"PeriodicalIF":1.2,"publicationDate":"2022-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81001272","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-31DOI: 10.1080/1350178X.2022.2077407
Michael Messerli, K. Reuter
ABSTRACT Commitments are crucial for our lives but there is no consensus on how commitments and preferences relate to each other. In this paper, we present three empirical studies that provide evidence that people sometimes choose a less preferred option when they have made a commitment.
{"title":"Can commitments cause counterpreferential choices?","authors":"Michael Messerli, K. Reuter","doi":"10.1080/1350178X.2022.2077407","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2077407","url":null,"abstract":"ABSTRACT Commitments are crucial for our lives but there is no consensus on how commitments and preferences relate to each other. In this paper, we present three empirical studies that provide evidence that people sometimes choose a less preferred option when they have made a commitment.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"106 1","pages":"94 - 106"},"PeriodicalIF":1.2,"publicationDate":"2022-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74095206","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-13DOI: 10.1080/1350178X.2022.2075139
Enrico Petracca
Periodically, by a rough estimate twice per decade, a new popular book aspires to shake our common understanding of rationality. Since this concept is not only the backbone of normative analysis in the behavioral sciences but also of the way people more generally understand normativity, the stakes are particularly high. Among past successful attempts to rethink rationality are, so to refresh the memory, books of the caliber of Gigerenzer (2007), Kahneman (2011), and more recently Mercier and Sperber (2017). Because of its straightforward title, Rationality, and one enticing part of its subtitle, the promise to tell us What it is, Steven Pinker’s latest work aspires to be one of those ground-breaking books. There are two reasons, however, why readers might resist the temptation to consider Pinker’s book a foundational one. One reason is that in most of its parts it reads like a pamphlet, in which a world-renowned public intellectual attempts to shake the conscience of a world too dramatically lacking in reason and rationality (Pinker dispenses evidence of this masterfully). The public intellectual posture was to be expected, since Pinker has recently been in the vortex of inflamed debates over sensitive societal topics, and this book is in many regards a learned continuation of those debates. Pinker presents himself as a staunch advocate of freedom of speech and critical thinking, seen as requirements for democratic societies whose degree of rationality he deems to depend on a society’s capacity to deal with its ‘taboos’. Because of this posture, the book may risk being underestimated by those looking for a pristine foundational discussion. But another reason not to regard this book as foundational is the fact that Pinker does not present in it a novel idea of rationality. The readership of economists is certainly the most well equipped to understand that. The book’s central part, seven-elevenths of the total, is a superbly accessible guide to the edifice of rationality from the ground floor of logic (chapter 3) up to probability (chapter 4), Bayesian reasoning (chapter 5), rational choice theory (chapter 6), statistical decision theory (chapter 7), game theory (chapter 8), and the distinction between correlation and causation (chapter 9). The other four-elevenths are a demonstration that humans do not master these subjects – let alone apply them correctly to life – and a plea for why we should. This shows that Pinker does not really venture into a quest for the essence of rationality; what rationality is seems uncontroversial from the start: ‘My own position on rationality’, he says more as an adept than as a pioneer, ‘is “I’m for it”’ (p. 36). His true goal is to convince people to embrace rationality, challenge their belief that it is something ‘uncool’ and ‘cerebral’ that would turn one into a ‘nerd’, a ‘wonk’, a ‘geek’, or a ‘brainiac’ (p. 35, italics in original), not to challenge the classical idea of rationality. But even if one might thin
{"title":"Rationality: What it is, why it seems scarce, why it matters","authors":"Enrico Petracca","doi":"10.1080/1350178X.2022.2075139","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2075139","url":null,"abstract":"Periodically, by a rough estimate twice per decade, a new popular book aspires to shake our common understanding of rationality. Since this concept is not only the backbone of normative analysis in the behavioral sciences but also of the way people more generally understand normativity, the stakes are particularly high. Among past successful attempts to rethink rationality are, so to refresh the memory, books of the caliber of Gigerenzer (2007), Kahneman (2011), and more recently Mercier and Sperber (2017). Because of its straightforward title, Rationality, and one enticing part of its subtitle, the promise to tell us What it is, Steven Pinker’s latest work aspires to be one of those ground-breaking books. There are two reasons, however, why readers might resist the temptation to consider Pinker’s book a foundational one. One reason is that in most of its parts it reads like a pamphlet, in which a world-renowned public intellectual attempts to shake the conscience of a world too dramatically lacking in reason and rationality (Pinker dispenses evidence of this masterfully). The public intellectual posture was to be expected, since Pinker has recently been in the vortex of inflamed debates over sensitive societal topics, and this book is in many regards a learned continuation of those debates. Pinker presents himself as a staunch advocate of freedom of speech and critical thinking, seen as requirements for democratic societies whose degree of rationality he deems to depend on a society’s capacity to deal with its ‘taboos’. Because of this posture, the book may risk being underestimated by those looking for a pristine foundational discussion. But another reason not to regard this book as foundational is the fact that Pinker does not present in it a novel idea of rationality. The readership of economists is certainly the most well equipped to understand that. The book’s central part, seven-elevenths of the total, is a superbly accessible guide to the edifice of rationality from the ground floor of logic (chapter 3) up to probability (chapter 4), Bayesian reasoning (chapter 5), rational choice theory (chapter 6), statistical decision theory (chapter 7), game theory (chapter 8), and the distinction between correlation and causation (chapter 9). The other four-elevenths are a demonstration that humans do not master these subjects – let alone apply them correctly to life – and a plea for why we should. This shows that Pinker does not really venture into a quest for the essence of rationality; what rationality is seems uncontroversial from the start: ‘My own position on rationality’, he says more as an adept than as a pioneer, ‘is “I’m for it”’ (p. 36). His true goal is to convince people to embrace rationality, challenge their belief that it is something ‘uncool’ and ‘cerebral’ that would turn one into a ‘nerd’, a ‘wonk’, a ‘geek’, or a ‘brainiac’ (p. 35, italics in original), not to challenge the classical idea of rationality. But even if one might thin","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"57 1","pages":"335 - 339"},"PeriodicalIF":1.2,"publicationDate":"2022-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86704925","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-15DOI: 10.1080/1350178X.2022.2063925
Marek Hudík
ABSTRACT This paper suggests that Nash equilibrium can be interpreted as a conceptual tool for addressing comparative-statics issues on an aggregate level. Together with additional assumptions, Nash equilibrium helps generate testable predictions about changes or differences of behavior induced by changes or differences of exogenous variables. However, Nash-equilibrium behavior, as such, is not subject to empirical testing. Instead, widespread and persistent behavior is modeled as a Nash equilibrium by assumption. The paper argues that this interpretation is in line with the traditional use of an equilibrium concept in price theory. The suggested interpretation is illustrated with the model of public-goods provision. The paper compares this interpretation of Nash equilibrium with other interpretations and discusses its limits.
{"title":"Nash meets Samuelson: the comparative-statics interpretation of Nash equilibrium","authors":"Marek Hudík","doi":"10.1080/1350178X.2022.2063925","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2063925","url":null,"abstract":"ABSTRACT This paper suggests that Nash equilibrium can be interpreted as a conceptual tool for addressing comparative-statics issues on an aggregate level. Together with additional assumptions, Nash equilibrium helps generate testable predictions about changes or differences of behavior induced by changes or differences of exogenous variables. However, Nash-equilibrium behavior, as such, is not subject to empirical testing. Instead, widespread and persistent behavior is modeled as a Nash equilibrium by assumption. The paper argues that this interpretation is in line with the traditional use of an equilibrium concept in price theory. The suggested interpretation is illustrated with the model of public-goods provision. The paper compares this interpretation of Nash equilibrium with other interpretations and discusses its limits.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"14 1","pages":"122 - 134"},"PeriodicalIF":1.2,"publicationDate":"2022-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76018915","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-03DOI: 10.1080/1350178x.2022.2070237
Luis Mireles-Flores, M. Małecka, Caterina Marchionni
{"title":"Introduction to the INEM 2019 special issue","authors":"Luis Mireles-Flores, M. Małecka, Caterina Marchionni","doi":"10.1080/1350178x.2022.2070237","DOIUrl":"https://doi.org/10.1080/1350178x.2022.2070237","url":null,"abstract":"","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"65 1","pages":"111 - 112"},"PeriodicalIF":1.2,"publicationDate":"2022-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85051317","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-03DOI: 10.1080/1350178X.2022.2061721
Till Grüne-Yanoff
ABSTRACT Behavioral welfare economics (BWE) assigns different roles to preferences than either non-behavioral forms of welfare economics or theories outside of the domain of welfare economics. In particular, BWE differs from other forms of welfare economics in its attempt to distinguish welfare-relevant from welfare-irrelevant subjective attitudes based on some notion of deliberation error. Based on recent arguments for the purpose-dependence of the interpretation of preferences, I argue that a functionalist-dispositional understanding of preference is not sufficient for BWE. Instead, I distinguish two levels of functional analysis – algebraic and algorithmic – and argued that it is the algorithmic level, capturing the relevant mental processes and representations producing the observed behavior, that is required for BWE.
{"title":"What preferences for behavioral welfare economics?","authors":"Till Grüne-Yanoff","doi":"10.1080/1350178X.2022.2061721","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2061721","url":null,"abstract":"ABSTRACT Behavioral welfare economics (BWE) assigns different roles to preferences than either non-behavioral forms of welfare economics or theories outside of the domain of welfare economics. In particular, BWE differs from other forms of welfare economics in its attempt to distinguish welfare-relevant from welfare-irrelevant subjective attitudes based on some notion of deliberation error. Based on recent arguments for the purpose-dependence of the interpretation of preferences, I argue that a functionalist-dispositional understanding of preference is not sufficient for BWE. Instead, I distinguish two levels of functional analysis – algebraic and algorithmic – and argued that it is the algorithmic level, capturing the relevant mental processes and representations producing the observed behavior, that is required for BWE.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"12 1","pages":"153 - 165"},"PeriodicalIF":1.2,"publicationDate":"2022-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89045198","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-14DOI: 10.1080/1350178X.2022.2049853
F. Hindriks
ABSTRACT To unify rival theories is to combine their key insights into a single coherent framework. It is often achieved by integrating the theories and forging new connections between their explanatory factors, which leads to an increase in explanatory power. Philip Pettit has proposed an alternative method that serves to establish that their key insights can be coherently combined. Instead of integrating them, he reconciles them by adjusting their domains of application so as to avoid overlap. As a result, the theories no longer compete. I argue that integration is often to be preferred to reconciliation. First, reconciliation retains the original insights, but only for part of the domain. In contrast, integration preserves and enriches the original insights across the board. Second, integration leads to a substantial increase in explanatory power, whereas reconciliation might even decrease it. I substantiate these claims by comparing Pettit’s Virtual Control Theory to the Rules-and-Equilibrium Theory.
{"title":"Unifying Theories of institutions: a critique of Pettit’s Virtual Control Theory","authors":"F. Hindriks","doi":"10.1080/1350178X.2022.2049853","DOIUrl":"https://doi.org/10.1080/1350178X.2022.2049853","url":null,"abstract":"ABSTRACT To unify rival theories is to combine their key insights into a single coherent framework. It is often achieved by integrating the theories and forging new connections between their explanatory factors, which leads to an increase in explanatory power. Philip Pettit has proposed an alternative method that serves to establish that their key insights can be coherently combined. Instead of integrating them, he reconciles them by adjusting their domains of application so as to avoid overlap. As a result, the theories no longer compete. I argue that integration is often to be preferred to reconciliation. First, reconciliation retains the original insights, but only for part of the domain. In contrast, integration preserves and enriches the original insights across the board. Second, integration leads to a substantial increase in explanatory power, whereas reconciliation might even decrease it. I substantiate these claims by comparing Pettit’s Virtual Control Theory to the Rules-and-Equilibrium Theory.","PeriodicalId":46507,"journal":{"name":"Journal of Economic Methodology","volume":"2012 1","pages":"166 - 177"},"PeriodicalIF":1.2,"publicationDate":"2022-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73685397","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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