Models in Economics Are Not (Always) Nomological Machines: A Pragmatic Approach to Economists’ Modeling Practices

International audienceThis paper evaluates Nancy Cartwright’s critique of economic models. Cartwright argues that economics fails to build relevant “nomological machines” able to isolate capacities. In this paper, I contend that many economic models are not used as nomological machines. I give some evidence for this claim and build on an inferential and pragmatic approach to economic modeling. Modeling in economics responds to peculiar inferential norms where a “good” model is essentially a model that enhances our knowledge about possible worlds. As a consequence, models and experiments are very different knowledge-producing devices, at least in economics

A FRAMEWORK FOR COMMUNITY-BASED SALIENCE: COMMON KNOWLEDGE, COMMON UNDERSTANDING AND COMMUNITY MEMBERSHIP

International audienceThis article presents a community-based account of salience as an alternative and a complement to the ‘natural salience’ approach which is endorsed by almost all game theorists who use this concept. While in the naturalistic approach, salience is understood as an objective and natural property of some entities (events, strategies, outcomes), the community-based account claims that salience is a function of community membership. Building on David Lewis’s theory of common knowledge and on some of its recent refined accounts, I suggest that salience acts as a correlating device in a correlated equilibrium. What is constitutive of salience is common understanding, the fact that agents have common knowledge that they share the same modes of reasoning with respect to a well-identified set of events. I argue that the basis for common understanding is community membership. The relevance of this account stems from the fact that it answers the objection that salience is either unnecessary or unable to account for coordination between rational agents

How to Interpret Belief Hierarchies in Bayesian Game Theory: A Dilemma for the Epistemic Program

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Did Veblen Generalize Darwinism (And Why Does It Matter)?

International audienceThis paper examines the claim that Veblen's theory of cultural evolution has generalized Darwinian principles to socioeconomic phenomena. Our argument takes place in the debate around "generalized Darwinism" in evolutionary and institutional economics. We claim that Veblen frequently relied on the concept of selection and considered institutions both as units and as factors of selection. We also argue that some of Veblen's insights can be clarified by expressing them in evolutionary-game theoretic terms. Thus, we suggest a close connection between the ontological framework of generalized Darwinism and the technical study of evolutionary phenomena through evolutionary game theory

Accounting for constitutive rules in game theory

International audienceGame theory and rules are deeply intertwined for at least two reasons: first, in many cases rules are necessary to break the indeterminacy that surrounds most of the games; second, in the past 30 years game theory has been increasingly used as a major tool to build a theory of social rules. Interestingly, though the concept of rules is now part of most game theorists' tool box, none of them has explicitly entertained the important distinction between regulative rules and constitutive rules. This distinction, which finds its roots in Ludwig Wittgenstein's profound discussion of ‘language games’, is at the core of modern philosophy of social sciences. This article asks whether game theory can account for constitutive rules. I distinguish between three game-theoretic accounts of rules: the rules-as-behavioral-regularities account, the rules-as-normative-expectations account, and the rules-as-correlated-devices account. I show that only the latter two are able to make sense of constitutive rules by giving up any pure individualistic understanding of game theory

Neo-Samuelsonian Welfare Economics: From Economic to Normative Agency

International audienceThis paper explores possible foundations and directions for “Neo-Samuelsonian Welfare Economics” (NSWE). I argue that neo-Samuelsonian economics entails a reconciliation problem between positive and normative economics due to the fact that it cuts the relationship between economic agency (i.e. what and who the economic agent is) and normative agency (i.e. what should the locus of welfare analysis be). I explore two possibilities and argue that both are attractive but have radically different implications for the status of normative economics. The first possibility consists in fully endorsing a normative approach in terms of “formal welfarism” which is completely neutral regarding both the locus and the unit measure of welfare analysis. The main implication is then to make welfare economics a branch of positive economics. The second possibility is to consider that human persons should be regarded as axiologically relevant because while they are not prototypical economic agents, they have the ability to represent them both to themselves and to others as reasonable and reliable beings through narrative construction processes. This gives a justification for viewing well-being as being constituted by the persons’ preferences, but only because these preferences are grounded on reasons and values defining the identity of the persons.Cet article envisage deux types de fondements possibles pour une « économie du bien-être néo-samuelsonnienne ». On défend l’idée que l’approche néo-samuelsonnienne en économie mène à un problème de réconciliation entre l’économie positive et l’économie normative, en raison du fait que l’agent économique n’est plus nécessairement l’unité normativement pertinente. Deux formes de réconciliation ayant des implications radicalement différentes pour le statut de l’économie normative sont envisagées. La première consiste à adopter une approche normative en termes de « welfarisme formel » prétendant à une complète neutralité quant à l’identité du sujet et l’unité de mesure de l’analyse normative. L’implication principale est de faire de l’économie du bien-être une branche de l’économie positive. Une seconde approche consiste à une donner une importance axiologique particulière aux personnes, non parce qu’elles sont des prototypes d’agents économiques, mais parce qu’elles sont dotées de la capacité de se représenter, auprès des autres et d’elles-mêmes, comme des entités raisonnables au travers de processus de construction narrative. Cette capacité donne une justification à la vision selon laquelle le bien-être est constituée des préférences d’une personne, dans le sens où ces préférences sont fondées sur des raisons et valeurs définissant l’identité personnelle

Vers un changement de paradigme en économie ? Une réponse à James K. Galbraith

Published Books&Ideas, 06/17/2010D’où viendra le renouveau de la théorie économique ? De ses marges ou de son centre ? En réponse à l’essai de James K. Galbraith, Cyril Hédoin soutient que la science économique comporte déjà en son sein des approches novatrices qui permettent de comprendre des phénomènes tels que la crise financière

Quand nos comportements déroutent les économistes

Review of G. Saint-Paul’s The Tyranny of Utility, Reprinted in Problèmes économiques, n° 3044, May 2012En s’appuyant sur des travaux de psychologie expérimentale, l’économie comportementale remet aujourd’hui en cause les fameuses hypothèses de rationalité de l’homo oeconomicus. Cependant, Gilles Saint-Paul met en garde contre le risque de paternalisme qui pourrait dériver de ces avancées théoriques

From Utilitarianism to Paternalism: When Behavioral Economics meets Moral Philosophy

International audienceMost behavioral economists take the normative implications of their experimental findings to be broadly paternalistic. They tend to suggest that the results of behavioral economics logically entail the extension of the set of public interventions on the market. In this article, I show that this conclusion follows from an implicit normative reasoning that is unsustainable because behavioral economists remain committed to standard welfare economics. I suggest that the behavioral economists’ defense of paternalism can be understood as an attempt to maximize a social welfare function taking into account the fact that individuals make incoherent choices. But this defense depends on a theory of rational preferences that behavioral economists do not have. Moreover, a defense of paternalism in a welfarist framework leads to downplay the agency dimension of persons. Alternative defenses of soft paternalism may exist but likely require that normative behavioral economics gives up welfarism.La plupart des économistes comportementaux considèrent que leurs résultats expérimentaux ont des implications normatives de nature paternalistes. Ces derniers tendent en effet à défendre l’idée que les résultats de l’économie comportementale impliquent logiquement l’extension du champ d’intervention de l’État dans le fonctionnement de l’économie de marché. Cet article montre que cette conclusion dépend d’un raisonnement normatif implicite difficilement défendable en raison de l’adhésion de l’économie comportementale à l’économie du bien-être standard. On propose une reconstruction de la défense du paternalisme par les économistes comportementaux en termes de fonction de bien-être social comportementale à maximiser et tenant compte du fait que les individus font des choix incohérents. Cependant, cette défense nécessite une théorie des préférences rationnelles dont l’économie comportementale est dépourvue. Il est de plus montré que la défense du paternalisme dans un cadre welfariste amène à ignorer la dimension de la personne en tant qu’agent. D’autres défenses du paternalisme sont envisageables mais elles impliquent en toute probabilité l’abandon par l’économie comportementale normative du welfarisme