Restraining the genuine homo economicus: why the economy cannot be divorced from its governance

The Homo economicus of traditional economics is far from being completely self-interested, rational, or as individualistic as he is purported to be; he will haggle to death over price but will not take what he wants by force. Implicitly, he is assumed to behave ruthlessly within a well-defined bubble of sainthood. Based on a simple model, I first examine what occurs when this assumption is relaxed and genuine, amoral Homines economici interact. Productivity can be inversely related to compensation; a longer shadow of the future can intensify conflict; and, more competition among providers of protection reduces welfare. The patently inefficient outcomes that follow call for restraining self-interest, for finding ways to govern markets. I then review some of the different ways of creating restraints, from the traditional social contract, to the hierarchical domination of kings and lords, to modern forms of governance. Checks and balances, wider representation, the bureaucratic form of organization, and other ingredients of modern governance can partly be thought of as providing restraints to the dark side of self-interest. Though highly imperfect, these restraints are better than the alternative, which typically involves autocratic, amateurish, and corrupt rule. Then, thinking of most problems in terms of a first-best economic model is practically and scientifically misguided. -- Der Homo Economicus der klassischen Wirtschaftswissenschaften ist dadurch gekennzeichnet, dass er zwar bis in den Tod um Preise feilscht, sich aber niemals Dinge mit Gewalt aneignen würde. So betrachtet ist er nicht in jeder Hinsicht vollständig eigennützig und rational oder individualistisch. Diese Eigenschaften treffen nur auf eine Dimension seines Verhaltens zu, nämlich auf sein Verhalten im Marktgeschehen. In Hinblick auf das Respektieren von Eigentumsrechten verhält sich der Homo Economicus geradezu wie ein Heiliger. Basierend auf einer einfachen Analyse wird in der Arbeit untersucht, welche Konsequenzen die Lockerung dieser Annahme hat. Die Interaktion solcher nunmehr wirklich eigennütziger Homines Economici hat verschiedene Implikationen. Beispielsweise kann eine besonders hohe Produktivität eines Akteurs dazu führen, dass er eine besonders niedrige Entlohnung erhält. Auch kann die Möglichkeit zukünftiger Verhandlungen Konflikte in der Gegenwart verschärfen. Ferner wird ein stärkerer Wettbewerb zwischen Akteuren, die den Schutz von Eigentumsrechten anderer als Dienstleistung anbieten, die Wohlfahrt senken. Solche Ineffizienzen können dazu führen, dass es allokationspolitisch sinnvoll ist, den Eigennutz zu zügeln und Märkte zu regulieren. In der Arbeit werden verschiedene Möglichkeiten geprüft, solche Beschränkungen zu schaffen, vom traditionellen Gesellschaftsvertrag über die hierarchische Herrschaft von Königen und Adligen, bis hin zu modernen Regierungsformen. Checks and Balances, die umfassende Repräsentation, die bürokratische Organisationsform und andere Elemente des modernen Regierens können teilweise für Beschränkungen der dunklen Seite des Eigennutzes sorgen. Obwohl solche Formen der Beschränkung nicht sehr wirkungsvoll sind, sind sie gegenüber ihren Alternativen überlegen, die typischerweise mit autokratischer, amateurhafter und korrupter Herrschaft einhergehen.Conflict,property rights,governance

Restraining the Genuine Homo Economicus: Why the Economy Cannot be Divorced from its Governance

The Homo economicus of traditional economics is far from being completely self-interested, rational, or as individualistic as he is purported to be; he will haggle to death over price but will not take what he wants by force. Implicitly, he is assumed to behave ruthlessly within a welldefined bubble of sainthood. Based on a simple model, I first examine what occurs when this assumption is relaxed and genuine, amoral Homo economici interact. Productivity can be inversely related to compensation; a longer shadow of the future can intensify conflict; and, more competition among providers of protection reduces welfare. The patently inefficient outcomes that follow call for restraining self-interest, for finding ways to govern markets. I then review some of the different ways of creating restraints, from the traditional social contract, to the hierarchical domination of kings and lords, to modern forms of governance. Checks and balances, wider representation, the bureaucratic form of organization, and other ingredients of modern governance can partly be thought of as providing restraints to the dark side of self-interest. Though highly imperfect, these restraints are better than the alternative, which typically involves autocratic, amateurish, and corrupt rule. Then, thinking of most problems in terms of a first-best economic model is practically and scientifically misguided.

A Survey of Interdependent Information Security Games

Risks faced by information system operators and users are not only determined by their own security posture, but are also heavily affected by the security-related decisions of others. This interdependence between information system operators and users is a fundamental property that shapes the efficiency of security defense solutions. Game theory is the most appropriate method to model the strategic interactions between these participants. In this survey, we summarize game-theoretic interdependence models, characterize the emerging security inefficiencies, and present mechanisms to improve the security decisions of the participants. We focus our attention on games with interdependent defenders and do not discuss two-player attackerdefender games. Our goal is to distill the main insights from the state-of-the-art and to identify the areas that need more attention from the research community

International Organizations as Corporate Actors: Agency and Emergence in Theories of International Relations

In this paper, the implicit and explicit conceptualizations of international organizations found in the three major theories of international relations are outlined and compared. It turns out that in a neorealist framework, international organizations can be explained; however, they exhibit no autonomy and cannot therefore be conceptualized as a corporate actor. Principally, the same applies to rational choice institutionalism, although limited autonomy is conceivable. Both theories are reductionist in the sense that they do not allow a corporate actor beyond the nation-state. International organizations are at best instruments of state interests. Solely social constructivist theories allow a conceptualization of international organizations as partly autonomous corporate actors. The reason for this conceptual openness lies in its ontology that includes ideational factors such as knowledge and ideas. The concept of emergence gives the core explanation for international organization autonomy: identities and interests of states and international organizations constitute each other mutually. This is specified by referring to the generation of new knowledge within international organizations as the key feature which accounts for feedbacks to the member-states of international organizations. This power of international organizations to alter perceptions and identities of their own ‘founding fathers’ makes them more than state instruments. International organizations thereby gain autonomy, which justifies conceiving of them as high-order corporate actors in international relations.

From Conflict to Reconstruction: Reviving the Social Contract

conflict, contract, civil war, reconstruction

Quantifying and Forecasting Vulnerability to Dyadic Conflict in an Integrated Assessment Model: Modeling International Relations Theory

The character of state interaction matters. This dissertation quantifies this interaction from 1960-2001 and then forecasts it from 2010-2050. I contribute to the field of International Relations by improving traditional measures of Realism and Liberalism, quantifying new perspectives sensitive to cultural interaction, and statistically evaluating these indices relative to the occurrence of conflict. It is the first step in an academic research agenda that desires to expand the scope of possibility regarding the modeling of International Relations theory for the purpose of theory evaluation and policy analysis. This dissertation spans two fields of study that do not typically overlap: International Relations and Integrated Assessment Modeling. I begin by laying a broad foundation to bridge this chasm. I do this by first exploring knowledge constraints associated with forecasting. This leads to an overview of my conceptual and empirical tool for calibrating my final model: the historic occurrence of international conflict. Next, I introduce conceptual and applied systems theory, which leads to an overview of the International Futures (IFs) model. I then explore Liberalism and Realism as they have been traditionally operationalized at the macro-level. A newly quantified variable--referred to as the Cultures of Interaction Index-- is introduced that builds on Liberal notions and tries to explain some aspect of intersubjective norms and values operating in a dyad. I perform statistical analysis on these indices and show that using IR theories in conjunction explains more of the historic occurrence of conflict--and thus the character of state interaction--than using any theoretical tradition in isolation. I then endogenize Liberalism and Realism in IFs and use the cultural measure as an exogenous constant. I am interested in whether the stock of culture in a dyad and growth in Liberal notions of interdependence can off-set negative pressures arising from Realism. Most dyads improve their character of interaction to 2050, but some become more conflictual, including China - US and China - India. The analysis is extended by looking at long-term structural shifts in the global system: depleted fossil fuel reserves, stressed fresh water availability and tension from domestic instability. I conclude by offering a series of next steps that builds upon this work and recommendations for policy planners concerned with the future of interstate relations

Smart traffic control for the era of autonomous driving

This thesis aims to take on the challenges to address some of the key issues in traffic control and management, including intersection protocol design, congestion measurement, selfish routing and road infrastructure automation, under the assumption that all vehicles on the road are connected and self-driving. To design and test traffic control mechanisms for AVs, we introduced a formal model to represent road networks and traffic. Based on this model, we developed a simulation system on top of an existing open-source platform (AIM4) and used it to examine a number of traffic management protocols specifically designed for traffic with fully autonomous vehicles. Simulation outcomes show that traffic management protocols for AVs can be more subtle, sensitive and variable with traffic volumes/flow rate, vehicle safe distance and road configuration. In addition, by analyzing the real-world traffic data and simulation data, we found that measuring congestion with exponential functions has considerable advantages against the traditional BPR function in certain aspects. The deployment of autonomous vehicles provides traffic management with an opportunity of choosing either centralised control or decentralised control. The price of anarchy (PoA) of autonomous decision-making for routing gives an applicable quantitative criterion for selection between them. We extended the existing research on PoA with the ˙class of exponential functions as cost functions. We found an expression for the tight upper bound of the PoA for selfish routing games with exponential cost functions. Unlike existing studies, this upper bound depends on traffic demands, with which we can get a more accurate estimation of the PoA. Furthermore, by comparing the upper-bounds of PoA between the BPR function and the exponential function, we found that the exponential functions yield a smaller upper bound than the BPR functions in relatively low traffic flows. To specify traffic management systems with autonomous roadside facilities, we propose a hybrid model of traffic assignment. This model aims to describe traffic management systems in which both vehicles and roadside controllers make autonomous decisions, therefore, are autonomous agents. We formulated a non-linear optimization problem to optimize traffic control from a macroscopic view of the road network. To avoid the complex calculations required for non-linear optimization, we proposed an approximation algorithm to calculate equilibrium routing and traffic control strategies. The simulation results show that this algorithm eventually converges to a steady state. The traffic control scheme in this steady state is an approximately optimal solution