A simple version and extension of Arrow’s Theorem in the Edgeworth Domain

This paper presents an Arrow-type result which can be simply demonstrated to hold within the standard domain of welfare economics: in the (m×n) Edgeworth Box, a best allocation must assign all goods to a single individual. Allowing the Social Welfare Function to take account of envy-freeness, or other related constructions, does not significantly resolve this problem.Arrow; Social Welfare Function; Edgeworth Box; Envy-Freeness.

Are People in Groups More Farsighted than Individuals?

A dynamic decision making experiment recently conducted on individuals suggested that people may look ahead but seem either unable or unwilling to predict their own future behaviour. In order to distinguish between these two possibilities, we repeated the experiment with pairs of individuals. The experiment consisted of two decision nodes (interleaved with two chance nodes), with one of the pair choosing at the first decision node and the second of the pair choosing at the second. Given the structure of the experiment, it was simple for the first player to predict the decisions of the second player. Nevertheless, the decisions of the first player indicate strongly that the first player does not in fact do so. It seems that people are unwilling to predict not only their own future behaviour but also the future behaviour of others.Planning; prediction; dynamic decision making; pairs; individuals

What Price Compromise? Testing a Possibly Surprising Impliction of Nash Bargaining Theory

This paper provides a very simple experimental test of a prediction of Nash Bargaining Theory that seems counterintuitive. The context is a simple bargaining problem between two players who have to agree a choice from three alternatives. One alternative favors one player and a second favors the other. The third is a fair compromise, but is excluded as an agreed choice by Nash Bargaining Theory. Our experimental results show that agreement on this third outcome occurs rather often. So the Nash theory is not well-supported by our evidence, although neither is a Strategic explanation of the data. The Nash-precluded outcome appeals because of its compromise nature; indeed, players are prepared to pay a price which is (according to the Nash theory) irrationally high, in order to reach a fair compromise.

A Simple Risk-Sharing Experiment

This paper reports on an experiment designed to test whether pairs of individuals are able to exploit efficiency gains in the sharing of a risky financial prospect. Observations from a previous experiment had suggested a general rejection of efficiency in favour of ex post equality. The present experiment explores some possible explanations for this. The results indicate that fairness is not a significant consideration, but rather that having to choose between prospects diverts partners from allocating the chosen prospect efficiently.Risk-sharing; experiments; bargaining, fairness.

What Price Compromise? Testing a Possibly Surprising Implication of Nash Bargaining Theory

This paper identifies, and tests experimentally, a prediction of Nash Bargaining Theory that may appear counterintuitive. The context is a simple bargaining problem in which two players have to agree a choice from three alternatives. One alternative favours one player and a second favours the other. The third is an apparently reasonable compromise, but is in fact precluded as an agreed choice by the axioms of Nash Bargaining Theory. Experimental results show that agreement on this third alternative occurs rather often. So the axiomatic Nash theory is not well-supported by our evidence. Our subjects' behaviour could be interpreted as the paying of an irrationally (according to the Nash theory) high price in order to reach a compromise agreement.Experiments, Nash Bargaining Theory

Do People Plan?

We report the results of an experimental investigation of a key axiom of economic theories of dynamic decision making – namely, that agents plan. Inferences from previous investigations have been confounded with issues concerning the preference functionals of the agents. Here, we present an innovative experimental design which is driven purely by dominance- if preferences satisfy dominance, we can infer whether subjects are planning or not. We implement three sets of experiments: the first two (the Individual Treatments) in which the same player takes decisions both in the present and the future; and the third (the Pairs Treatment) in which different players take decisions at different times. The two Individual treatments differed in that, in one, the subjects played sequentially, while, in the other, the subjects had to pre-commit to their future move. In all contexts, according to economic theory, the players in the present should anticipate the decision of the player in the future. We find that over half the participants in all three experimental treatments do not appear to be planning ahead; moreover, their ability to plan ahead does not improve with experience, except possibly when we force subjects to pre-commit to their future decision. These findings identify an important lacuna in economic theories, both for individual behaviour and for behaviour in games.

Stability and equilibrium in decision rules: an application to duopoly

This paper analyses an indefinitely-repeated Cournot duopoly. Firms select simple dynamic decision rules which, taken together, comprise a first-order linear difference equation system. A boundedly-rational objective function is assumed, by which the firm’s payoff is its profit at the point of convergence, if any. Stable Nash equilibria are characterised and located in output space, stability in this context being equivalent to subgame-perfection. Comparable results are derived for a conventional discounted-profit objective function, where this equivalence does not hold, but where stability may nevertheless be of intrinsic interest. In either context, stability is incompatible with joint profit maximisation.

Neoliberal precarity and primalization : A biosocial perspective on the age of insecurity, injustice, and unreason

Peer reviewedPostprin

Rediscovering the ‘Noble Savage’ : The Rewilding Movement and the Re-Enchantment of the Scottish Highlands

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Scotland and England’s Colliding Nationalisms : Neoliberalism and the Fracturing of the United Kingdom

Peer reviewedPostprin