An interview with Thomas C. Schelling: Interpretation of game theory and the checkerboard model

This note is mainly based on a short interview with Thomas C. Schelling (TCS), who shared the Nobel Prize with Robert J. Aumann in 2005. The interview took place on 06.03.2001 at University of Maryland, College Park, USA. It consists of two parts. The first part is about his interpretation of game theory, particularly about the use of game-theoretic models in explaining the origin and maintenance of conventions, and norms. The second part is on the origin of Schelling's influential checkerboard model of residential segregation, particularly about his approach to modeling social phenomena exemplified by this model. The note ends with some concluding remarks.checkerboard model

Invisible Hand Explanations: the Case of Menger's Explanation of the 'Origin of Money'

Menger's explanation of the 'Origin of Money' is one of the paradigmatic examples of invisible hand explanations. This paper examines Menger's explanation in detail and comments on the characteristics of invisible hand explanations.invisible hand, invisible hand explanations, Menger, origin of Money, Explanation

An interview with Thomas C. Schelling: Interpretation of game theory and the checkerboard model

This note is mainly based on a short interview with Thomas C. Schelling (TCS), who shared the Nobel Prize with Robert J. Aumann in 2005. The interview took place on 06.03.2001 at University of Maryland, College Park, USA. It consists of two parts. The first part is about his interpretation of game theory, particularly about the use of game- theoretic models in explaining the origin and maintenance of conventions, and norms. The second part is on the origin of Schelling’s influential checkerboard model of residential segregation, particularly about his approach to modeling social phenomena exemplified by this model. The note ends with some concluding remarks. Citation: Aydinonat, N. Emrah, (2005) 'An interview with Thomas C. Schelling: Interpretation of game theory and the checkerboard model,' Economics Bulletin, Vol. 2 no. 2 pp. 1-7.Thomas Schelling, game theory, checkerboard model

Institutions: Theory, History and Context-Specific Analysis

A review essay on Avner Greif, Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge, Cambridge University Press, 2006, xx+503

Is the Invisible Hand un− Smithian? A Comment on Rothschild

Rothschild (2001) argues that the invisible hand refers to blind individuals and presume privileged knowledge on the part of the social scientist. For this reason, she takes it that the invisible hand is, in fact, an un− Smithian concept and that Smith was making an ironical joke. In this brief comment, I argue that the invisible hand does not imply blind and futile individuals or privileged knowledge and it cannot be argued that it is an un− Smithian concept on these grounds. Briefly, it is argued here that although it may be true that Smith used the invisible hand somewhat ironically, this does not imply that it is un− Smithian.

Philosophy of Economics Rules : introduction to the symposium

Economists have long been criticized for their use of highly idealized models. In Economics rules: Why economics works, when it fails, and how to tell the difference [Oxford: Oxford University Press, 2015] Dani Rodrik responds to this criticism by offering an account of models that emphasizes the diversity of models in economics. Rodrik’s account presents a rare opportunity for economists and philosophers of economics to engage in a mutually beneficial exchange that could improve our understanding of the power and limits of economics, and the rights and wrongs of the dismal science. The symposium on Rodrik’s Economics Rules is the first attempt to seize this opportunity.Peer reviewe

The Diversity of Models as a Means to Better Explanations in Economics

In Economics Rules, Rodrik [(2015). Economics rules: Why economics works, when it fails, and how to tell the difference. Oxford: Oxford University Press] argues that what makes economics powerful despite the limitations of each and every model is its diversity of models. Rodrik suggests that the diversity of models in economics improves its explanatory capacities, but he does not fully explain how. I offer a clearer picture of how models relate to explanations of particular economic facts or events, and suggest that the diversity of models is a means to better economic explanations.Peer reviewe

Institutions: Theory, History and Context-Specific Analysis

A review essay on Avner Greif, Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge, Cambridge University Press, 2006, xx+503.Institutions; History; Game Theory; Context Specific Analysis

Explanatory Value in Context : The Curious Case of Hotelling’s Location Model

There is a striking contrast between the significance of Harold Hotelling’s contribution to industrial economics and the fact that his location model was invalid, unrealistic and non-robust. It is difficult to make sense of the explanatory value of Hotelling’s model based on philosophical accounts that emphasize logical validity, representational adequacy, and robustness as determinants of explanatory value. However, these accounts are misleading because they overlook the context within which the explanatory value added of a model is apprehensible. We present Hotelling’s model in its historical context and show why it is an important and explanatory model despite its apparent deficiencies.Peer reviewe

Game Theoretic Models as a Framework for Analysis: The Case of Coordination Conventions

This paper examines game theoretic models of coordination conventions. Firstly, the paper shows that static models of coordination cannot explain the emergence of coordination conventions. The best interpretation of these models is that they study the conditions under which coordination is possible. The examination of these conditions suggests that history and existing institutions are important in the process of emergence of institutions. Secondly, an examination of dynamic models of coordination conventions reveals that some of these models explicate some of the ways in which coordination may be brought about in the model world. Nevertheless, consideration of these models fortifies the point that history and existing institutions are crucial for explaining the emergence of conventions in the real world. Based on these observations, the paper suggests that game theory as a framework of analysis is the best possible interpretation of game theoretic models of coordination conventions.Game Theory; Coordination; Convention