We propose a methodology for normative evaluation when preferences are context-dependent. We offer a precise definition of context-dependence and formulate a normative criterion of self-determination, according to which one situation is better than another if individuals are aware of more potential contexts of a choice problem. We provide two interpretations of our normative approach: an extension of Sugden’s opportunity criterion and an application of Sen’s positional views in his theory of justice. Our proposition is consistent with Muldoon’s and Gaus’ approaches of public reason in social contract theory, which account for the diversity of perspectives in non-ideal worlds.

Multiple selves is a conventional assumption in behavioural welfare economics for modelling intrapersonal well-being. Yet an important question is which self has normative authority over others. In this paper, we advance an argument for what we call the ‘ontological approach’ to personal identity in behavioural welfare economics. According to this approach, ethical questions – such as which preference should be granted normative authority over another – can be informed by the ontological criterion of personal persistence, which aims at determining what it takes for an individual to persist from one time to another.

Price currents and newspapers are major sources of information on prices during the eighteenth and nineteenth centuries, but drawing conclusions about trends and fluctuations in values from the quotations in these sources poses several recurrent difficulties. After discussing the origins of the prices in these sources, we use a range of examples, mainly involving commodity prices, to illustrate important problems in working with historical price data. These include missing observations and price inertia, varying gaps between low and high price quotations, and the splicing together of price series from different sources or for different commodity qualities. The last two problems often arise from changes over time in the detail with which prices for heterogeneous commodities were reported.

The ‘microfoundations’ metaphor had been used by mainstream macroeconomists with the intention of explaining macroeconomics in terms of microeconomics, or more precisely in terms of statements about individuals, viewed as representative agents with rational expectations who maximise lifetime utility, subject to shocks within a general equilibrium framework. Of the three reasons for rejecting this explanatory strategy, the focus here is on downward causation. Although individuals are heavily influenced by society, their decisions and behaviour are not sufficient as the explanatory foundations for a macrotheory.

This paper produces a new estimate of the Argentine cost of living index (COLI) for the period 1912-1943 that amends the oversights of the official series. The lack of an appropriate splice when the shares of the index's components are changed explains the divergence between the official and the Reconstructed COLIs. The 17.3 percentage-point gap for the period 1912-1943 between the official series used by the historiography and the Reconstructed COLI accounts for the oversights of the official estimate. This divergence is also evidenced when generating real wages. Hence, when Juan Domingo Perón arrived at the National Labour Department in 1943, all else being equal, workers of the City of Buenos Aires were worse off economically than the historiography assumes.

In his seminal 1921 book, Risk, Uncertainty, and Profit, Frank Knight distinguished uncertainty and risk. This paper applies Knight's concept of uncertainty to knowledge generated in incumbent organizations to explain the inherent difficulty in assessing potential innovations along with the key role played by knowledge spillover entrepreneurship as a conduit for transforming new knowledge created by an incumbent organization but ultimately commercialized through the creation of a new firm and innovation. Knowledge is inherently uncertain and constitutes what is characterized as the knowledge filter impeding innovative activity in the context of incumbent firms and organizations. The organizational and institutional context and market uncertainty can either facilitate or impede the spillover of knowledge from the firm where it was created to the entrepreneurial startup where it is transformed into innovation. The empirical evidence based on a large, unbalanced panel of 9,126 UK firms constructed from six consecutive waves of a community innovation survey and annual business registry survey during 2002–2014. Implications for managers, scholars, and policymakers are provided.

In Risk, Uncertainty and Profit (RUP), Knight (1921) develops a theory of the firm that stresses the important role of entrepreneurial judgment for a firm's success. For Knight, entrepreneurial judgment is first and foremost the selection of ‘proxy entrepreneurs’ who are capable of making good judgments under uncertainty. In this sense, entrepreneurial judgment is essentially ‘judgment of judgment’. An overlooked implication of Knight's position is the fact that it leads to an endorsement of distributed entrepreneurship and responsibility. We deem this a very modern idea that challenges a completely hierarchical understanding of the firm. Knight himself does not thoroughly examine the institutional implications of the analytical framework he sets up in RUP. In this paper, we summarize the ‘philosophical vision’ of Knight's framework and illustrate his rationale behind the distribution of entrepreneurship. We conclude the paper with a discussion of potential institutional implications by referring to the danger of monocultures, the additional value created by cognitively diverse teams, and the effectiveness of venture capitalists.

Formal economic models of entrepreneurship have two characteristics: they model entrepreneurship as an allocation of resources, and they identify common factors affecting this allocation. These common factors are represented as parameters of optimization models, and they are evaluated at the market level. We argue that although these models are useful, they are incomplete because certain aspects of entrepreneurial behavior, such as judgment, alertness, or innovativeness, cannot be easily transformed into allocative problems. Moreover, entrepreneurial acts involve idiosyncratic elements, which limit the applicability of the market-level analysis to individual cases. Thus, the traditional economic methods have to be complemented by approaches highlighting the role of individual and historical specificity. The study of entrepreneurship, therefore, requires a synthesis of both general theory and historicist approaches, as envisioned a century ago by Frank Knight.

Hayek’s seminal contribution to theoretical neurosciences, The Sensory Order (1952) remains neglected in current efforts at integrating the neurosciences, psychology and economics. I defend the view that Hayek presents the case for an evolutionary alternative to leading paradigms in the field and look at two in more detail: the good-based model in neuroeconomics and the dual systems approach in behavioural economics. In both cases, essential Hayekian insights remain valid in the context of modern neuroscience, allow for taking account of recent research, and sketch a dynamic and selectionist model of choice.

“Uncertain futures” refers to a set of policy problems that possess some combination of the following characteristics: (i) they potentially cause irreversible changes; (ii) they are widespread, so that policy responses may make sense only on a global scale; (iii) network effects are difficult to understand and may amplify (or moderate) consequences; (iv) time horizons are long; and (v) the likelihood of catastrophic outcomes is unknown or even unknowable. These characteristics tend to make uncertain futures intractable to market solutions because property rights are not clearly defined and essential information is unavailable. These same factors also pose challenges for benefit-cost analysis (BCA) and other traditional decision analysis tools. The diverse policy decisions confronting decision-makers today demand “dynamic BCA,” analytic frameworks that incorporate uncertainties and trade-offs across policy areas, recognizing that: perceptions of risks can be uninformed, misinformed, or inaccurate; risk characterization can suffer from ambiguity; and experts’ tendency to focus on one risk at a time may blind policymakers to important trade-offs. Dynamic BCA – which recognizes trade-offs, anticipates the need to learn from experience, and encourages learning – is essential for lowering the likelihoods and mitigating the consequences of uncertain futures while encouraging economic growth, reducing fragility, and increasing resilience.

This article provides an initial (partial) estimate of silver quantities held within China around mid-18th century, utilising archival evidence related to wealth confiscations. Better future estimates for overall Chinese silver holdings could also facilitate more accurate estimation of Chinese silver (legal plus illegal) imports. Similar analyses for other world regions could eventually yield estimates for global silver stock holdings, useful in turn for improving global silver mining and trade flow estimates. Extensive contraband silver mining and silver trade are known to have escaped official recordation, by definition. If methodologies suggested herein prove successful, then parallel non-silver-trade-good estimates could follow. Current exclusive focus upon production and trade flows should be reevaluated in the context of linkages with accumulations of goods (wealth components). Economic history could someday provide a prominent stage for the historical study of wealth holdings, thereby furnishing context for increasing wealth concentrations observable worldwide today.

Whereas many others have scrutinized the Allais paradox from a theoretical angle, we study the paradox from an historical perspective and link our findings to a suggestion as to how decision theory could make use of it today. We emphasize that Allais proposed the paradox as a normative argument, concerned with ‘the rational man’ and not the ‘real man’, to use his words. Moreover, and more subtly, we argue that Allais had an unusual sense of the normative, being concerned not so much with the rationality of choices as with the rationality of the agent as a person. These two claims are buttressed by a detailed investigation – the first of its kind – of the 1952 Paris conference on risk, which set the context for the invention of the paradox, and a detailed reconstruction – also the first of its kind – of Allais’s specific normative argument from his numerous but allusive writings. The paper contrasts these interpretations of what the paradox historically represented, with how it generally came to function within decision theory from the late 1970s onwards: that is, as an empirical refutation of the expected utility hypothesis, and more specifically of the condition of von Neumann–Morgenstern independence that underlies that hypothesis. While not denying that this use of the paradox was fruitful in many ways, we propose another use that turns out also to be compatible with an experimental perspective. Following Allais’s hints on ‘the experimental definition of rationality’, this new use consists in letting the experiment itself speak of the rationality or otherwise of the subjects. In the 1970s, a short sequence of papers inspired by Allais implemented original ways of eliciting the reasons guiding the subjects’ choices, and claimed to be able to draw relevant normative consequences from this information. We end by reviewing this forgotten experimental avenue not simply historically, but with a view to recommending it for possible use by decision theorists today.

Managers of greenhouses, nurseries, and landscape contractors participated in five focus group discussions on labor-related risks. Managers conceptualize labor risks along the human resource management process: (1) recruitment and selection, (2) training and development, (3) performance evaluation and discipline, (4) careers and relationships, and (5) compensation packages. In addition, they identified (6) immigrant employees and (7) labor laws and regulations as sources of risk. They recognized a large number of risk-increasing attributes, but also a number of mediating strategies to reduce these risks.

This research develops a multiregional optimal control model that incorporates regional allocation of a public budget for controlling invasive plants when regionally differential recreation demand functions and species control costs are present. Our equimarginal condition for optimal budget allocation equates the relative marginal economic benefits per dollar spent across regions. The model was applied to Florida Public Conservation Land regions, and results indicate that the magnitude of an annual management budget affects its distribution among species management regions, but the size of the intrinsic growth rate does not affect the pattern of budget allocation among regions.

Cross-sectional data sets containing expenditure and quantity information are typically used to calculate quality-adjusted imputed prices. Do sample size and quality adjustment of price statistically alter estimates for own-price elasticities? This paper employs a data set pertaining to three food categories—pork, cheese, and food away from home—with four sample sizes for each food category. Twelve sample sizes were used for both adjusted and unadjusted prices to derive elasticities. No statistical differences were found between own-price elasticities among sample sizes. However, elasticities that were based on adjusted price imputations were significantly different from those that were based on unadjusted prices.

In economics, three nested organizational levels, namely behavioural, mental and neural, can be distinguished. They introduce specific theoretical or observable concepts and suggest their own models for choice making. If psycho-economics relates implemented actions to declared mental states, neuro-economics relates mental states to brain areas. Bridge principles can be defined which link concepts with similar interpretations at two successive levels. Thanks to these principles, relations or even models independently suggested at two successive levels may well be associated. Some prescriptive applications of these principles were more recently proposed, but they remain grounded on a too fragile basis.

Un article précédent étudiait la distinction sémantique de l'analytique et du synthétique et l'appliquait à la micro-économie; celui-ci confronte les propositions micro-économiques fondamentales à la distinction épistémologique de l'a priori et de l'a posteriori (ou de l'empirique), tout en s'efforçant de systématiser les quatre concepts. Après avoir repris la définition kantienne de l'a priori et le problème célèbre du synthétique a priori, on met en place deux grandes interprétations des propositions fondamentales, l'empirisme (illustré par l'école classique anglaise) et l'apriorisme (illustré par von Mises au sein de l'école néo-classique autrichienne). On récuse les deux interprétations - la seconde avec plus de détail que la première. On conclut que les propositions fondamentales sont synthétiques, mais ni a priori, ni a posteriori; cette catégorie échappe aux découpages ordinaires. On défend l'interprétation nouvelle en étudiant la loi des rendements décroissants et l'hypothèse de convexité des ensembles de production.

L'article applique à la micro-économie une distinction classique en philosophie du langage, celle des propositions analytiques et synthétiques. Un article ultérieur la rapprochera de la distinction épistémologique des connaissances a priori et a posteriori. On commence par reprendre les définitions principales de l'analytique et du synthétique, et l'on rejette les objections célèbres que Quine a dirigées contre elles. On montre ensuite comment ces définitions opèrent sur la théorie des biens Giffen et des biens substituts. La distinction de l'analytique et du synthétique permet de clarifier des options que les micro-économistes laissent implicites, au risque de tomber dans des pièges sémantiques; en l'occurrence, elle vient renforcer la critique déjà faite de la définition hicksienne des substituts. A titre annexe, on montre que la méthodologie économique identifie incorrectement les propositions analytiques aux tautologies, et les propositions synthétiques à celles qui sont testables.

La critique d’ad hocité est courante en économie, mais elle reste confuse, reposant aussi bien sur des arguments d’ordre heuristique (fondements microéconomiques), que sur des arguments d’ordre empirique (ajustement d’une théorie aux faits). Si l’épistémologie d’inspiration poppérienne fourni des définitions utiles, quoique discutables, de l’ad hocité, une revue de quelques commentaires récents révèle un autre sens attribué par les économistes: une hypothèse qui manque de fondements empiriques tout en étant essentielle à la dérivation des certaines conclusions. Nous cherchons ensuite à déterminer dans quelle mesure les théories de la croissance endogène sont exposées à la critique d’ad hocité. Tout d’abord, s’il est impossible d’affirmer que certaines hypothèses communes à tous les modèles (rendements constants dans la production et forme des fonctions d’utilité) sont ad hoc d’un point de vue empirique ou heuristique, la véritable critique qui peut leur être adressée relève plutôt d’un manque de réalisme. Ensuite, la tentative d’ajustement du modèle néoclassique à l’absence de convergence internationale illustre la difficile application de l’ad hoc dans son acception empirique. Enfin, l’utilisation de l’agent représentatif dans les modèles de croissance en concurrence imparfaite est évaluée à la lumière d’une définition heuristique de l’ad hocité.