Evolution and Economics

“How humans became intelligent”

Human neurons are simple, but they are organised in a complicated and functional structures, which comes from a Darwinian natural selection:beneficial mutations are preserved and harmful ones weeded out. Thus there’s the “competence without comprehension”: rationale of behaviour is implicit in the creatures’ design (default in nature) but not represented in their minds. The human intelligence and consciousness, on the other hand, have been enhanced by a process of cultural evolution operating on memes (copyable behaviour like words), in which some gave humans powerful new competences (like an app) and thus are adapted by human brain, leading to a co-work of genetic and memetic evolution.

Please, Not Another Bias! The Problem with Behavioral Economics – An evolutionary take on behavioral economics

“Behavioural economics has some similarities to the state of astronomy in 1500 – it is still at the collection of deviation stage. There aren’t 165 human biases. There are 165 deviations from the wrong model. So what is this unifying theory? I suggest the first place to look is evolutionary biology. Human minds are the product of evolution, shaped by millions of years of natural selection.”

A hierarchy of decision making: place evolutionary biology in a hierarchy of possible ways to consider the mind
1. perfectly rational decision maker, homo economicus: unbounded rationality.
→ If you have been to enough behavioural economics presentations, you have already seen this model beaten to death.
2.a model of decision making under constraints – a model provided by economists in response to some of the behavioural critiques: add costs to information search + possibly some limits to computational power
→ even less realistic version of how people actually think
3. heuristics and biases program of behavioural economics
→ the search for “cognitive illusions” (Gigerenzer)
4. ecological rationality
→ is very similar to an evolutionary approach, minus one important feature

Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: the recognition heuristic. Psychological review, 109(1), 75.Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: the recognition heuristic. Psychological review, 109(1), 75.

Smith, V. L. (2003). Constructivist and ecological rationality in economics. The American Economic Review, 93(3), 465-508.Smith, V. L. (2003). Constructivist and ecological rationality in economics. The American Economic Review, 93(3), 465-508.

Todd, P. M., & Gigerenzer, G. (2012). Ecological rationality: Intelligence in the world. OUP USA.

“Gigerenzer’s approach to be superior to the biases and heuristics or “cognitive illusions” approach, but it still leaves open the question of where these heuristics and other decision making tools come from.”
5. evolutionary rationality: the toolbox that we use today has been honed by millennia of natural selection. ++ humans are cultural and well as biological creatures.
→ That we have a range of universal instincts and preferences shaped by natural selection does not say that culture is not important. What we see is a combination of evolved preferences, social norms, technologies and the like, each interacting with and shaping the others.

“evolution shapes proximate mechanisms that lead to that ultimate goal (survival or reproduction). And consumer preferences are manifestations of our innate needs and preferences.”

“Our evolved traits and preferences were shaped in times vastly different to today. … This backfiring of our evolved traits and preferences is known as mismatch. Our evolved traits do not always match the new modern environment – and this is something that makes Gigerenzer’s model of looking at the interaction of the decision making tools with the environment such a useful tool for analysis. Sometimes the tool works. Sometimes it doesn’t.”

(Are Modern Businesses a Mismatch?: More than 99% of human evolution took place within small scale societies – egalitarian hunter-gatherer groups of 50-150 individuals that roamed the savannahs looking for food and safety. These were societies without laws, institutions, and complex technology. Behaviors were guided by habits, cultural norms, and informal leaders. Only since the agricultural revolution that took place some 10,000 years ago – the last 1% of human evolution – did our societies grow in scale and complexity. The Industrial Revolution that paved way for the modern business environment is even more recent. → multi-layered decision-making hierarchies, formal rules of conduct, evolved trust and cooperation based from frequent face-to-face interactions to  … )

“the most important findings in evolutionary psychology – our decision-making changes with the immediate context. Evolution has not shaped an all-knowing computer, but rather a modular computer for making different decisions based on different contexts.”

“Costly signalling: … But in the mid-1970’s an evolutionary biologist, Amotz Zahavi, proposed that signals such as peacock tails can be a trusted as they handicap the bearer. Only a high quality peacock can bear the cost. … This handicap principle also applies to human signalling. When humans are seeking a mate, you want to know as much as you can about them. … The most obvious example of this type of signalling is conspicuous consumption. Conspicuous consumption is a signal of resources and the traits required to acquire those resources. …Of course, signalling involves far more than conspicuous consumption. We don’t only signal resources, but want to signal intelligence, conscientiousness, agreeableness or other features. … Importantly, good signals are difficult to fake.the handicap is what makes the signal reliable.”

“So when a man sees a billboard with an attractive woman on a billboard, it gets attention. And from an evolutionary perspective, this is exactly the sort of thing that would draw attention. In our evolutionary past, an attractive woman would have been right there – you might think you are in with a shot.”

To sum up
1] Obviously, to understand humans you need to understand our evolutionary past.
2] a large part of our evolved behaviour involves our desire to signal important traits and qualities to potential mates, allies and rivals.
3] our evolved minds are sometimes out-of-sync with our modern environments. Use Gigerenzer’s framework (or Herbert Simon’s scissors) – what are the decision making tools we have evolved to use, what is the environment we intend to use them in, and what is the resulting decision?

 

 

Cosmides, L., & Tooby, J. (1994). Better than rational: Evolutionary psychology and the invisible hand. The American Economic Review, 84(2), 327-332.Cosmides, L., & Tooby, J. (1994). Better than rational: Evolutionary psychology and the invisible hand. The American Economic Review, 84(2), 327-332.

 

The Invisible Hook: How Pirate Society Proves Economic Self-Interest Wrong

“Hayek pioneered the concept of economic systems as products of cultural group selection … serious updating is required … into alignment with the best of our current knowledge of cultural multilevel selection.”

“When I read The Invisible Hook … the overarching theme that everything can be explained as a form of self-interest … it meant that every nuance of pirate behavior—their fairness toward each other, their highly selective cruelty toward their victims, even the Jolly Roger as a costly signal, can be explained as a form of profit maximizing behavior … For me, the central lesson to be learned is that the concept of individual self-interest is incoherent. That is arguably the major problem with economics and the major contribution that Multilevel Selection Theory can make in providing a more coherent alternative.”

 

 

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What is Evolutionary Economics? /  What is an economy?

Evolutionary Economics is a field which looks at the economy as an evolutionary system, not a system constantly in or tending toward equilibrium.Evolutionary Economics is a field which looks at the economy as an evolutionary system, not a system constantly in or tending toward equilibrium.

Witt, U. (2008). What is specific about evolutionary economics?. Journal of Evolutionary Economics, 18(5), 547-575.

 

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Self-control in economics

From Wiki

In economics, dynamic inconsistency or time inconsistency is a situation in which a decision-maker’s preferences change over time in such a way that a preference can become inconsistent at another point in time. This can be thought of as there being many different “selves” within decision makers, with each “self” representing the decision-maker at a different point in time; the inconsistency occurs when all preferences are not aligned.

The term “dynamic inconsistency” is more closely affiliated with game theory:
subgame imperfect: inconsistency is primarily about commitment and credible threats:
a situation in a dynamic game where a player’s best plan for some future period will not be optimal when that future period arrives → E.g. the present self of the firm has preferences that would have the future self be committed to the threat to cut price, but the future self has preferences that have it not carry out the threat. Hence, the dynamic inconsistency.

The term “time inconsistency” is more closely affiliated with behavioral economics:
how each different self of a decision-maker may have different preferences over current and future choices: “immediacy effect” or “temporal discounting”: “now” has especially high value compared to any future time → relates to a variety of topics including procrastination, addiction, efforts at weight loss, and saving for retirement → different discount ratio placed on the utilities of each self

Behavioral economics:

An economic theory of self-control RH Thaler, HM Shefrin – Journal of political Economy, 1981

Temptation and self‐control F Gul, W Pesendorfer – Econometrica, 2001

Dynamic inconsistency and self-control: A planner–doer interpretation R Benabou, M Pycia – Economics Letters, 2002

A dual-self model of impulse control JM Greer, DK Levine – The American Economic …, 2006

Self-control about consumption

Time-inconsistent preferences and consumer self-control SJ Hoch, GF Loewenstein – Journal of consumer research, 1991

Contract design and self-control: Theory and evidence S DellaVigna, U Malmendier – The Quarterly Journal of …, 2004

Self‐control and the theory of consumption F Gul, W Pesendorfer – Econometrica, 2004

Game theory

Self-control and saving D Laibson – unpublished, Harvard University May, 1994

Games with time inconsistent players Y Sarafidis – 2006

 

A. Greif: Economic Institution through Economic History

“Institutions and Transactions” in Institutions and The Path to The Modern Economy, Greif, 2006

Institution: a system of social factors (i.e. rules, beliefs, norms, and organizations) that together generate a regularity of social behavior (i.e. motivate, enable and guide individuals to follow one behavior among the many technologically feasible ones in social situations) but are exogenous to each individuals
(e.g. a legal system where behavior is guided by rules and motivated by beliefs in legal sanctions, which is sustained by organizations)

 


Contract enforceability and economic institutions in early trade: The Maghribi traders’ coalition A Greif – The American economic review, 1993

Introduction

economic growth like the late-medieval European commercial revolution from 11th-14th centries ← ever-expanding exchange relations ← enhanced ability to exchange ← historical institutional developments /institutional evolution:

e.g.1. merchant courts at 12th&13th: supported impersonal exchange ← by providing incentive for gathering info, honoring agreements, reporting disputes, and adhering to judgments + lowering transaction cost by centralizing certain record-keeping functions and permitting only good standing merchants (Milgrom et al. 1990)

e.,g.2. merchant guild: enabling rulers to commit to the security of alien merchants (← bilateral and uncoordinated multilateral reputation mechanisms failed to overcome commitment problem → cost to ruler of [abusing the rights of “marginal traders”] < [of deterring abuse] ← merchant guild increased this former cost) + coordinating merchants’ response to transgression + ensuring solidarity of incentives among merchants (Greif, 1992)

An institution that solve the commitment problem intrinsic in the relationship between principals and agents:
a merchant need to handling of his goods abroad → travel or hiring overseas agents → agents more efficient: save time and risk of traveling + diversification ← but opportunism of embezzling goods (moral hazard/hold-up) → no efficient cooperation

<= institution to overcome: agency relations governed by a coalition:
an individual trader’s choice (constrained and supported by) ← [ reputation mechanism ← expectations + implicit contractual relations + a specific info-transmission mechanism ] | [] = reinforcing + led to entry and exit barriers => ensuring sustainability of the organization

Historical source: geniza: 1000 contracts, price lists, traders’ letters, accounts… of 11th trade in the Muslim Mediterranean = Maghribi traders’ correspondence
→ not generate hypotheses that can be verified statistically
→ but employs historical documents to evaluate agents’ commitment problem + then use this info to construct an explicit game-theoretical model → recognize the equilibrium strategies ← identified by statements from historical records

=> captures the essence/nature + generate extended/general predictions ← confronted with historical evidence

1. Background: Commerce, Overseas Agents, and Efficiency

11th century Mediterranean trade was free, private and competitive, with no official restrictions → but with uncertainty: large price variation (as production and communication technologies + commercial relations between different regions around the Mediterranean) + risk in voyage

Maghribi traders: descendants of Jewish trades who left the increasingly politically insecure Baghdad and emigrated to North Africa during 10th century (thus Jewish Muslim) + operated mainly in the west of Mediterranean and invested a lot in merchandise + as time passed they expanded their trade from Spain to Constantinople → uncertainty and complexity of trade → operated through overseas agents who provided many trade-related services → reduce the cost and risk of trade

**Agency relations were extremely flexible: **merchants operated through several agents at the same time and region + initiating and canceling easily

=> operating/cooperation through agents was efficient and crucial

2. The commitment Problem and Reputation-Based Community Enforcement Mechanism

Commitment Problem in Agency relations:
opportunism due to asymmetric information + unobservable action → a need for supporting institution → ensuring that agent could commit himself ex ante + be honest ex post
→ such an institution existed ← prevalence of agency relation with trust + only a handful of documents about misconduct
← not by legal system → agency relations were not based on legal contracts + court operation were time-consuming and expensive + nonverifiability

To solve the asymmetric information:
Maghribi merchants in different trade centers were associated + reciprocate in the supply of trade-related information and experience → this information flows mitigated information asymmetry and enabled to monitor agent imperfectedly

The theory of repeated games with imperfect monitoring:
by paying agent a wage high enough when honest + making future employment conditional on past conduct → PV of being honest > cheating and facing unemployment
→ agent will be honest ex ante and acquire reputation + merchant know it ex ante and trust
← potential punishment maybe not sufficient → collective punishment
→ only imperfect monitoring gives a probability that a honest agent will be misjudged as cheater

**Historical documents reflect how Maghribi traders’ repose to suspicions of cheating agent: **
1] a reputation mechanism governed agency relations (judging, punishing, enforcing)
​ – merchants conditioned future employment on past conduct and practiced community punishment
2] agents were ready to forgive current gain sustain good standing

Question:
Why was coordinated punishment effective and self-enforcing?
=> exact nature of the institution that governed agency relations

3. Model: The Agent Commitment Problem and Multilateral Punishment Strategy

Modeling on actual function of historical institution: assumptions: justifiable by historical evidence + the fewest additional assumptions
→ thus not impose the assumption of the most intuitive explanation for collective punishment : model based asymmetric information regarding agents’ typeassuming merchants perceived an agent who cheated to be “bad type” who would keep on cheating in the future if hired (Milgrom&Roberts 1982)

← 1] no such evidence + no indirect justification that an agent who had proved honest in the past was considered to be more likely to be honest in the future → evidence that suggest merchants were likely to participate in collective punishment even when believing agent was honest
← 2] not justified by historical phenomena: no agency relations with Jewish Italian merchants though very profitable if ignoring agency cost ← agent type model explain by a) imposing strategies contingent on social affiliations or b) unable to verify whether a member of other group ever cheated ← not appealing: a) no Jews discrimination; b) info could be easily verified

**=> **not a model of repeated reputational model based on agents’ types but efficiency-wage complete-information model of agent’s commitment problem → another mechanism which can support collective punishment and account for other historical phenomena
→ (whatever the importance of asymmetric information regarding agents’ type) efficiency-wage complete-information model shows that cp is feasible due to availability of information + cp is self-enforcing due to a link between expectations of future hiring and the stream of rent required to keep an agent honest
**(thus no imperfect monitoring → no capture on asymmetry and imperfectness of information, as well as commercial uncertainty → can be extended)

A Principal agent economy with perfect and complete information in infinite periods:

MM merchants: can hire an agent from the unemployed agents in each period, if not hire then receives \kappa>0κ>0 , if hires then offer a wage WW . After each period, they can decide whether to terminate the agent relationship, which could also be terminated due to some exogenous reason with possibility of \tauτ .

AA agents: can be hired by only one merchant in each period, after being hired, can decide to be honest and then payoff for the agent and the merchant is (W, \gamma-W)(W,γW), or decide to cheat, and then payoff is (\alpha, 0)(α,0) . An unemployed agent will receive \bar w \geq 0w¯0 .

M>AM>A , time discount factor \deltaδ , \gamma > \kappa+\bar wγ>κ+w¯ , \gamma>\alpha>\bar wγ>α>w¯ , \kappa>\gamma – \alphaκ>γα

Given the high uncerainty of commerce and life at 11th, the merchant has a limited ability to commit to future wage and employment. And among Maghribi traders, the value of one’s reputation did not diminish with old age due to responsibility of his relatives and sons.

A multilateral punishment strategy (MPS)

Merchants’ strategy: A merchant offers an agent a wage ParseError: KaTeX parse error: Expected ‘EOF’, got ‘​’ at position 4: W^*​̲ , rehires the same one if he has been honest (unless forced separation), fires the agent if being cheated, never hires an agent who has ever cheated any merchant, and randomly chooses an unemployed agent if forced separation occurs.

Agents’ strategy: being honest if paid W^W , cheating if paid less than W^W

→ Is MPS a subgame-perfect equilibrium?

Assume h_hhh the probability that an unemployed honest agent will be rehired, and h_chc the probability that an unemployed cheater will be rehired

V_h=W^*+\delta(1-\tau)V_h+\tau V_h^uVh=W+δ(1τ)Vh+τVhu

V_i^u=\delta h_i V_h +\delta(1-h_i)(\bar w+V_i^u) \qquad i=h,cViu=δhiVh+δ(1hi)(w¯+Viu)i=h,c

Agents’ equilibrium strategy: agent will not cheat if V_h \geq \alpha+V_c^uVhα+Vcu (lifetime expected utility of being honest > one-period gain from cheating + lifetime expected utility of being cheater)

→ W^* = w(\delta, h_h, h_c, \tau, \bar w, \alpha)W=w(δ,hh,hc,τ,w¯,α) , which is monotonically decreasing in \deltaδ , h_hhh , and monotonically increasingly in h_chc , \tauτ , \bar ww¯ , \alphaα

Merchants’ equilibrium strategy: merchant will strictly prefers to hire an honest agent rather than a cheater uner the MPS, since the optimal wage decreases/increases in the probability of future hiring of the honest/cheater
← Under MPS, W^* = w(\cdot, h_h, h_c) \leq \gamma – \kappaW=w(,hh,hc)γκ , where h_c = 0hc=0 , and h_h = \tau M / [A-(1-\tau)M]hh=τM/[A(1τ)M]

→ “It is the uncoodinated response of all the merchants and the interrelations between their expected future behavior optimal wage perceived that insures solidarity of incentives.”
→ “The possibility of forced separation links the optimal wage from one merchant and the agent’s expected future relations with others.”
→ “Hence, merchants follow the MPS despite the fact that cheating in the past does not indicate that the agent is a “lemon”.”

4. The Maghribi Traders Coalition: Theory and History

The theory and the history leads to hypothesis:
​ – Maghribis were governed by a coalition, which is a group of traders whose member merchants are expected to hire only member agents
​ – These agency relation are governed by MPS
​ – (an agent who cheated a cheater was not subject to MPS)
​ – The importance of expectation concerning future hiring in making collective punishment credible
​ – Maghribis shared an appropriate internal informal information-transmission mechanism which enables merchants to monitor agents and makes cheating known to all

**But question left: no agency relationship with non-Maghribi traders (other Jewish or Muslim) **
– agency relationship was limited with only emigrated Maghribi traders in the Muslim world, despite no political restrictions and the perception that trade with Christian world was most profitable = a possibility seems to undermine the foundations of the coalition
→ Why did agents not seek non-Maghribis merchants? Why was the commitment of future employment of honest agents credible despite merchants’ temptation to hire non-Maghribi agents? Why then was the coalition sustainable?

The point: MPS enhances efficiency and profitablility when each merchant has limited ability to commit to future hiring:
1] bilateral punishment strategy (BPS) would not work in such situations in which the punishment is not credible and thus no trade occur at all given the fact that agents would definitely cheat. Whereas in MPS, an agent takes into account the consequences of cheating a particular mechat in terms of future employment with other merchants. Thus under BPS, h_c=h_h = \tau M / [A-(1-\tau)M]hc=hh=τM/[A(1τ)M], while under MPS, h_c=0, h_h = \tau M / [A-(1-\tau)M]hc=0,hh=τM/[A(1τ)M]
2] The restriction of agency relations to a specific subset of the group (coliation) leads to a decrease in h_chc and an increase in h_hhh, thus reduces the optimal wage.
3] the wage reduction futher enhances efficiency by making agency relations profitable in situations that gain is low, as W^* \leq \gamma -\kappaWγκ
=> hence, by affecting efficiency and profitability, the sustainability of a coalition can be assured: member merchants are motivated to establish agency relations with member agents, while the latter are better off being employed by member merchants

Additional point: coalition is self-enforcing
4] if other coalition’s merchants will not use MPS against a member agent who cheated anonmember merchant, initiating intercoalition agency relationship will face up to a higher h_chc thus a higher ww
5] Informal information flows are only availble within a coalition in which each trader is known to others.
6] Outsider’s accusations are strategically ignored because they are difficult to be assessed and will make agents vulnerable to blackmail by nonmembers. While an insider merchant puts his own reputation on the line when accusign an agent.
=> expectations of future hiring, the nature of the networks for information transmission, and strategic considerations discourages intercolaition agency relations, making coalition self-enforcing
→ hence once a coalition is formed through some historical process, relations will be established only among members whose expectations were initially crystallized (path dependency)
← however, the boundaries of coalition is determined by the social relations and information transmission networks that promoted by the economic insitution -the coalition itself.

**Social structure, social identity and trade coalition: **
An institutional path-dependent process + A postitive reinforcement between economic and social insitutions
– Maghribis’s immigration process determined the informal social network for information transmission as well as the social idenitity of individuals for collective punishment and future hiring, both of which are the requirements of the emergence of an economic institution -the coalition
– Once coalition was formed, only descendants of Maghribis were perceived by others as members, and membership becomes a valuable asset.
– At the same time, the coalition provided the interactions required to sustain the social structure, while the Maghribis’ social identity provided the means to coordinate expectations require for the functioning of the coalition.
– When the Maghribis ceased to operate in long-distance trade and their coalition ceased to function, the motivation for social interactions diminished, their social structure lost its vitality, and the Maghribi traders assimilated into the existing Jewish communities.

But question left: The difference between the Maghribi and the Genoese
– The social structure of the Maghribi traders’ group was “horizontal,” as traders functioned as agents and merchants at the same time, distinguished with the Italian traders of the late medieval period, whose Agency relations were organized vertically
– The business association employed by the Maghribis required both parties (the merchant and the agent) to invest capital in the commercial venture. In contrast, the Genoese traders established agency relations mainly through commenda contracts, which required only the merchant to invest.

Merchants has the ability and the need to commit while agents do not :
a coalition generated a capital premium for merchants, which is conditional on past conduct, and hence provides a commitment device not available to an agent and future capital premium constitutes a bond that insures honesty → hence it’s profitable for each merchant to employ a merchant as agent

if the merchant cheats as an agent, his subsequent relations with member agents will be BPS, thus facing a constrain:

V_h^a \geq \alpha + V_c^{u,a} – [V_h^m -(R_c+\delta V_c^m)]Vhaα+Vcu,a[Vhm(Rc+δVcm)] for merchants acting as agents

V_h^a \geq \alpha+V_c^{u,a}Vhaα+Vcu,a for agents

Moreover, a merchant tend to have a high \bar ww¯ which would lead to hight W^*W and preference to agents. Hence within a coalition, the capital a merfhant invests in trade enhances his ability to commit, while the capital invested lesewhre hinders this ability.

In the case of Italian merchants, if its agency relations were governed by BPS, merchants were not able to enhance the ability to commit by investing capital. And Italian merchants were involved in non-trade ventures like real estate, which led to a higher \bar ww¯than the Maghribis.

Theory illuminate the rationale behind historical behavior:
History: no explicit legal commitment that governed the length of the Maghribi traders’ agency relationship but only informal commitment for a short period of time (like the contract in modern firm) + used a per-venture rather than a multiventure accounting system
← Under a reputation mechanism within a coalition, a short-term contract were more efficient than longer one, since the shorter the contract, the sooner the merchant can discover deviation and the less to pay for keeping agent honest. Similarly per-venture accounting system is more efficient, because it facilitates comparing agents’ reports with any relevant information.

5.The Merchants’ Law: Coordination and Comprehensive Contracts

operation of a coalition is based on uncoordinated responses of merchants located at different trade centers + Extensive use of incomplete contracts: letters with “Do whatever your best”

→ for the threat of collective punishment to be credible and for the problem of moral hazard, “cheating” must be defined clearly
← hierarchy that require ex ante information transmission is not possible given the communication and transportation technology
← cultural rules of behavior -a Merchants’ Law- that specified how an agent should act to be considered honest in circumstances not mentioned and served as a default contract (thus required ex ante learning)

=> Within the coalition, the Merchants’ Law promoted efficiency by providing a coordination device, economizing on negotiating cost and enabling flexibility in establishing agency relations.
← However, the Merchants’ Law also imposed a rigidity on the system, that did not ensure optimal changes

6. Conclusion

Situation: [asymmetric information, slow communication technology, incomplete contracts, limited legal enforcement]
Institution: coalition = economic institution [information flows, multilateral punishment, expectation, strategic considerations] + social insititution [social relationship, social entity] + Merchants’ Law
Result: [wage and capital premium, reducing transaction costs, contract enforceability, coordination, reputation mechanism, efficiency, limited broundary, distortion from maximizing total profit]

The study of the coalition also indicates:
A] the importance of the interrelations between political, social, and economic factors in giving rise to a specific nonmarket institution.
– due to the nature of these interrelations, once a specific institution emerges, it may become a part of a self-enforcing stable system which is not prone to change in response to welfare-enhancing opportunities (Japanese market system?)
→ Hence, economic growth in different economies may be diverse due to distinct institutional frameworks of historical origin

B] the importance of a nonmarket institution in providing the institutional framework required for the operation of the market by influencing the cost of trade and thereby effects the process of market integration (Multinational companies?)

After the reading: 1. Using game theory models to study economic institutions

(中林真幸「近代資本主義の組織」P47-48)

Game theoryに基づく制度の定義はrepetition gameによるものとevolution gameによるものと分けられる (Grief 1998; Aoki 2001)

A] repetition game: sub-game perfect nash equiliriumを制度と見なす. Milgrom(1982), Kandori(1992)らの理論研究が,現実に均衡が生じうる条件を確定してゆき,実証研究に対する参照点を与えて,主にGreifによる,新制度学派の経済史研究が提起した経済発展における制度形成の問題(North,1973, 1990)を内生的に分析する実証研究において確立されてきた
+ 長所:遺されたある一時点の資料から遡って均衡の存在を推定するこ - 反面:均衡の存在を推理するための合理的な推論が経済主体においても可能であったことが前提となる

B] evolution game: 制度形成の過程として,経済主体の慣習が,第三者執行や明示的な設計に依拠することなく,経済主体の行動の累積によって形成される
+ 長所: 慣習と信念が限定された合理性の下で,逐次的に形成する過程(Aoki, 2001)を分析の仕組みに組み込んだことにより,合理性を仮定することなく均衡への到達を分析しうる(Matsui 1996, Kandori 1997), より現実に忠実に記述 - 反面:各時点にあり得た制度と信念の複数均衡と共進を実証的に推定することは困難

=> 事実を発見し,帰納的な論証によって定型化された事実を確定することを重要な営みとする経済史学にとって,実証研究における参照の枠組みとしては,reptition gameにおけるsub-game perfect nash equiliriumを制度と見なして,その存在を証明することが便利

After the reading: 2. The review by Gregory Clark

A Review of Avner Greif’s Institutions and the Path to the Modern Economy: Lessons from Medieval Trade -Gregory Clark – Journal of Economic Literature, 2007

Greif defines an institution as a self-reinforcing set of behaviors. Greif pioneered in applying game theory to historical institutional analysis … grounded the explanation of informal institutions in optimizing individual rational behavior. Behaviors that would seem to the layman to be based on blind irrational custom could be shown to be consistent with individual optimization.Given the incredible intellectual elaboration of game theory, and its meager harvest in terms of actual economic applications, the finding was welcome to both game theorists and to economic historians. The Maghribi study also allowed for the possibilities of institutional change resulting just from changes in parameters. Since the equilibrium depended on certain parameter values, changes in transportation costs or observability could terminate the old equilibrium and lead to a new one. The 1993 article seemed to point to new micro foundations for institutions that would ground them in individual maximizing behavior.

But this book is almost certainly not what many economists who welcomed the 1993 article expected…In a search for generality, Greif concludes that such a set of limited rational actor assumptions is not constraining enough to describe real-world institutions. For a start, “multiple equilibria usually exist in the repeated situations central to institutional analysis”. There have to be more constraints on the structure of the interaction to explain the equilibrium. These constraints include “cognitive norms” as well as “the social and normative foundation of behavior”. Issues such as “losses of esteem,” “norms,” “fairness,” or “social exchange” have to be introduced. Also such social and normative behavior is “situationally contingent”.

Once we are compelled to admit [those]…we lose all explanatory power… [Greif] does not seem to appreciate the price of this generality in terms of testability. All we are left with is the idea that people operating within institutions act as they do because, given the cognitive, intellectual, cultural, and normative constraints they face, their actions seem to them as being the best available. But, in an informal sense, we knew that already. Without any consideration of the ins and outs of game theory, we can appreciate that any lasting institution likely constitutes some set of self-reinforcing behaviors…So what insights have we gained from page after page of elaboration on the idea of equilibria and the elements that enter into them?

the Decentralization of the Firm

Technology, Information, and the Decentralization of the Firm D Acemoglu, P Aghion, C Lelarge… – … Quarterly Journal of …, 2007

Decentralization of the firm: theory and evidence AA Christie, MP Joye, RL Watts – Journal of Corporate Finance, 2003

The organization of firms across countries N Bloom, R Sadun, J Van Reenen – The quarterly journal of …, 2012

Does product market competition lead firms to decentralize? N Bloom, R Sadun, J Van Reenen – 2010

Continue reading “the Decentralization of the Firm”

Personnel and Organizational Economics

summary of some recent papers in this topic that I read in the course

1. The specificity of general human capital: Evidence from college major choice J Kinsler, R Pavan – Journal of Labor Economics, 2015

Wage gaps across majors:
college graduates in science or business often earn 25% more → 1) general ability bias; 2) heterogeneous returns to specific human capital accumulated in college → choice on job decide returns

Potential Implication:
1)  student making decision; 2) policy that encourage technical majors → perceived benefits: a) positive externality in broader economy, b) better paying off student debt
<= inefficiency if specific skill + less opportunity (e.g. competition/capacity) 

Data:
11192 gradating seniors in 1993 student aid study → surveyed in 1994, 1997, 2003 for schooling and labor market outcomes (self-report on if related job)
identify the specificity of human capital within major ← by looking at wage variation across job types

general conclusion:
Students who work in job related to major earn 15% higher + 30% for science majors
(robust to standard ability measures i.e. SAT, GPA) 
→ wage gaps across related/non-related → consistent with different type of job reward skills differently => accumulated human capital is not universally applicable  + specific one accumulated through major choice
(most researches’ focus: work experience, amount of schooling)

Missing Factors → Structural model:
unobserved productivity → gaps: e.g. math human capital + verbal human capital ← a result from schooling + accumulation varies across major
→ classic Roy(1951) structural model: workers first select into a major and then select a job type
=> wages = f(individual human capital, major, job type)individual hc = f(major, job type)
(benefits of structural model: 1) GPA are endogenous to major choice; 2) able to calculate returns to major or related for any selected subgroup; 3) decompose within-major variation in wages)

→ model also investigate: human capital specificity + skill uncertainty → affects college major choice
(face 2 uncertainty when choosing: 1] whether find a related job in future; 2] the possibility of finding a related job and wages associated  due to imperfect information about their human capitals/underlying skill)  → skill uncertainty affect major choices
# other factors in choosing majors: parents, environment, interest, fashion → all not related to the consideration of related job and wage

Detailed conclusion:
1] parameter estimates uncertain about underlying human capital when choosing major: high expected math hc → science-related, high verbal hc → away from business and science
return to mhc are large for business majors (either related job or not) + for science (only related job)
2] non-perfect information assumption is examined → human capital uncertainty
3] average returns to business or science are 0.15, 0.18/0.19, 0.23(OLS); to related for average are 0.27 (both) for science degree
4] specificity of human capital explains 19% of wage variability in science field, 4% for business and others → science related majors may be riskier human capital investment
5] students would choose to science major more if they knew their human capital better

Data details – student & labor market
1] 2476 final sample: male + age<30 + with parental information and SAT + graduating major + major-specific GPA
2] major classification → science, business, other
3] construct variables exogenous to model: fraction of college students in 3 major classification in 1993 + information of legal state of residence of student’s parents in 1993 → exogenous shifter in choosing major
4] separated GPA to construct individual-specific GPA measures for each 3 classification
→ GPA is always highest on student’s own major → selection + accumulation of human capital for chosen field (# incentive)
5] primary employment in 1994, 1997 + current job in 2003 + work hours + wages + related
→ annual salaries are significantly different according to related or not(30% for science, 3% for business, 11% for residual)) → reflect a) sorting: the higher abilities are more likely to work in related, b) varying returns to skills/hc across job types

Descriptive Evidence of the Specificity of Schooling Human Capital
sorting or aggregation bias on wage difference
0] conditional on year effects and graduate degree + control on ability (SAT & major-specific GPA→endogenous problem)
=> business and science majors earn higher incomes
1] control for this difference
=> related wages are significantly larger for science major
2] control for major dummy
=> related wages are significantly larger for both science and business major
3] inclusion of worker fixed effects → ensure the returns to related are identified by workers who switch job types
=> relatedness effect decreases significantly → indicating sorting across majors on unobserved dimensions can help to explain
4] control for detailed occupation effects
=> returns to related decline considerably → wage difference associated with training on major or job tasks is smaller than wage variation across job conditional on major → related jobs tend to cluster in highly paid occupations
5] => occupation and relatedness are tightly linked → relateness partly capturing occupation-major match

=>> human capital developed through collage is specific to particular types of jobs
← no definitive conclusions can be drawn → observable measures of ability are noisy + GPA are endogenous to major choice → descriptive analysis may be affected by sorting on unobservables and differential skill accumulation across major
=> structural model incorporates these features → + examine skill specificity and uncertainty combine to influence major choice

Model
…….

Appendix on 1

根据PayScale Inc. 对美国各专业毕业生起薪、职业稳定期薪水,以及各专业毕业生人群中高中低收入水平的统计。

1. 理工科专业学生起薪高。
比如:电子工程(Electrical Engineering) 专业毕业的学生,毕业后第一年平均收入6万美元,而国际关系(International Relations)专业毕业的学生,毕业后第一年平均收入只有4万美元。从这个角度来看,题主的观察有一定的合理性。

2. 文科专业学生收入增长潜力大。
比较表中第二列(职业稳定期薪水)和第一列(起薪),我们发现文科专业的平均增幅比理工科高。而增幅最高的是基础性的学科(如:数学、哲学)和需要积累大量工作经验、在实践中学习的学科(如:销售、经济、政治、国际关系)。那些最精、专、特殊化的专业收入增长幅度最小(如:心理咨询、室内设计、营养学)。

3. 理工科专业毕业学生收入分布更密集。文科专业毕业生收入分布更分散。而在高端(各专业前10%)人群中,二者差异不大。
表中最后四列列举了各专业毕业生职业稳定期收入水平的分布(10%,25%,75%,90%)。各行业高端人群收入相对差异明显小于低端人群和起薪收入差异。如:物理学专业和哲学专业毕业的学生,起薪差额明显(前者年薪5万美元,后者只有不到4万美元,前者比后者高25%),但职业稳定期高收入人群差异明显缩小(前者年薪17.8万美元,后者16.8万美元,前者只比后者高5%)。

以上现象,从经济学的角度一般做如下解释:
(1)理工科学生的知识专业性更强。在那些不需要工作经验和实战能力的入门级、技术性岗位上,他们凭借自身的职业技能和专业背景,比文科生占优。
(2)文科生的成长速度更快。他们更善于从工作中学习、积累经验,能适应不同类型工作的挑战。因而当在职业稳定期,面临的任务更加多样、复杂的时候,他们的优势得以充分发挥。

 

2. 

 

Labor Economics: some Empirical papers with econometric topics

1. Practical issues on randomized controlled trials (RCT)
– Bertrand, M. and S. Mullainathan (2004). Are Emily and Greg More Employable Than
Lakisha and Jamal? A Field Experiment on Labor Market Discrimination.; American Economic Review 94(4): 991-1013.
– Kling, J. R., et al. (2007). ;Experimental Analysis of Neighborhood Effects.; Econometrica 75(1): 83-119.

2. Observation units and clustering standard errors / matching estimation
HME C7, 3.3.
– Marianne Bertrand &amp; Esther Duflo, Sendhil Mullainathan, 2004. How Much Should We Trust Differences-in- Differences Estimates? The Quarterly Journal of Economics, vol. 119(1), pages 249-275

(Clustered Standard Errors / Robust and Clustered Standard Errors /  Introduction to Robust and Clustered Standard Errors /  A practitioner’s guide to cluster-robust inference AC Cameron, DL Miller – Journal of Human Resources, 2015 / Analysis of a cluster-randomised trial in education)
(Matching Estimators / A Practical Guide to Implementing Matching Estimators 1999/ Matching Estimators Petra E. Todd 2006/ Matching methods for causal inference: A review and a look forward EA Stuart – Statistical science, 2010)

3. Instrumental variables method
HME C4.
– Autor, D. H., et al. (2013). ;The China Syndrome: Local Labor Market Effects of Import
Competition in the United States. American Economic Review 103(6): 2121-2168. ***
– Kling, J. R., et al. (2007). ;Experimental Analysis of Neighborhood Effects.; Econometrica 75(1): 83-119.
– Kondo, A. (2007). Does the first job really matter? State dependency in employment
status in Japan. Journal of the Japanese and International Economies 21(3): 379-402

(Instrumental Variables and Selection Bias / Nonparametric IV Estimation of Local Average Treatment Effects with Covariates / Treatment Effects – MIT Economics )

3. IV&Fixed effects
– von Wachter, T. and S. Bender (2006). In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers’ Careers. American Economic Review 96 (5): 1679- 1705. ***

(Fixed Effects Models)

4. Differences in differences and applications
Method:  Petra Todd (1999) “A practical guide to implementing matching estimators”
HME C5.
– Eissa, N. and J. B. Liebman (1996). Labor Supply Response to the Earned Income Tax Credit. The Quarterly Journal of Economics 111(2): 605-637.
– Duflo, E. (2001). Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment. American Economic Review
91(4): 795-813.
– García-Gómez, P., et al. (2013). Long-Term and Spillover Effects of Health Shocks on Employment and Income.Journal of Human Resources 48(4): 873-909.

(Panel Data: Fixed Effects and Differences in Differences Differences-in-Differences / Difference-in-Differences Estimation / Question 1 / Question 2)

5. Regression Discontinuity Design
Method: Lee, D. S. and T. Lemieux (2010). Regression Discontinuity Designs in Economics.Journal of Economic Literature 48(2): 281-355.
HME C6.
– McCrary, J. and H. Royer (2011).The Effect of Female Education on Fertility and Infant Health: Evidence from School Entry Policies Using Exact Date of Birth. Am Econ Rev 101(1): 158-195.
– Dahl, G. B., et al. (2014). Peer Effects in Program Participation.; American Economic Review 104(7): 2049-2074. ***

6. Sample selection bias and its corrections
Method:  Cameron, A. Colin and Pravin K. Trivedi, 2005. Microeconometrics, Cambridge
University Press. Ch. 16.5.
– Lee, D. S. (2009). Training, Wages, and Sample Selection: Estimating Sharp Bounds on
Treatment Effects. The Review of Economic Studies 76(3): 1071-1102.

(Applied Econometrics Lecture 15: Sample Selection Bias Estimation of Nonlinear Models with Panel Data / Detecting and Statistically Correcting Sample Selection Bias / What is the difference between “treatment endogeneity” and “sample selection bias”? / SAMPLE SELECTION BIAS )

7. Binary Choice Models

(Applied Econometrics Lecture 10: Binary Choice Models / Models for Binary Choices: Linear Probability Model / Lecture 9: Logit/Probit / DISCRETE CHOICE / Binary Choice Models)

 

Continue reading “Labor Economics: some Empirical papers with econometric topics”

経済史 core-text

岡崎先生のコアテキスト経済史をメモします

理論枠組み:経済組織をcoordinationとmotivationの2つ視点から捉える
(Economics, organization and management – J Roberts, P Milgrom – 1992)

coordination: 共同生産消費、資源配分 (division of labour/cooperation mechanism)
motivation: ↑共同生産消費のために人々を動機づける

=> 制度と組織の経済史 + 他の視点 => 経済成長と経済発展

1。経済史を研究する意味

The Journal of Economic History, Explorations in Economic History, The Economic History Review

A) Toynbee, A.J.: 歴史の教訓:未来の予測ではない、「もし現代の事態とよく似ている過去の事態についての時知識があれば、未来において起こりうる諸々の」可能性について、少なくとも一つの可能性を教えてくれる」

e.g. 先進国の経済発展の経験から発展途上国が教訓を得る → 東アジアの奇跡:オーソドックスな開発政策+産業政策(産業間や企業間の資源配分に政府が介入するミクロ的な政策、援助されるべき産業の選択→国際競争)=> market friendly government → 1990年代成長率の低下と金融危機→奇跡の再検討

B) 過去と現在の共通性ではない、相違

経済関係、行動様式を与件として前提することは現在あまりに一般的としても、歴史には一般的ではなかった => 考え方を改める

e.g. Marx:資本主義は古代以来、進んできた生産仕様の発展の一段階→雇用関係を軸に経済活動が営まれるという現在の経済の基本的な仕組みが、歴史のある時期に生まれた→そこから資本主義は変革し得るものという見方

e.g. 終身雇用は日本の文化ないし国民性の差ではない→戦前の日本の離職率は高い、大企業も不況期には活発に解雇を通じた雇用調整を実施→機能や存在理由

C) 実験室としての歴史

e.g. Friedman, Schwartz: A Monetary History of the US, 1867-1960 → 貨幣残高の変動と背景 → 長期の歴史データによって相互関係を定量的に分析+歴史文書によって、変化の独立性を論証=>長期時系列データを発生させる実験室

e.g. ミクロは多数のデータを得る→歴史中政府の規制介入が行われなかった時期を見出す、理論を立つ/テスト→例えば金融恐慌のメカニズムを研究する、WWII以降は預金保険制度がある

e.g. 歴史上における規制の変更や大きな事件→自然実験→randomized trial→仮説検証→比較優位原理は貿易が存在しない状態を想定する→日本江戸時代の鎖国→実証的にテスト→しかし一国で直接は無理→アウタルキーの各財価額と貿易開始後の輸出財輸入財の価額を評価して貿易収支を計算

D) 経路依存性

Bloch, M.: 多くの社会的創造物に特有な惰力→現在の視点や諸条件から見ると非効率なことが広く長く存在している理由

e.g. David, P.: Clio and QWERTY → どうのようにしてそうなった→ 結果が時間的に離れた出来ことから重要な影響を受ける→現時点でQWERTYの特性をいくら調べても、非効率的から、広く普及している理由は説明できない→歴史を調べる→当時の技術の制約による合理的な設計→広く使われ続けている:1)user/maker補完性;2)network外部性 => 経路依存性:いったん選択されて支配的な状態が、なぜ維持され、なぜその状態に到達

path dependance in game theory: → 2 or more Nash equilibrium → no incentive to leave the less efficient one → stable status

2。経済成長

A)経済成長と測定

経済成長:経済活動が長期的に拡大 → GDP/GNP
Kuznets, S.S. → Maddison, A. → 1)16世紀から成長が続け;2)時期によって大きく異なり → 1500-1820: 0.04% (一生でも所得水準上昇の実感ない); 1820-:1.21%

地域間所得格差:
1)1820時点ですでに格差がり、west europe最高
2)1990年代まで拡大

B)新古典派成長理論

Solow, R.M.: Y =F(K,L)  → Y/L = F(K/L) 資本/労働比率→労働生産性

……

kt’ = syt/kt – δ – n  資本/労働比率毎期増加 → 投資 – 資本減耗と労働力増加

……

技術進歩の導入 → Y= F(K, AL)

……

C)理論と現実

Mankiw, N.G., Romer, D., Weil, D.N. → 国別のcross section data1人あたり産出を実証 → 人的資本の導入 H

……

3。経済の歴史的発展に関する様々な見方

A)経済発展段階論

Solow → 経済が同じmechanismで連続的に拡大
経済発展段階論 → 経済の構造、作用するmechanismが、時間とともに、非連続的に段階的に変化  → Marx: 生産仕様:アジア、古典古代、封建、資本主義 → 経済発展は [生産力の上昇 ← 技術 → 生産関係 → 生産力を支えるか妨げるか → 現在の生産関係を破壊次のに移行] / 下部構造=経済関係→上部構造=政治宗教文化

封建制→資本主義 => 資本の本源的蓄積 → 生産手段(土地、機械)を持つ資本家とない労働者……

Marxの限界:1)技術進歩が外生、市場mechanism機能は説明しない;2)普遍的な法則として、特定地域で特定時期に特定の生産仕様が支配的になる理由

B)宗教

Weber, M.: 特定地域で特定時期に顕著な経済発展 → 近代のwest europeが資本主義経済発展を先駆け → 他ならぬ西洋の文化的諸現象 → protestismの宗教経済論理 → 近代資本主義の精神 (他の宗教の経済論理は資本主義をできない)

検証の難点:1)逆の因果関係;2)内生性 → Becker, S.O. & Woessmann, L.: IV → significant → channel: protestismの宗教経済論理により職業態度 → 代替仮説:識字能力で検証 = 教育で人的資本の形成 → IV → 識字significant → not 職業態度

C)経済的後進性仮説

WeberはMarxの非経済的条件 → 発展段階を否定するではない

Gerschenkron, A.: 後進国の経済発展過程は先進国とは同じ段階ではなく、本質的に異なる → 先進国の技術を借用、短時間で経済発展を達成 → 技術gapが大きいほど → 速くなる + しかし技術導入際に克服しなければならない障害も大きくなる:
1)工業化ための労働力不足 ← 労働生産のための土地を持たず、工場で規律労働に従事する能力を持つ労働力 → 逆に資本集約度の高い技術を導入
2)産業相互の補完性 ← 工業化を成功するために、補完性をもつ産業を同時に発展させる必要
e.g. ドイツ:銀行system → 産業と密接な関係、産業企業金融に大きな役割 → 資本集約度の高い産業を同時に発展 / ロシア:国家主導の産業発展
→ 障害の難易度が相違、対応して克服ための組織制度も異なる

4。制度と経済発展

A) The rise of the west

North & Thomas: それまで考えられてきた「様々な要因(技術革新、規模の経済、教育、資本蓄積など)」は成長の要因ではない、成長そのもの→Weberのような始動させた独自の要因をprotestismの経済論理に求めるもなく→効率的な経済組織→取引コストを削減して個人的なbenefitを社会的なbenefitに近づける諸制度(TC:調査、交渉、実施コスト)→ 16-18世紀のwest europeの国家によるproperty right保護制度(中世の小規模な分散的統治から集権的国家)→ 契約の実行と国家の恣意を担保、取引を促す → e.g. 1688 glorious revolution: 制度変化、三権分立(単に政府がproperty right保護宣言だけではなく、人や組織が宣言や約束を守ることのincentiveを与えて、信頼を作る)→ 債務残高増加、利子低下+民間金融市場拡大

B) 制度と経済発展 

regressionの内生性問題→IV→Acemoglu: 植民当時のヨーロッパ人の死亡リスク→植民地政策のtypeは資源収奪か本国移植か→独立後も持続的な影響(死亡リスクは直接に現代の経済performanceと相関は小さい)

The colonial origins of comparative development: An empirical investigation D Acemoglu, S Johnson, JA Robinson – 2000

C) 比較歴史制度分析

TC経済学の経済史への応用:経済主体のincentiveが制度から影響を受ける
(Marx主義はincentiveを無視、neoclassicalはincentiveを理論に組み込んて、制度の影響を考慮しない)
TCの問題点:TCを節約するような管理制度が採用され→その管理制度がなぜ有効に機能する、当事者たちがなぜそれに従う→Northの研究の限界:制度は「社会におけるゲームのルール」、「人々によって考案された制約であり、人々の相互作用を形作る」→ なぜ制約は相互作用を形つくる、なぜ人々は制約を遵守する→制約が外部から実行されという想定、国家による保護に対象が限定され (内部incentive)

→ Grief, A.: 比較歴史制度分析 / Aoki: 比較制度分析 → 制度を「技術以外の要因によって決定される行動に対する自己拘束(self-enforcing)的な制約」← 人々がその制約に従うincentiveを持っている → game theory nash equilibrium → 様々な制度を分析

Micro theory and recent developments in the study of economic institutions through economic history A Greif – 1997

5。市場経済の発展

A) 市場経済の歴史

Greece: 農業より、外国貿易に比較優位があった ← 貨幣の使用
Rome: ローマ帝国の安定した長期支配 → 治安の安定、所有権と契約執行を規制するローマ法
Medieval: イスラム教の侵入→ 地中海を支配+アジアから切り離された → 西europeが孤立、非商業的、自給自足的な性格で独特の経済社会systemが発達 → 社会分業縮小、発達した都市衰退、人口は農村に集中、領主が支配する荘園に所属(耕作地を保有、貢租を納める、離れる自由がない)→ 商業ないし市場経済は著しく衰退
Vines: 当初から海上商業を活発に行い、東方との貿易を従事 → イスラムの支配を受けなかった東地中海で、europeの東側の窓として、商業活動を発達、イスラム勢力を排除
Scandinavian:古代から羊毛工業、優れた航海技術でBaltic Seaで海上商業に専念
=> 二つの貿易圏の結合から→商業の復活→中世都市が発達

中世日本:13世紀中国からの銅銭流入が市場経済の発達を強く促進 / 年貢の財を販売するため、畿内周辺の港町が年貢の保管輸送販売業務によって商業機能に純化した近世の問屋が成長
中世日本:戦国は中世の分散荘園と異なる中央領主の分権制を弱め、統一し、城下町を建設、通行税を廃止、商業を振興、分業関係を形成、最後徳川の政策下で、市場経済を発達 → 兵農分離と石高制 → 地域間分業/藩領域間の分業
近世日本:人口と実質貨幣残高の増加により市場経済が持続的に成長

B)中世地中海商業の比較歴史制度分析

Greif: 11世紀地中海商業の復活を可能にした制度 → 統一的な国家でもない、各地域外国商人の契約を保護する仕組みを備えてない → Maghribi Traders’ Coalitionの私的制度による契約執行保護のメカニズムで遠隔地貿易、agency/commitment problemを解決 → 1)不正のない限り長期取引;2)不正の場合取引しない、不正の情報を共有、共同で取引拒否、すなわち名誉を作る(Multilateral Punishment Strategy)

← このStrategyを参加する個々の商人のincentive:multilateral punishment → 高い賃金じゃないでも不正の機会費用↑ → 不正経歴のあるagentを排除、低い賃金で誠実な行動を引き出す → 商人がstrategyをとるincentiveをもつ、予測の予測を共有(ゲームの均衡)→ information network

(#game theory内informationの効率と非効率)

(#→日本社会の再就職困難の理由?)

C) 近世日本における株仲間の役割

市場経済の枠組みとしての国家の役割が大きとしても、十全ではない → 金公事の紛争の国家による契約執行が行われない → 株仲間という組織の私的な制度 → 不正を行った仲買人と一切商売をしない、他の仲間メンバーと一緒 → 様々な問屋仲間などが、商取引における不正に対して多角的罰

(#均衡に至る経緯は必ずしも明確ではない)→ 株仲間が特定地域における特定事業の同業者集団 + 大きなものではない + 不正をメンバーに周知する公式の手続きを持っていました(行司の役)

18世紀普及、19世紀全面禁止 → strategy機能の実証テスト機会
→ 1)価格裁定機能、同じ財の地域間の価格差から市場経済の発達度を測る → 大阪、江戸、など13地域の米価データを用い、2地域ずつ時系列について相関係数を求める → 1833-41 / 42-50 機能低下
→ 2)経済成長とそれに影響する変数についてデータを見出して、禁止の変数を加えて回帰分析

注意点:この制度のままで、より長期に渡る経済発展を続けることは難しい → 情報共有ため、取引相手の数が比較的に限定され → 近代国家の司法制度が近いメカニズムを拡大

6。生産組織I:工場と企業

A)産業革命

工場制:賃金を対価として雇用された労働者が、工場で経営者が課す規律に服して集団的に働く生産組織
Ashton, T.S.: 18世紀末モスリン需要 → 綿織り物工業が活況 → 新しい紡績機を発明 → 綿糸の供給不足を解決 → 力織り機の普及 → 機械化によって多数労働者が工場で集め、経営者の管理下で → 工場生産 → 産業革命 ← 固有の障害が取り除かれ、systematic change: 1)労働者を確保、管理 → 支配人、職長など監視管理職を設置+incentiveを刺激する賃金体系、罰金制度 → 賃金労働者、全国労働市場の形成
2)銀行、金融システムが工場からの資金需要を供給

Crafts, N.: 定量的な研究を通じて劇的な変化という産業革命観を修正
1)経済成長率は産業革命期に上昇したが、変化は連続、成長率は高くない + 技術進歩の寄与度が急激に上昇ではない、むしろ18世紀末低下
2)綿工業生産の経済全体に占めるweightが小さかった(鉱工業、建築業)

Pomerantz, K.: 再び産業革命の画期性を強調 → 産業革命の中心を変わる + 長期持続すれば指数関数の上昇
18世紀末まで、西europeと中国、Englandと長江デルタ地域を所得水準が同、その後格差が拡大 ← 成長を阻害する共通の制約の顕在化:土地、燃料、食料等環境制約 → England: 1)燃料の木材から石炭への転換;2)アメリカ大陸からの土地集約的財の輸入

経済史分野における経済成長理論の研究:Allen, R.C., 2009, Clark, G., Joel Mokyr, 2009.  + 歴史の出来ことを組み込む:Kremer, M. 2009, Galor, O. 2011

B)Order/Hierarchy

産業革命 → macro的画期じゃなく、micro level技術変化、働き方変化、生産組織変化

Adam Smith: 工場制→分業生産
Marx: 工場制→資本家による労働者を搾取
→ 1970年代radical economics: Marglin, S.: What do bosses do? → Marx主義の立場から工場制の本質を論じ → 問題:技術が社会経済組織を形作るのか、あるいは逆/工場制という生産組織は技術の必然? → 工場制の本質は位階制的構造「hierarchy」(すなわち工場経営者が労働者の生産活動を管理する)→現存する技術はherarchy的な生産組織に適合する (個々の労働者が自分生産管理でも高い効率性を実現できるような技術を設計できる?→しかし諸制度全体に合う仕組みから、経済全体変革が必要)
=> 技術と制度、組織の補完性 → 経路依存的な経済システムの進化

→ なぜ工場制とhierarchyが形成 → 問屋制(生産物管理権の集中)と工場制(生産過程管理権の集中)の二段階により労働者管理権の喪失 → 技術変化に先行して生産組織が変化という歴史的な証拠(自立労働と同じ技術のままで、問屋制さらに工場制への移行という事例:機械化が実用化される前に、手織工は仕事場に集められ → 収益源は優れた技術訳ではない)→ 規律と監督によって生産性を高める
→ Coaseを言及、しかし、企業を市場と代替的な資源配分の仕組みを評価が、TCの節約する手段より労働者を服従されるための手段を強調

# it makes sense if we only see firm as a cooperating function for economics of scale/division of labor, but firm also works as an information processing function (in nature or in further sense a kind of lowering transaction costs or efficient risk taking) and an incentive function. → so yes, technology may come from organizational change with some interactions, but there is no way of a technological route for non-hierarchy structure.

→ Landes, D.S.: What do bosses really do?  → 生産性上げるには規律と監督だけではない → marketingにおける時間や能力 + 技術も重要 → 集中作業場が機械化によって競争優位を確立

→ O.E., Williamson: Economic institutions of Capitalism: Firm, Markets and Relational contracts: 規律と監督を労働者の搾取という所得配分の視点ではなく → 規律を監督の役割をTCの節約を捉え(怠業、原材料詐取、粗悪品を生産) → hierarchy (価値判断)

C)The visible hand

Chandler A.D.: 新しい企業組織の革新:19世紀後半以降、産業革命の成果である工場制や鉄道が広大な国土をもつアメリカに移植され、大企業が形成され、経済の仕組みを変えた ← 企業内部資料調査

鉄道は原動力:1)企業規模増大→組織革新を先導;2)広大な国土を一つ市場に統合→大量流通、大量生産の条件を形成 (1870年鉄道網完成)
→ 幹線鉄道会社はそれまでのない企業特徴:1)格段に規模、事業が大きく(資本金、従業員);2)複雑的な管理能力が必要

=> 新しい組織構造を発達させ:line and staff: line→社長、総支配人、管区支配人という現業部門の縦のorder system; staff→本社の運送、動力、財務など職能部門の管理者は現場と分離、社長を補佐する位置づけ
←機能するために、上の階層から下に命令指示、下から上に報告+管区支配人の業績を評価 (incentive仕組み)+原価計算を含む会計systemを整備

=> 巨大市場→ 専門化から大量生産機能と大量流通機能を一つの組織の中に統合 → 3つのパターン:1)低価格の商品の生産に連続工程の大量生産技術を導入;2)使用とメンテナンスに特別なサービスを必要とする製品を生産する;3)腐敗しやすいため流通過程で特別な取り扱いを必要とする商品 => 複数の地域の事業と複数の職能を担う→ 職能別複数のlineをもつline and staff → 本社機能を拡充:社長、取締役、職能部長が構成する経営委員会がtop mangement機能を担う(評価、調整、企画)

* 経済systemが機能するため ← coordination function + incentive function → not only by market but also by organizational hierarchy (visible hand)

D)生産、流通組織の選択

TC: TCは取引の属性と統治構造によって異なる → 属性に応じてTC最小の構造が選ばれる
属性: e.g. asset specificity → high TC (# according to Demsetz not tc but risk and hurdle to transaction) → TCを節約する統治構造:長期契約/将来事態想定難い場合→取引を企業内部化(vertical integration)

TC→Chandlerの市場と企業の関係の変化を説明 + 不可逆的な歴史的傾向ではなく、特定条件の下で生じる可逆的な現象 (“Beyond Markets and Hierarchies: Toward a new Synthesis of American Business History”, AHR, 2003)
(背景:1980年代以前、統合された大企業がアメリカ経済で主要な地位をしめ、最大規模企業のrankingがほとんど変化しない(Edwards, R.) → 1912年にUS大規模企業top100の54社は1995年に17社残り、かつ26社だけ実質資本金を増加(Marshall’s” Trees” and the Global” Forest”: Were” Giant Redwoods” Different? L Hannah – Learning by doing in markets, firms, and countries, 1999)→1980年代以降に、大規模企業が大幅に後退←当時conglomerate企業の株価市場評価が低下し、買収対象とされ解体され )

TC → 19世紀末の垂直統合 → 大量生産体制を支える製品原材料流通機構が存在しない + asset specificityにより高いTC → 内部化
TC → 20世紀末の統合解体 → 現代多くの流通企業が設備と専門的なnowhowを蓄積、需要に応えることができる + 需要が多いによりasset specificityが低下により低いTC → 市場を利用する(組織内取引の方が高い→incentiveの低下、incentive仕組みが必要 /market competition→incentive)

7。生産組織II:奴隷制、地主制、問屋制

8。金融取引と制度

Market Dynamism

This topic is related to The Rise of Market Power and the Implications and A world dominated by Giants

papers that argue High market dynamism

The changing nature of competition in the US manufacturing sector, 1950—2002
LG Thomas, R D’Aveni – Strategic Organization, 2009

The age of temporary advantage RA D’Aveni, GB Dagnino… – Strategic management …, 2010

The rise in firm-level volatility: Causes and consequences D Comin, T Philippon – NBER macroeconomics annual, 2005

Survival and size mobility among the world’s largest 100 industrial corporations, 1912-1995 L Hannah – The American Economic Review, 1998

Marshall’s” Trees” and the Global” Forest”- Were” Giant Redwoods” Different? L Hannah – Learning by doing in markets, firms, and countries, 1999

 

papers that argue lowing market dynamism

*Changes in Persistence of Performance Over Time VM Bennett, CM Gartenberg – 2016

The Other Aging of America: The Increasing Dominance of Older Firms I Hathaway, R Litan – Brookings Institution, 2014

Declining business dynamism in the United States: A look at states and metros I Hathaway, RE Litan – Brookings Institution, 2014

The secular decline in business dynamism in the US R Decker, J Haltiwanger, R Jarmin… – … draft, University of …, 2014

Declining business dynamism: Implications for productivity
RA Decker, J Haltiwanger, RS Jarmin… – … Center Working Paper …, 2016

Declining Entrepreneurship, Labor Mobility, and Business Dynamism: A Demand-Side Approach
M Konczal, M Steinbaum – New York, NY: The Roosevelt …, 2016

 

Low formation and start-up

What’s Driving the Decline in the Firm Formation Rate? A Partial Explanation
I Hathaway, RE Litan – The Brookings Institution, 2014

A Start-Up Slump Is a Drag on the Economy. Big Business May Be to Blame. nonacademic summing-up

 

Good DID papers

Introduction:

Applied Microeconomics Lecture 3: Difference-in-Difference Estimation

The recommends on paper illustrating DiD methods are gathered according to a tweet talk:

Entitled to work: Urban property rights and labor supply in Peru E Field – The Quarterly Journal of Economics, 2007

Individual vessel quotas and increased fishing pressure on unregulated species
F Asche, DV Gordon, CL Jensen, SU Rashid… – Land economics 2007

Water for life: The impact of the privatization of water services on child mortality
S Galiani, P Gertler… – Journal of political …, 2005

Effective Policy for Reducing Poverty and Inequality? The Earned Income Tax Credit and the Distribution of Income Hoynes and Patel 2017

Cycling to School: Increasing Secondary School Enrollment for Girls in India Karthik Muralidharan & Nishith Prakash AMERICAN ECONOMIC JOURNAL: APPLIED ECONOMICS VOL. 9, NO. 3, JULY 2017

The incidence of mandated maternity benefits J Gruber – The American economic review, 1994

Decriminalizing indoor prostitution: Implications for sexual violence and public health NBER working paper S Cunningham, M Shah – 2014

Did unilateral divorce laws raise divorce rates? A reconciliation and new results
F Gregg – The American Economic Review, 2006

How much should we trust differences-in-differences estimates? M Bertrand, E Duflo… – The Quarterly journal of …, 2004

Consumers as Tax Auditors (Revise and Resubmit, American Economic Review)

Schooling and labor market consequences of school construction in Indonesia: Evidence from an unusual policy experiment E Duflo – 2000 – nber.org

Outsourcing at will: The contribution of unjust dismissal doctrine to the growth of employment outsourcing DH Autor – Journal of labor economics, 2003

The Effect of Health Risk on Housing Values: Evidence from a Cancer Cluster Lucas W. Davis AMERICAN ECONOMIC REVIEW VOL. 94, NO. 5, DECEMBER 2004

Others:

Causal Friday: Some Real Effects of the Flint Water Crisis…

 

 

 

The cooperation evolution 2

(See last post “Cooperation under institutions, norms and culture evolution” for articles introducing the theory of culture evolution, evolutionary biology, evolutionary anthropology, and even a math modeling which explain the evolution of cooperation, norm, and institution in human society.)

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The coevolution of kinship systems, cooperation, and culture Benjamin Enke 2017

 

How cooperation evolves: History, expectations, and leadership Daron Acemoğlu, Matthew Jackson  2011