Recent Working Papers

You will find below several working papers I have written recently on different (but somewhat related) topics. Comments are welcome!

A Bayesian Conundrum: From Pragmatism to Mentalism in Bayesian Decision and Game Theory

Abstract: This paper discusses the implications for Bayesian game theory of the behaviorism-versus-mentalism debate regarding the understanding of foundational notions of decision theory. I argue that actually the dominant view among decision theorists and economists is neither mentalism nor behaviorism, but rather pragmatism. Pragmatism takes preferences as primitives and builds on three claims: i) preferences and choices are analytically distinguishable, ii) qualitative attitudes have priority over quantitative attitudes and iii) practical reason has priority over theoretical reason. Crucially, the plausibility of pragmatism depends on the availability of the representation theorems of Bayesian decision theory. As an extension of decision-theoretic principles to the study of strategic interactions, Bayesian game theory also essentially endorses the pragmatist view. However, I claim that the fact that representation theorems are not available in games makes this view implausible. Moreover, I argue that pragmatism cannot properly account for the the generation of belief hierarchies in games. If the epistemic program in game theory is to be pursued, this should probably be along mentalistic lines.

Keywords: Bayesian synthesis – Bayesian game theory – Pragmatism – Mentalism – Preferences

 

Neo-Samuelsonian Welfare Economics: From Economic to Normative Agency

Abstract: This paper explores possible foundations and directions for “Neo-Samuelsonian Welfare Economics” (NSWE). I argue that neo-Samuelsonian economics entails a reconciliation problem between positive and normative economics due to the fact that it cuts the relationship between economic agency (i.e. what and who the economic agent is) and normative agency (i.e. what should be the locus of welfare analysis). Developing a NSWE thus implies to find a way to articulate economic and normative agency. I explore two possibilities and argue that both are attractive but have radically different implications for the status of normative economics. The first possibility consists in fully endorsing a normative approach in terms of “formal welfarism” which is completely neutral regarding both the locus and the unit measure of welfare analysis. The main implication is then to make welfare economics a branch of positive economics. The second possibility is to consider that human persons should be regarded as axiologically relevant because while they are not prototypical economic agents, they have the ability to represent them both to themselves and to others as reasonable and reliable beings through narrative construction processes. This gives a justification for viewing well-being as being constituted by the persons’ preferences, but only because these preferences are grounded on reasons and values defining the identity of the persons. This view is somehow compatible with recent accounts of well-being in terms of value-based life satisfaction and implies a sensible reconsideration of the foundations of welfare economics.

Keywords: Neo-Samuelsonian economics – Welfare Economics – Revealed preference theory – Preference-satisfaction view of welfare – Economic agency

 

History, Analytic Narratives and the Rules-in-Equilibrium View of Institutions

Abstract: Analytic narratives are case studies of historical events and/or institutions that are formed by the combination of the narrative method characteristic of historical and historiographical works with analytic tools, especially game theory, traditionally used in economics and political science. The purpose of this paper is to give a philosophy-of-science view of the relevance of analytical narratives for institutional analysis. The main claim is that the AN methodology is especially appealing in the context of a non-behaviorist and non-individualist account of institutions. Such an account is fully compatible with the “rules-in-equilibrium” view of institutions. On this basis, two supporting claims are made: first, I argue that within analytical narrative game-theoretic models play a key role in the identification of institutional mechanisms as the explanans for economic phenomena, the latter being irreducible to so-called “micro-foundations”. Second, I claim that the “rules-in-equilibrium” view of institutions provides justification for the importance given to non-observables in the institutional analysis. Hence, institutional analysis building on analytical narrative typically emphasizes the role of derived (i.e. non-directly observed) intentional states (preferences, intentions, beliefs).

Keywords: Analytic narratives – Rules-in-equilibrium view of institutions – Institutional analysis – Game theory

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