On the Explanatory Value of Inequity Aversion Theory

In a number of papers on their theory of Inequity Aversion, E. Fehr and K. Schmidt have claimed that the theory explains the behavior in many experiments. By virtue of having an infinite number of parameters the theory can predict a wide range of outcomes, from the competitive to the cooperative. Its prediction depends on values of these parameters. Fehr & Schmidt provide no explicit methodological plan for their project and as a result they repeatedly make logical and methodological errors. We look at the methodology of their explanations and find that no connection has been established between the experimental data and the behavior predicted by the theory. We conclude that the theory of inequity aversion has no explanatory value beyond its trivial capacity to predict a broad range of outcomes as a function of its parameters

Vortex-strings in N=2 quiver X U(1) theories

We study half-BPS vortex-strings in four dimensional N=2 supersymmetric quiver theories with gauge group SU(N)^n X U(1). The matter content of the quiver can be represented by what we call a tetris diagram, which simplifies the analysis of the Higgs vacua and the corresponding strings. We classify the vacua of these theories in the presence of a Fayet-Iliopoulos term, and study strings above fully-Higgsed vacua. The strings are studied using classical zero modes analysis, supersymmetric localization and, in some cases, also S-duality. We analyze the conditions for bulk-string decoupling at low energies. When the conditions are satisfied, the low energy theory living on the string's worldsheet is some 2d N=(2,2) supersymmetric non-linear sigma model. We analyze the conditions for weak to weak 2d-4d map of parameters, and identify the worldsheet theory in all the cases where the map is weak to weak. For some SU(2) quivers, S-duality can be used to map weakly coupled worldsheet theories to strongly coupled ones. In these cases, we are able to identify the worldsheet theories also when the 2d-4d map of parameters is weak to strong.Comment: 61 pages, 10 figure

Contract Enforcement and Institutions among the Maghribi Traders: Refuting Edwards and Ogilvie

Edwards and Ogilvie dispute the empirical basis of the view that a multilateral reputation mechanism mitigated agency problems among the eleventh-century Maghribi traders. They allege that the relations among merchants and agents were founded in law. This paper refutes this assertion using comprehensive quantitative analyses of all available primary sources and a careful review of the documents and the literature Edwards and Ogilvie cite. Among recent new quantitative findings reported: (1) less than one percent of the documents’ content is devoted to legal activity on any matter. (2) The legal system was mainly used for mandatory, non-trade related matters. (3) The documents reflect thousands of agency relations but there are less than six court documents possibly reflecting its use in agency disputes. (4) A ten percent random sample of all the documents finds no trade-related legal actions among Maghribis beyond those in the court documents. (5) About 75 percent of agency relations were not based on a legal contract. The paper also reaffirms the accuracy of Greif’s documentary examples and sheds light on the roles of the legal system and reputation mechanism during this period.multilateral reputation mechanism, Maghribi traders, Edwards and Ogilvie

Contract enforcement and institutions among the Maghribi Traders: Refuting Edwards and Ogilvie

Edwards and Ogilvie (2008) dispute the empirical basis for the view (Greif, e.g., 1989, 1994,2006) that multilateral reputation mechanism mitigated agency problems among the eleventh-century Maghribi traders. They assert that the relations among merchants and agents were law-based. This paper refutes this assertion using quantitative and documentary evidence thereby vindicating the position that the legal system had a marginal role in mitigating agency problems in long-distance trade in this historical era. Edwards and Ogilvie constantly present legal actions in non-trade related legal cases as evidence for a reliance on the legal system for matters pertaining to long-distance trade. Their criticism of Greif’s documentary analysis also fails scrutiny. The claim that merchants' relations with their overseas agents were law-based is wrong. This paper is based on quantitative analyses of the corpuses containing the hundreds of documents on which the literature relies and a careful review of the documents and the literature Edwards and Ogilvie cite. Their assertion is shown to be based on unrepresentative and irrelevant examples, an inaccurate description of the literature, and a consistent misreading of the few sources they consulted. In particular, their examples for the use of the court are mainly taken from mandatory legal procedures associated with sorting out the assets and liabilities of deceased traders’ estates. Such examples do not support the claim that agency relations were law-based. The quantitative analysis reveals that empirical basis for the multilateral reputation view is stronger than originally perceived. This paper also sheds light on the roles of the legal system and reputation mechanism during this period.institutions; contract-enforcement; reputation; Maghribi traders; agency relations