Journal of Economic Methodology, Volume 29, Issue 4, December 2022 is now available online. This new issue contains the following articles.
Articles
Transparent players: the use of narrative voices in game theory
William C. Grant
Pages: 263-274 | DOI: 10.1080/1350178X.2022.2033810
ABSTRACT
This paper examines methods for narrating consciousness in game theory. In order to represent how players process their environment, posture towards one another, and hold themselves accountable to their own thinking, I find two distinct ways that game theorists narrate the consciousness of their players. Quoted monologue is a player’s internal language, which can be articulated to show a player’s perspective to the reader. The other narrative mode is psycho-narration, which puts the external technical skills of the game-theorist into the narrator’s hands to describe a player’s mental activity with more complexity than quoted monologue. Quoted monologue and psycho-narration communicate players’ thoughts in ways that convince the readers of the players’ positions, clarify game solution concepts, and enliven the written text.
Coasean idealization
Daniel C. Russell
Pages: 275-293 | DOI: 10.1080/1350178X.2022.2129734
ABSTRACT
Idealizations help us understand the world by simplifying it. When factors make discrete contributions to an outcome, leaving factors out can make it easier to identify the contributions of factors that remain. But typically in economics, factors are not discrete but interact; how can isolating some factor X from some factor Y help us understand a reality in which X’s contribution depends on what Y contributes? I argue that Ronald Coase’s method in ‘The Problem of Social Cost’ illustrates how idealization can aid our understanding of a world in which factor Y (transaction costs) has an effect on factor X (transactions), by making plain precisely that effect, and so making it easier to see features of the actual world that obtain because of that effect. ‘Coasean’ idealization is therefore especially useful for understanding targets in which factors are not discrete but interact, as is so often the case in economics.
A defense of reasonable pluralism in economics
Louis Larue
Pages: 294-308 | DOI: 10.1080/1350178X.2022.2112266
ABSTRACT
This article aims to defend a novel account of pluralism in economics. First, it argues that what justifies pluralism is its epistemological benefits. Second, it acknowledges that pluralism has limits, and defends reasonable pluralism, or the view that we should only accept those theories and methods that can be justified by their communities with reasons that other communities can accept. Clearly, reasonable pluralism is an ideal, which requires economists of different persuasions to respect certain norms of communication while evaluating each other’s theories. The article ends with a discussion of the conditions under which reasonable communication becomes possible.
Our dynamic being within: Smithian challenges to the new paternalism
Erik W. Matson
Pages: 309-325 | DOI: 10.1080/1350178X.2022.2145338
ABSTRACT
This essay uses concepts from Adam Smith’s The Theory of Moral Sentiments to develop ideas about choice and welfare. I use those ideas to offer several challenges to common approaches to behavioral welfare economics and new paternalist policy making. Drawing on Smith’s dialectical concept of practical reason, which he develops in expositing ideas about self-awareness and self-judgment, I first argue that inconsistency need not be viewed as pathological. Inconsistent choices might indicate legitimate context-dependencies as individuals reflect over disjointed perspectives and act accordingly. Understanding inconsistency as reasonable raises epistemic difficulties for identifying errant choices and designing corrective policies. Second, I draw on Smith’s theory of the impartial spectator to discuss dynamic aspects of welfare. Welfare is not simply a matter of preference satisfaction but involves a sense of progress and improvement towards better preferences. Smith’s account suggests that economists interested in welfare should focus on institutional arrangements that facilitate self-development.
Review Essay
Pearl before economists: the book of why and empirical economics
Nick Huntington-Klein
Pages: 326-334 | DOI: 10.1080/1350178X.2022.2088085
ABSTRACT
Structural Causal Modeling (SCM) is an approach to causal inference closely associated with Judea Pearl and given an accessible instroduction in [Pearl, J., & Mackenzie, D. (2018). The book of why: The new science of cause and effect. Basic Books]. It is highly popular outside of economics, but has seen relatively little application within it. This paper briefly introduces the main concepts of SCM through the lens of whether applied economists are likely to find marginal benefit in these methods beyond standard economic approaches to causal inference. The most promising areas are those where SCM's causal diagrams alone offer significant value: covariate selection, the development of placebo tests, causal discovery, and identification in complex models.
Book Review
“Rationality: What it is, why it seems scarce, why it matters” by S. Pinker, London, Allen Lane, 2021.
Enrico Petracca
Pages: 335-339 | DOI: 10.1080/1350178X.2022.2075139
Periodically, by a rough estimate twice per decade, a new popular book aspires to shake our common understanding of rationality. Since this concept is not only the backbone of normative analysis in the behavioral sciences but also of the way people more generally understand normativity, the stakes are particularly high. Among past successful attempts to rethink rationality are, so to refresh the memory, books of the caliber of Gigerenzer (2007), Kahneman (2011), and more recently Mercier and Sperber (2017). Because of its straightforward title, Rationality, and one enticing part of its subtitle, the promise to tell us What it is, Steven Pinker’s latest work aspires to be one of those ground-breaking books. (Read the rest of the review)