Psychology, Rationality and Economic Behaviour: Challenging Standard Assumptions PDF
Preview Psychology, Rationality and Economic Behaviour: Challenging Standard Assumptions
Psychology, Rationality and Economic Behaviour Challenging Standard Assumptions Edited by Bina Agarwal and Alessandro Vercelli Psychology, Rationality and Economic Behaviour ThisisIEAconferencevolumeno.142 Agar: “preiv” — 2005/6/3 — 12:01 — page i — #1 This page intentionally left blank Psychology, Rationality and Economic Behaviour Challenging Standard Assumptions Editedby Bina Agarwal InstituteofEconomicGrowth,UniversityofDelhi,India and Alessandro Vercelli UniversityofSiena,Italy inassociationwiththe INTERNATIONALECONOMICASSOCIATION Agar: “preiv” — 2005/6/3 — 12:01 — page iii — #3 ©InternationalEconomicAssociation2005 Allrightsreserved.Noreproduction,copyortransmissionofthis publicationmaybemadewithoutwrittenpermission. Noparagraphofthispublicationmaybereproduced,copiedortransmitted savewithwrittenpermissionorinaccordancewiththeprovisionsofthe Copyright,DesignsandPatentsAct1988,orunderthetermsofanylicence permittinglimitedcopyingissuedbytheCopyrightLicensingAgency,90 TottenhamCourtRoad,LondonW1T4LP. Anypersonwhodoesanyunauthorizedactinrelationtothispublication maybeliabletocriminalprosecutionandcivilclaimsfordamages. Theauthorshaveassertedtheirrightstobeidentified astheauthorsofthisworkinaccordancewiththeCopyright, DesignsandPatentsAct1988. Firstpublishedin2005by PALGRAVEMACMILLAN Houndmills,Basingstoke,HampshireRG216XSand 175FifthAvenue,NewYork,N.Y.10010 Companiesandrepresentativesthroughouttheworld. PALGRAVEMACMILLANistheglobalacademicimprintofthePalgrave MacmillandivisionofSt.Martin’sPress,LLCandofPalgraveMacmillanLtd. ® Macmillan isaregisteredtrademarkintheUnitedStates,UnitedKingdom andothercountries.PalgraveisaregisteredtrademarkintheEuropean Unionandothercountries. ISBN-13:978–1–4039–4253–1 ISBN-10:1–4039–4253–6 Thisbookisprintedonpapersuitableforrecyclingandmadefromfully managedandsustainedforestsources. AcataloguerecordforthisbookisavailablefromtheBritishLibrary. LibraryofCongressCataloging-in-PublicationData InternationalEconomicAssociation.Congress.(13th:2002:Lisbon,Portugal) Psychology,rationality,andeconomicbehaviour:challengingstandard assumptions/editedbyBinaAgarwalandAlessandroVercelli. p.cm. RevisedversionsofpaperspresentedattheThirteenthWorldCongressofthe InternationalEconomicAssociation,heldinLisboninSeptember2002. Includesbibliographicalreferences. ISBN1–4039–4253–6(cloth) 1.Economics–Psychologicalaspects–Congresses.2.Choice (Psychology)–Congresses.3.Rationalchoicetheory–Congresses. 4.Altruism–Economicaspects–Congresses.5.Decision making–Congresses.I.Title:Psychology,rationality,andeconomic behavior.II.Agarwal,Bina.III.Vercelli,Alessandro.IV.Title. HB74.P8I582002 330(cid:1).01(cid:1)9—dc22 2005043139 10 9 8 7 6 5 4 3 2 1 14 13 12 11 10 09 08 07 06 05 PrintedandboundinGreatBritainby AntonyRoweLtd,ChippenhamandEastbourne Agar: “preiv” — 2005/6/3 — 12:01 — page iv — #4 Contents TheInternationalEconomicAssociation vii Acknowledgements ix ListofAbbreviationsandAcronyms xii ListofContributors xiii 1 Introduction 1 BinaAgarwalandAlessandroVercelli PartI AnalyticalModelsandMethodologicalIssues 2 Self-ConfidenceandPersonalMotivation 19 RolandBénabouandJeanTirole 3 Rationality,LearningandComplexity 58 AlessandroVercelli 4 Altruism:EvolutionandaRepercussion 84 OdedStark,YouQiangWangandYongWang 5 HumanReproductionandUtilityFunctions: AnEvolutionaryApproach 106 AlexanderA.Vasin 6 MoralHazard,ContractsandSocialPreferences:ASurvey 125 FlorianEnglmaier 7 MutualConcern,WorkplaceRelationshipsandPayScales 140 OttorinoChillemi PartII LaboratoryandFieldExperiments 8 ExpectationsandtheEffectsofMoneyIllusion 155 ErnstFehrandJean-RobertTyran 9 Utility-BasedAltruism:EvidencefromExperiments 181 AlexanderKritikosandFriedelBolle v Agar: “prevxiv” — 2005/6/3 — 12:01 — page v — #1 vi Contents 10 EquityJudgementsElicitedThroughExperiments:An EconometricExamination 195 JochenJungeilgesandTheisTheisen 11 Groups,CommonsandRegulations:Experimentswith VillagersandStudentsinColombia 242 JuanCamiloCardenas Agar: “prevxiv” — 2005/6/3 — 12:01 — page vi — #2 The International Economic Association A non-profit organization with purely scientific aims, the International EconomicAssociation(IEA)wasfoundedin1950.Itisafederationofsome sixty national economic associations in all parts of the world. Its basic purposeisthedevelopmentofeconomicsasanintellectualdiscipline,recog- nizing a diversity of problems, systems and values in the world and taking noteofmethodologicaldiversities. The IEA has, since its creation, sought to fulfil that purpose by promot- ing mutual understanding among economists through the organization of scientific meetings and common research programmes, and by means of publicationsonproblemsoffundamentalaswellasofcurrentimportance. DerivingfromitslongconcerntoassureprofessionalcontactsbetweenEast andWestandNorthandSouth,theIEApaysspecialattentiontoissuesofeco- nomiesinsystemictransitionandinthecourseofdevelopment.Duringover fifty years of existence, it has organized more than a hundred round-table conferences for specialists on topics ranging from fundamental theories to methodsandtoolsofanalysisandmajorproblemsofthepresent-dayworld. Participation in round tables is at the invitation of a specialist programme committee, but thirteen (now triennial) World Congresses have regularly attractedtheparticipationofindividualeconomistsfromallovertheworld. The Association is governed by a Council, composed of representatives of all member associations, and by a fifteen-member Executive Committee whichiselectedbytheCouncil.TheExecutiveCommittee(2002–05)atthe timeoftheLisbonCongresscomprised: President: ProfessorJánosKornai,Hungary Vice-President: ProfessorBinaAgarwal,India Treasurer: ProfessorJacobFrenkel,Israel PastPresident: ProfessorRobertSolow,USA President-elect: ProfessorGuillermoCalvo,Argentina Othermembers: ProfessorMariaAugusztinovics,Hungary ProfessorElianaCardoso,WorldBank ProfessorDuardoEngel,Chile ProfessorHebaHandoussa,Egypt ProfessorMichaelHoel,Norway ProfessorJean-JacquesLaffont,France ProfessorAndreuMasColell,Spain ProfessorKotaroSuzumura,Japan ProfessorAlessandroVercelli,Italy vii Agar: “prevxiv” — 2005/6/3 — 12:01 — page vii — #3 viii TheInternationalEconomicAssociation Advisers: ProfessorFiorellaKostorisPadoaSchioppa,Italy ProfessorVitorConstâncio,Portugal Secretary-General: ProfessorJean-PaulFitoussi,France GeneralEditor: ProfessorMichaelKaser,UK Sir Austin Robinson was an active Adviser on the publication of IEA Conferenceproceedingsfrom1954untilhisfinalshortillnessin1993. TheAssociationhasalsobeenfortunateinhavingsecuredmanyoutstand- ingeconomiststoserveasPresident: Gottfried Haberler (1950–53), Howard S. Ellis (1953–56), Erik Lindahl (1956–59), E.A.G. Robinson (1959–62), Ugo Papi (1962–65), Paul A. Samuelson(1965–68),ErikLundberg(1968–71),FritzMachlup(1971–74), Edmund Malinvaud (1974–77), Shigeto Tsuru (1977–80), Victor L. Urquidi(1980–83),KennethJ.Arrow(1983–86),AmartyaSen(1986–89), AnthonyB.Atkinson(1989–92),MichaelBruno(1992–95),JacquesDrèze (1995–99)andRobertM.Solow(1999–2002). The activities of the Association are mainly funded from the subscrip- tionsofmembersandgrantsfromanumberoforganizations.Supportfrom UNESCOsincetheAssociationwasfounded,andfromitsInternationalSocial ScienceCouncil,isgratefullyacknowledged,particularlyforspecifichelpfor theLisbonCongress. Agar: “prevxiv” — 2005/6/3 — 12:01 — page viii — #4 Acknowledgements TheCongresswasheldfrom9to13September2002intheCentroCulturalde Belém,Lisbon,attheinvitationoftheOrdemdosEconomistasdePortugal, andwasattendedby1,100registeredparticipants. The Opening Session was addressed by the President of the Republic of Portugal, HE Senhor Jorge Sampaio, and by the newly-appointed Minister of Finance, HE Senhor Manuela Ferreira Leite; the IEA President, Professor RobertM.Solow,deliveredapaper,‘IsFiscalPolicyPossible?IsitDesirable?’ Theprogrammecomprisedtwentyinvitedlecturesandthreeinvitedpanels– on‘GrowthinDevelopingandTransitionEconomies’(arrangedbytheGlobal DevelopmentNetwork),on‘PovertyDynamicsandInsurance’(organizedby the European Development Research Network) and on ‘The Turkish Finan- cialCrisis’(preparedbytheTurkishEconomicAssociation).Therewere198 contributed papers, a selection of which have been included with Invited LecturesinthefourvolumesoftheCongressproceedings: Bina Agarwal and Alessandro Verceilli (eds), Psychology, Rationality and EconomicBehaviour:ChallengingStandardAssumptions AlanV.Deardorff(ed.),ThePast,PresentandFutureoftheEuropeanUnion Edward Graham (ed.), Multinationals and Foreign Investment in Economic Development RobertM.Solow(ed.),StructuralReformsandMacroeconomicPolicy. StudiesgeneratedbytheGlobalDevelopmentNetworkarepublishedinGary McMahonandLynSquire(eds),ExplainingGrowth:AGlobalResearchProject (IEAConferenceVolumeno.137). Thescientificresponsibilityfortheselectionofpaperswasinthehandsof an International Programme Committee chaired by Robert Solow, with the followingmembers: BinaAgarwal,India GeneGrossman,USA MariaAugusztinovics,Hungary SeppoHonkapohja,Finland VictorBecker,Argentina PeterHowitt,Canada MiguelBeleza,Portugal AndreaIchino,Italy EnriqueBour,Argentina FirellaKostorisPadoa-Schioppa,Italy JuanCamiloCardenas,Colombia ValeryMakarov,RussianFederation ElinanaCardoso,Brazil AndreuMas-Colell,Spain VitorConstâncio,Portugal MustaphaNabli,Tunisia VittorioCorbo,Chile AdemolaOyejide,Nigeria JacquesDrèze,Belgium AdrianPagan,Australia ix Agar: “prevxiv” — 2005/6/3 — 12:01 — page ix — #5
Description:The list of books you might like
