3,246 research outputs found
Uncertainty behind the veil of ignorance
This paper argues that the decision problem in the original position should be characterized as a decision problem under uncertainty even when it is assumed that the denizens of the original position know that they have an equal chance of ending up in any given individual's place. It argues for this claim by arguing that (a) the continuity axiom of decision theory does not hold between all of the outcomes the denizens of the original position face and that (b) neither us nor the denizens of the original position can know the exact point where discontinuity sets in, because the language we employ in comparing different outcomes is ineradicably vague. It is also argued that the account underlying (b) can help proponents of superiority in value theory defend their view against arguments offered by Norcross and Griffin
Introduction to the Douglass C. North Memorial Issue
This is the accepted version of the following article: Geoffrey M. Hodgson, âIntroduction to the Douglass C. North memorial issueâ, Journal of Institutional Economics, (early view) 1 December 2016, which has been published in final form at DOI: https://doi.org/10.1017/S1744137416000400 ©Cambridge UniversityPress 2016This introduction considers the highly influential contribution of Douglass C. North to economic history and institutional economics, as it developed from the 1960s until his death in 2015. It sketches the evolution of his arguments concerning the roles of institutions, organizations and human agency. Northâs conception of the economic actor became progressively more sophisticated, by acknowledging the role of ideology and adopting insights from cognitive science. Eventually he abandoned the proposition that institutions are generally efficient, to propose instead that sub-optimal institutional forms could persist. A few noted criticisms of Northâs work are also considered here, ranging from those which are arguably off the mark, to others that retain some force. The contributions to this memorial issue are outlined at the end of this introduction.Peer reviewe
A Political Economy of Privatization Contracts : The Case of Water and Sanitation in Ghana and Argentina
This document is the Accepted Manuscript version of the following article: Hulya Dagdeviren, Simon A. Robertson, 'A Political Economy of Privatization Contracts: The Case of Water and Sanitation in Ghana and Argentina', Competition & Change, Vol. 18 (2): 150-163, April 2014. The final, published version is available online at DOI: https://doi.org/10.1179/1024529414Z.00000000053. Published by SAGE.In general, the process and outcomes of privatization have been studied from the point of view of efficiency. In this article, we consider issues in the course of contract design, implementation, management and enforcement in privatized public services and utilities. The study is based on two case studies, involving several water concessions in Argentina and a management contract in the urban water sector in Ghana. Three key arguments are presented on the basis of these case studies. The first is that an individualistic analytical framework is often utilized by the mainstream economic perspectives, but these are inadequate for a comparative assessment of private versus public provision in public services where there are distinct collective or group interests and hence a wider socio-economic context and representation of different interests becomes highly important. Instead, the article proposes a political economy perspective, which pays due attention to distributional issues, group interests, ideology of states and power relations for the assessment of privatization contracts. Second, the administrative capacity of states and their resources play a key role for the outcomes of privatization. Finally, while some contractual issues could be resolved through resourcing and experience over time, others are inherent to the contractual relations with little prospect of remedy.Peer reviewe
Tournament Mechanism in Wine-Grape Contracts: Evidence from a French Wine Cooperative
International audienceThis article analyzes the contractual relationship between a wine cooperative (winery) and its member (growers). This relationship is plagued by moral hazard and adverse selection problems in grape quality. Indeed, growers can be opportunistic since the cooperative is unable to observe: (i) their effort level due to imperfect monitoring technology; (ii) their productive abilities (types) due to adverse selection. Because the growers' vineyard practices and efforts are one of the main determinants of grape quality, the cooperative implements an incentive compensation system to induce growers to provide the maximum effort towards quality. This compensation scheme is similar to that in tournaments (Lazear and Rosen, 1981; Green and Stokey, 1983; Knoeber, 1989; Prendergast, 1999). In our case, the cooperative promotes competition between growers by offering a promotion, while, at the same time, organizing the contest by creating homogenous groups of growers using a menu of contracts and monitoring through regular visits to the vineyard. Using a database of 1219 contracts, we test the effect of: (i) the cooperative's tournament compensation scheme; (ii) the menu of contracts and monitoring mechanism. The results of our econometric estimations provide some confirmation of both effects
On fuzzy frontiers and fragmented foundations : some reflections on the original and new institutional economics
This article has been published in a revised form in Journal of Institutional Economics, doi: https://doi.org/10.1017/S1744137414000307 This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © 2014 Millennium Economics Ltd, published by Cambridge University Press.These reflections are prompted by the papers by Ménard (2014) and Ménard and Shirley (2014). Their essays centre on the path-breaking contributions to the 'new institutional economics' (NIE) by Ronald Coase, Douglass North and Oliver Williamson. In response, while recognising their substantial achievements, it is pointed out that these three thinkers had contrasting views on key points. Furthermore, Ménard's and Shirley's three 'golden triangle' NIE concepts - transaction costs, property rights and contracts - are themselves disputed. Once all this is acknowledged, differences of view appear within the NIE, raising interesting questions concerning its identity and boundaries, including its differences with the original institutionalism. There are sizeable overlaps between the two traditions. It is argued here that the NIE can learn from the original institutionalism, particularly when elaborating more dynamic analyses, and developing more nuanced, psychologically-grounded and empirically viable theories of human motivation.Peer reviewedFinal Accepted Versio
Comparing Successful and Less Successful New Innovative Businesses
This contribution offers a conceptual framework for the analysis of innovative business start-ups. This framework mainly draws on transaction cost theory. On basis of a broad empirical study of 52 hightech business start-ups in Germany the fruitfulness of the transaction cost approach with respect to research on innovation is demonstrated. Transaction cost theory gives valuable hints for the interpretation of the personal role of the entrepreneur as well as for the economic evaluation of the entrepreneurial idea. Special importance refers to the results on the organization of market transactions as a decisive determinant of economic success of innovative business start-ups
Property rights and loss aversion in contests
We analyze the effects of property rights and the resulting loss aversion on contest outcomes. We study three situations: in âgainâ two players start with no prize and make sunk bids to win a prize; in âlossâ both the players start with prizes and whoever loses the contest loses their prize; and in âmixedâ only one player starts with a prize that stays with him if he wins, but is transferred to the rival otherwise. Since the differences among the treatments arise only from framing, the expected utility and the standard loss aversion models predict no difference in bids across treatments. We introduce a loss aversion model in which the property rights are made salient, and as a result the reference point varies across treatments. This model predicts average bids in descending order in the loss, the mixed, and the gain treatment; and higher bids by the player with property rights in the mixed treatment. The results from a laboratory experiment broadly support these predictions. There is no significant difference in bids in the loss (gain) treatment and bids by property rights holder (nonholder) in the mixed treatment. A model incorporating both loss aversion and social preferences explains this result
Model of macroeconomic evolution in stable regionally dependent economic fields
We develop a model for the evolution of economic entities within a
geographical type of framework. On a square symmetry lattice made of three
(economic) regions, firms, described by a scalar fitness, are allowed to move,
adapt, merge or create spin-offs under predetermined rules, in a space and time
dependent economic environment. We only consider here one timely variation of
the ''external economic field condition''. For the firm fitness evolution we
take into account a constraint such that the disappearance of a firm modifies
the fitness of nearest neighboring ones, as in Bak-Sneppen population fitness
evolution model. The concentration of firms, the averaged fitness, the regional
distribution of firms, and fitness for different time moments, the number of
collapsed, merged and new firms as a function of time have been recorded and
are discussed. Also the asymptotic values of the number of firms present in the
three regions together with their average fitness, as well as the number of
respective births and collapses in the three regions are examined. It appears
that a sort of selection pressure exists. A power law dependence,
signature of self-critical organization is seen in the birth and collapse
asymptotic values for a high selection pressure only. A lack of
self-organization is also seen at region borders.Comment: 11 figures double columns on 7 page
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