the 15th biennial conference of the international network

The 15th Biennial Conference of the International Network for Economic Method

INEM 2021November 12-14, 2021Arizona State University, Tempe, Arizona +Virtual

Hybrid Event

Book of Abstracts

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Book of Abstracts

Prepared by Philip Arthur, Arizona State University

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Table of Contents

Page

Keynote 1. Philosophy of Economics in the Anthropocene

Michiru Nagatsu (Helsinki) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1A. Symposium: Behavioral Normative Economics

Ivan Mitrouchev and Valerio Buonomo . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Guilhem Lecouteux . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Mario Rizzo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Malte Dold & Mark Fabian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1B. Performativity

Donal Khosrowi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Uskali Mäki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

1C. Interdisciplinarity

John Davis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Vitor Neves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Alexandre Truc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2A. Behavioral Economics

Lukas Beck . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Glenn Harrison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Erik Angner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

2B. Preferences 1

Roberto Fumagalli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Travis Holmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Néstor Lovera Nieto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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2C. Ontology

Tommaso Ostillio and Giulio Sciacca . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Francesco Guala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Ricardo F. Crespo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3A. Rational Choice Theory

Analisa Costella . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Catherine Herfeld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Ivan Moscati . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

3B. Political Philosophy

Willem van der Deijl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Huub Brouwer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

3C. Keynes, Menger, and Hayek

Scott Scheall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Sina Badiei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 25

Philippe van Basshuysen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

4A. Economic Policy

Sofia Blanco Sequeiros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Luis Mireles-Flores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Eoin Perry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

4B. Economic Modelling 1

Edoardo Peruzzi and Gustavo Cevolani . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Aki Lehtinen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Melissa Vergara Fernández . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

4C. Book Symposium: Jan Tinbergen and the Rise of Economic Expertise

Erwin Dekker, Jon Murphy, William Peden, and Esther-Mirjam Sent ……. 34

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Keynote 2. Hayekian Behavioral Economics

Cass R. Sunstein (Harvard). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

5A. Economic Modelling 2

Ryan Miller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Edoardo Peruzzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Malvina Ongaro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

5B. Human Well-being

Tobias Henschen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Ivan Boldyrev . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Gil Hersch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

5C. Preferences 2

Constanze Binder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Måns Abrahamson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Walter Veit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

6A. Gender, Power and Cyborg Science

Fadi Makki, Nabil Saleh, Jana Kontar Paola Schietekat . . . . . . . . . . . . 43

Mariam Thalos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Magdalena Małecka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44


Ahmet Dincer Cevik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Brian Epstein and Michael Ryall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Raja Panjwani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

6C. Symposium: Reflection with and Without Rules

Malcolm Rutherford . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Jack Vromen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Don Ross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

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7A. Social Contract Theory, Social Welfare, and Social Cost

Jack Vromen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Cyril Hédoin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Rebecca Livernois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

7B. Symposium: The Economics of Disinformation-Studying Human Behavior

in the Infosphere

Piero Ronzani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Folco Panizza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Philipp Lorenz-Spreen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

7C. Philosophy of Economics

Harold Kincaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Silvia Lerner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Teemu Lari . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Keynote 3. Pure Risk Paternalism in Welfare Economics: What it is, and

whether and how to avoid it Johanna Thoma (LSE)…………………………………………………… 54

8A. Critical Realism, Essentialism, and Markets

Daniel Finn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Christian Frasser and Gabriel Guzman . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Lukas Fuchs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

8B. Game Theory and Experimental Economics

Andre Hofmeyr, Harold Kincaid, and Brian Monroe . . . . . . . . . . . . . . . . 56

Marcos Picchio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Nicholas Sooy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

8C. Freedom, Inequality, and Fairness

Conrad Heilmann and Stefan Wintein . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Lennart Ackermans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Kevin Leportier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

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9A. Macro, Financial Economics, and Rational Expectations

Kobi Finestone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . … 60

Gabriele Contessa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …. 61

Conrad Heilmann, Marta Szymanowska, and Melissa Vergara Fernández . . . . 62

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Keynote 1. Philosophy of Economics in the Anthropocene

Michiru Nagatsu (Helsinki)

Kenneth Boulding’s (1966) classic essay ‘The economics of the coming Spaceship Earth’, which

argued for the need of the economy to operate within a closed earth system, and of economics to

internalize this empirical point, inspired scholars such as Nicholas Georgescu-Roegen, Herman

Daly and K. William Kapp (Spash 2013), giving rise to what is now known as ecological

economics. To this day, however, the impact of the planetary boundary thinking (Rockström et al.

2009), the mainstream framework in sustainability science along the line of Boulding, remains

limited in economics. A high-profile publication by prominent economists and ecologists (Arrow

et al. 2004), which addressed the question ‘Are we consuming too much?’, was not only criticized

as neoclassical by ecological economists (Daly et al. 2007), but also ‘failed to engage the

mainstream [economists] in the conversation that was becoming more insistent in other circles: is

growth sustainable?’ (Schor 2011) Mainstream economists seem to be surprisingly reluctant to

incorporate the ‘limits to growth’ perspective, or accordingly modify the assumptions in the

models of economic growth and development in general. Given the evidence on the insufficient

absolute decoupling of economic growth and its material throughput, which would irreversibly

damage many of the Earth’s life support systems for the current and future generations of humanity

(Hickel and Kallis 2020; Wiedmann et al. 2020; Otero et al. 2020), one wonders why mainstream

development economics has not incorporated evidence of unsustainable growth from other

sciences more directly and systematically? Why are we not all sustainability economists yet? This

question is even puzzling because it is arguably more difficult to justify “as if” assumptions about

biophysically unbounded growth than the psychologically unrealistic assumptions about

unbounded rationality of individual choice, which could be be defended as a constructivist system

design principle rather than an empirical fact about homo sapiens (Ross 2014).

The working hypothesis on which I draw is that the mainstream economists’ inability to grapple

with the planetary boundaries is due to its conceptual-methodological inertia originated in the 19th

century. Schabas (2005) argues that the conception of the economic order is ‘more or less severed

from physical constraints. Wealth, or utility, is granted an unprecedented ability to expand.’ (p.

16) The reach of this denaturalization of economics can be seen, for example, in Coyle’s (2011)

discussion on GDP and growth. Bringing ‘nature back in’ economics has proven more difficult

than bringing psychology back in (cf. behavioral economics, Hands 2010).

In my talk, I will explore several institutional, cognitive and political mechanisms through which

the denaturalized conception of the economy prevents economists from recognizing limits to

growth as they are. In particular, an important methodological mechanism is that denaturalized

models of wealth and income make the rigorous internalization of costs and benefits indicated by

other sciences difficult. Heal (2017) proposes to supplement the economic measure of

sustainability with indicators of environmental threats, but is unable to show how to integrate them

with the economic modeling framework. I examine how well recent alternative macroeconomic

models of degrowth (e.g. Bilancini and D’Alessandro 2012; D’Alessandro et al. 2020; Germain

2017; Heikkinen 2015, 2018, 2020) addresses this problem. I conclude with a reflective remark

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that we philosophers of economics could and should play a bigger role in the re-naturalization of

economic science.

References

Arrow, K., Dasgupta, P., Goulder, L., Daily, G., Ehrlich, P., Heal, G., Levin, S., M¨aler, K.-G.,

Schneider, S., Starrett, D. and Walker, B. (2004). Are We Consuming Too Much? Journal of

Economic Perspectives 18, 147–172.

Bilancini, E. and D’Alessandro, S. (2012). Long-run welfare under externalities in consumption,

leisure, and production: A case for happy degrowth vs. unhappy growth. Ecological Economics

84, 194–205.

Boulding, K. E. (1966). The economics of the coming Spaceship Earth. In Environmental Quality

in a Growing Economy, (Jarrett, H., ed.), pp. 3–14. Johns Hopkins University Press Baltimore.

Coyle, D. (2011). The Economics of Enough. Princeton University Press.

Daly, H. E., Czech, B., Trauger, D. L., Rees, W. E., Grover, M., Dobson, T. and Trombulak, S. C.

(2007). Are We Consuming Too Much: For What? Conservation Biology 21, 1359–

1362.

D’Alessandro, S., Cieplinski, A., Distefano, T. and Dittmer, K. (2020). Feasible alternatives to

green growth. Nature Sustainability 3, 329–335.

Germain, M. (2017). Optimal Versus Sustainable Degrowth Policies. Ecological Economics 136,

266–281.

Hands, D. W. (2010). Economics, psychology and the history of consumer choice theory.

Cambridge Journal of Economics 34, 633–648.

Heal, G. (2017). Endangered Economies: How the Neglect of Nature Threatens Our Prosperity.

Columbia University Press.

Heikkinen, T. (2015). (De)growth and welfare in an equilibrium model with heterogeneous

consumers. Ecological Economics 116, 330–340.

Heikkinen, T. (2018). An Equilibrium Framework for the Analysis of a Degrowth Society With

Asymmetric Agents, Sharing and Basic Income. Ecological Economics 148, 43–53.

Heikkinen, T. (2020). A study of degrowth paths based on the von Neumann equilibrium model.

Journal of Cleaner Production 251, 119562.

Hickel, J. and Kallis, G. (2020). Is Green Growth Possible? New Political Economy 25, 469–486.

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Otero, I., Farrell, K. N., Pueyo, S., Kallis, G., Kehoe, L., Haberl, H., Plutzar, C., Hobson, P.,

Garc´ıa-Márquez, J., Rodr´ıguez-Labajos, B., Martin, J.-L., Erb, K.-H., Schindler, S., Nielsen, J.,

Skorin, T., Settele, J., Essl, F., Gómez-Baggethun, E., Brotons, L., Rabitsch, W., Schneider, F.

and Pe’er, G. (2020). Biodiversity policy beyond economic growth. Conservation Letters 13,

e12713.

Rockström, J., Steffen, W., Noone, K., Persson, , Chapin, F. S., Lambin, E. F., Lenton, T. M.,

Scheffer, M., Folke, C., Schellnhuber, H. J., Nykvist, B., de Wit, C. A., Hughes, T., van der Leeuw,

S., Rodhe, H., Sörlin, S., Snyder, P. K., Costanza, R., Svedin, U., Falkenmark, M., Karlberg, L.,

Corell, R. W., Fabry, V. J., Hansen, J., Walker, B., Liverman, D., Richardson, K., Crutzen, P. and

Foley, J. A. (2009). A safe operating space for humanity. Nature 461, 472–475.

Ross, D. (2014). Philosophy of economics. Palgrave Macmillan, New York.

Schabas, M. (2005). The Natural Origins of Economics. University of Chicago Press.

Schor, J. B. (2011). True wealth: How and why millions of Americans are creating a time-rich,

ecologically light, small-scale, high-satisfaction economy. Penguin.

Spash, C. L. (2013). The Ecological Economics of Boulding’s Spaceship Earth. 2013/02. Vienna

Publisher: WU Vienna University of Economics and Business.

Wiedmann, T., Lenzen, M., Keyßer, L. T. and Steinberger, J. K. (2020). Scientists’ warning on

Comunications 11, 3

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1A. Symposium: Behavioral Normative Economics

Identity, Personal Persistence and Normative Economics

Ivan Mitrouchev and Valerio Buonomo

Multiple selves is a conventional assumption in behavioural normative economics for modelling

intrapersonal well-being. Yet an important question is which self has normative authority over the

other. In this paper, we tackle this ethical question from the ontological question of personal

persistence: what does it take for an individual to persist from one time to another? We review the

main theories of personal persistence offered in analytic philosophy and discuss the philosophical

problems related to the unified self-assumption as an alternative to the multiple selves assumption

in normative economics. We discuss two main issues. First, most of the authors defending a unified

account of the self in normative economics tend to consider the question of identity over time from

an ethical viewpoint but not from an ontological viewpoint. We argue that the ethical viewpoint is

misleading because it reduces the question of personal persistence to the question of personhood.

Second, we discuss the fact that the unified account of the self-endorsed in the critical literature of

behavioural welfare economics assumes the narrative view of personal persistence. Because of its

many philosophical objections, we argue, however, that the narrative view cannot provide a

satisfying account of identity.

Why is Homer Economicus Obese? Towards an Institutionalist Behavioural

Welfare Economics

Guilhem Lecouteux

A popular way to introduce behavioural economics consists in contrasting the characteristics of

the fictive ‘Econs’ and of the supposedly real ‘Humans’. The archetypal illustration of this

distinction is to describe an Econ as Mr. Spock from Star Trek, and a Human as Homer Simpson.

This ‘Homer Economicus’ narrative suggests that the deviations from the predictions of rational

choice theory in the lab reveal that real Humans 2 are pathologically maladjusted to their

environment and are predictably stupid (and not merely ‘irrational’). The Homer Economicus

narrative is central in the rise of behavioural paternalism – such as Sunstein and Thaler’s libertarian

paternalism and the use of nudges – and the growing field of behavioural public policy. Treating

behavioural ‘anomalies’ as mistakes, that should be corrected by a benevolent social planner,

confers to economists the role of social designers, whose goal consists in designing optimal

incentives and nudges so as to steer people’s behaviours in the ‘right’ direction. I argue that the

Homer economicus narrative – despite the claims of its proponents – is psychologically flawed,

and that it promotes a political agenda intending to fix maladjusted individuals to a given

environment, rather than fixing possibly malfunctioning institutions. The individual’s ‘failures’ –

in terms of health (e.g. obesity), wealth (poverty and lack of savings), etc. – are primarily explained

by her cognitive deficiencies and ‘biases’, which overlooks the influence of social dynamics on

one’s preferences and current situation. I take as an illustration the case of obesity, which can be

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explained as the consequence of a lack of willpower, of poverty, or of the strategies implemented

by the food industry (with e.g. added sugar). Embracing this alternative institutionalist perspective

could justify radically different behavioural public policies, targeting primarily the functioning of

institutions rather than individual behaviours.

William James, Anti-Paternalist

Mario Rizzo

William James is one of the most important of American psychologists and philosophers. He is

well-known as a founder of functional psychology and of the radical empiricism and pragmatic

movements in philosophy. What is less well-known is that he was an opponent of paternalism (or

as he sometimes called it “maternalism”) and, for similar reasons, the acquisition of American

colonies in the late 19th century. Most notably, he opposed state medical licensure laws. These

positions are rooted in his belief that we all have partial knowledge and partial experience and

should therefore be tolerant of other visions and life plans. This paper seeks to do two things. First,

to ground James’s anti-paternalism more firmly than others have done in his conception of the

individual, the incompleteness of knowledge, and the social importance of the diversity of

experience in the evolution of morality. Second, to show the relevance of James’s framework to

the current critiques of behavioural paternalism.

Nudging When Preferences Are Endogenous

Malte Dold and Mark Fabian

Nudges are nowadays a ubiquitous feature of behavioural public policy. However, they still lack

a coherent theoretical foundation. Sugden (2018), among others, has recently questioned the

normative adequacy of the ‘welfare’ condition for justifying nudges because preferences appear

to be endogenous to the nudge. That is, people’s revealed preference is changed by the nudge itself.

Without the redesign of the cafeteria, the individual appears to prefer confectionary. After the

redesign, they choose to go without. Which preference is the individual’s ‘true’ preference? Paul

and Sunstein (2020) have recently argued that the welfare condition holds so long as nudged

individuals assent to the nudge post-hoc. For example, upon learning that the cafeteria layout was

altered to encourage healthy consumption, cafeteria patrons agree that this design decision was in

their interest. We find this proposal unsatisfying. It opens up a strong form of paternalism—

manipulatively altering an actor’s behaviour on the grounds that it will be good for them. This is

especially problematic where policymakers do not bother to check for post-hoc endorsement. The

AJBT principle also opens up the possibility of introducing nudges where no biases are present

but are inferred to exist based on behaviour change associated with a nudge. We explore a

hopefully more fruitful approach to overcoming the issue of endogenous preferences. We explain

how individuals can come to possess agentic preferences that are sufficiently stable, reasonable,

autonomous, and associated with wellbeing to ground the ‘welfare’ principle of libertarian

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paternalism. We use the term ‘agentic’ preferences both to emphasis their connection to

authenticity, agency, and autonomy and to differentiate them from the related concept of ‘well-

laundered’ preferences. By folding theories of well-being from psychology into our analysis of

self-actualization we can explain not only the stability of agentic preferences and thus their

suitability for the preference-satisfaction notion of welfare in nudging, but also how agentic

preferences relate directly to psychologically rich notions of well-being like positive mood, life

satisfaction, vitality, the absence of psychopathology, and feelings of autonomy.

1B. Performativity

Managing Performative Models: Methods from Economics and Proposals

from Philosophy

Donal Khosrowi

Economic models can be performative: in addition to serving various epistemic purposes, they

can also be constitutively relevant for phenomena or causally affect them, such as when agents’

behavior changes in response to model predictions. Philosophers have made important progress in

delineating different forms of performativity and characterizing the problems they can pose, such

as when model predictions are self-defeating and performativity compromises models’ epistemic

functioning. The existing literature offers two broad types of response to performativity. First, to

maintain models’ predictive abilities in the face of performativity, economists have focussed on

endogenizing agents’ behavioral response. A second approach has been outlined by philosophers

in the context of epidemiological models informing policy response to the SARS-CoV-2

pandemic. They emphasise that performativity can be understood as a desirable model attribute,

e.g. when predictions (e.g. that critical care demand will exceed capacity) steer the public’s

behavior in desirable ways. This approach hence embraces (some forms of) performativity and

considers models as tools that have both epistemic and performative capabilities, each of which

can be appraised individually. In this paper, I argue that neither approach is fully compelling. The

economists’ approach disregards important pragmatic benefits obtaining when models co-shape

phenomena. Yet, while the philosophers’ approach recognizes these benefits, it says too little on

how to adjudicate models’ epistemic and performative roles. Specifically, while it might seem

plausible to appraise models post-hoc for having made important performative contributions, e.g.

helping agents adjust behaviors to predicted scenarios (such as the trade disruptions induced by

Brexit), constructing models specifically to meddle with agents’ behaviors would threaten the

epistemic integrity of models. Addressing these concerns, I outline a refined version of this

approach that articulates more concrete strictures for managing performativity, i.e. helping us

realize models’ performative potentials, while ensuring that their epistemic integrity is left

uncompromised.

13

How to Conceptually Engineer ‘Performativity’?

Uskali Mäki

We – those who do science and those who study science – need concepts that illuminate rather

than obscure, coordinate rather than confuse. ‘Conceptual engineering’ is a recently adopted

phrase to characterize this activity, to encompass more than just what used to be conceived as

analysis and explication. In an extreme case, one does not merely clarify or stipulate the

meaning(s) of a term in use, but proposes abandoning it from (at least some of) its current uses.

This what I have proposed in the case of the fashionable phrase ‘performativity’. Considering it as

a target of conceptual engineering will reveal interesting structural features of the applications of

it as well as of some of the debates over it. Does one wish to save the term or the idea? What moves

are required in each case? I have argued (2013) that McKenzie (and others following his lead)

have obscured the valuable Austinian notion of performativity by extending the phrase to cover

almost any manner in which economics may have consequences for the economy. It is an important

fact that economics has such consequences, and these relations deserve to be carefully investigated,

Yet most of these relations are not performative in the authentic Austinian sense. If one uses the

phrase in radically augmented ways, one thereby gives away the power of the term in identifying

what really are performative relations in society. I will restate and refine the argument, by way of

elaborating on the relationships between causal and constitutive relations, for example. In the

course of the refinements, I will respond to some recent responses to my arguments, eg by Guala

(2016) and Peled (2020).

1C. Interdisciplinarity

Objectivity in Economics: Closed vs. Open Conceptions of Science

John Davis

This paper addresses objectivity in economics. It criticizes a closed science, ‘view from nowhere’

conception of economics and defends an open science, ‘view from somewhere’ conception. The

rationale behind the former is that objectivity in science depends on scientists standing ‘outside’

their subject matter. The rationale behind the latter is that objectivity depends on scientists

‘standing inside’ their subject matter. As an example of the latter, astronomers are able to

investigate a wide range of the electromagnetic spectrum not visible to the human eye, because

they have developed specialized telescopes designed to allow them to ‘see’ the infrared, ultraviolet,

radio, gamma, microwaves, and x-ray bands of the spectrum. Thus, what science sees in the world

depends on how scientists see, and scientists always stand inside their subject matters. The paper

ascribes the first conception to the methodology of current mainstream economics, associates its

closed science, view from nowhere with its principle practices – reductionist modeling,

formalization, limited interdisciplinarity, and value neutrality – and argues they fail to produce an

objective economics. It argues there are two problematic

14

consequences of adopting this stance: (i) value blindness regarding the range and complexity of

human values associated with reducing the concept of preference to an abstract relation and pure

ordering; (ii) fatalism regarding human behavior associated with employing a tenseless (rather

than tensed) representation of time, as illustrated by the problem of future contingents. Both are

shown to derive from the Homo economicus doctrine argued to be foundational to mainstream

economics and the lynchpin of its view from nowhere.

Disciplines, paradigms, and interdisciplinary exchange: A view from

economics

Vitor Neves

Interdisciplinary exchange is a commendable venture from the perspective of an open systems

approach to knowledge. However, it raises many problems, obstacles, and failures. These have to

do with both institutional barriers and cognitive constraints. Disciplines, in particular the social

sciences, are criss-crossed with internal conflicts, which implies that interdisciplinary dialogue is

frequently an effort not only of going across disciplines, always a difficult task, but of inter-

paradigmatic intersection. Hence, the need to look at interdisciplinary exchange from the

perspective of sciences as plural entities rather than of “disciplines” as homogeneous entities. In

this paper, I will discuss interdisciplinary exchange and the intellectual obstacles to

interdisciplinarity that arise from attempts to talk across different, sometimes incompatible, and

incommensurable paradigms in different disciplines. For this purpose, I take the vantage point of

economics. I show why efforts to engage in interdisciplinary exchange involving economics

cannot ignore the fact that this is a multiparadigm discipline and illustrate the argument with a

discussion of uncertainty and how economists have dealt with it. I argue that crucial ontological,

conceptual, and methodological differences separating conflicting views about the way the world

works and how to investigate it significantly hinder the possibilities of cross-fertilization and

constructive exchange among disciplines. Many of the difficulties that interdisciplinary endeavors

usually encounter very often have to do with contradictory exchanges that lead to totally

unproductive or, even worse, illogical, inconsistent results. I will claim, following Kapp, that

interdisciplinary exchange demands integrating concepts and common interpretative frameworks.

However, I also acknowledge that, as Norgaard (1994, p. 84) noted, “our understanding of complex

systems is necessarily based on multiple incongruent ways of knowing”. If this is true, some form

of constructive inter-paradigmatic pluralism is needed. This raises the fascinating issue of the

limits of pluralism and dialogue.

Mapping Behavioral Economics and its Interdisciplinary Practices

Alexandre Truc

Interdisciplinarity in behavioral economics (BE) has often been described as limited or decreasing

since the 1980s. In this article, we investigate the interdisciplinary practices of behavioral

15

economists using quantitative techniques. We find that following an intense period of knowledge

transfer among a handful of individuals, interdisciplinarity between economics and psychology

has decreased in BE since the 1980s. However, this decreasing interdisciplinarity in BE has been

compensated for by the rise of BE in the wider field of economics. While individual BE articles

have become less intensely related to psychology, the growing number of BE articles in economics

as a whole has intensified the overall interdisciplinarity between economics and psychology.

Moreover, the decreasing interdisciplinarity between economics and psychology in BE has not

resulted from a return to a self-sufficient economic approach. Instead, we observe a rise in the

importance of management studies, as well as a variety of other disciplines in the social and natural

sciences, as behavioral economists have diversified their interdisciplinary relationships since the

2000s. Finally, the level of interdisciplinarity between economics and psychology in behavioral

economics remain higher than the average economics’ article, making the specialty distinctively

interdisciplinary.

2A. Behavioral Economics

The Econ within or the Econ above?

Lukas Beck

Scholars of behavioral welfare economics disagree about the plausibility of preference purification

- the idea that some “purer” preferences track people’s welfare better than their actual preferences.

Some tout preference purification as a familiar phenomenon and a solution to the problem of

paternalism. Others denounce it as conceptually incoherent, postulating that it relies on the

psychologically implausible assumption of an inner rational agent that is trapped inside of a

psychological shell (e.g., Infante, Lecouteux, and Sugden 2016). I argue that the debate turns on

different notions of rationality: the account of the foundations of preference purification that its

critics use to undermine its psychological plausibility aligns with a procedural notion of rationality

(cf. Kacelnik 2006). Yet, some of its proponents (e.g., Hausman 2012) align more closely with a

structural notion of rationality (cf. Broome 2013). In a next step, I, therefore, explicate how

structural rationality allows us to offer a more defensible account of the foundations of preference

purification, one that does not appeal to an inner rational agent. Finally, I argue that, while this

novel account cannot resolve the debate by itself, it sits particularly well with the so-called

evidential account of the relationship between preferences and welfare (Hausman and McPherson

2009). In this regard, I point out two challenges for preference purification that emerge under the

novel account introduced here and argue that combining this account with the evidential account

allows us to address these challenges. If all of this is correct, we have good reasons to hold that

the most promising defense of preference purification is built on a combination of structural

rationality and the evidential account.

References Broome J. (2013). Rationality through reasoning. John Wiley & Sons.

Hausman, D. M., & McPherson, M. S. (2009). Preference satisfaction and welfare economics.

Economics & Philosophy, 25(1), 1-25.

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Hausman, D. M. (2012). Preference, value, choice, and welfare. Cambridge University Press.

Infante, G., Lecouteux, G., & Sugden, R. (2016). Preference purification and the inner rational

agent: a critique of the conventional wisdom of behavioural welfare economics. Journal of

Economic Methodology, 23(1), 1-25.

Kacelnik, A. (2006). Meanings of rationality. In S. Hurley & M. Nudds (Eds.), Rational animals?

(87–106). Oxford University Press.

Do No Harm? The Welfare Consequences of Behavioral Interventions

Glenn Harrison

The principle of “do no harm” has long been established in the medical field in relation to proposed

new drugs, procedures, and devices. In that setting, we expect tests of clinical efficacy before the

effectiveness of interventions are tested in the field. We propose that behavioral interventions in

economics, where possible, be similarly subject to tests of efficacy before being applied in the

field, to provide priors that they can be expected to be effective in the field and “do no harm.” We

demonstrate one way to do this, by conducting an experiment in which we randomly assign

individuals in the lab to a range of behavioral interventions that are typically used to promote index

insurance in the field in low-income countries. Based on elicited risk preferences we estimate the

expected individual-level welfare gains and losses from insurance decisions and compare these

across intervention arms. Although all interventions significantly increase take-up, and some

increase understanding, we find no evidence that our behavioral interventions lead to an average

increase in consumer welfare for all interventions.

Nudging and the Problem of Knowledge

Erik Angner

One common argument against nudging and other behavioral interventions goes like this: (1) The

amount of information relevant to developing successful nudges is vast. (2) If we had access to all

that information, we would be able to develop successful nudges. (3) But we don’t have access to

all that information. So (4) we cannot develop successful nudges. The fundamental problem is

often referred to as “the knowledge problem.” The general argument form has a venerable history,

reminiscent of figures like F. A. Hayek and Adam Smith. Constructed in this way, however, the

argument seems obviously misconceived: it is straightforwardly interpreted as an instance of

denying the antecedent – a fallacious argument form. The purpose of this paper is to explore

various ways of articulating the argument in more compelling ways, and also to assess it. In all, I

find, the knowledge problem is best understood as a practical problem for choice architects and

behavioral-interventions teams – not as an insurmountable obstacle to the entire enterprise.

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2B. Preferences 1

Preferences Versus Opportunities: Which Conceptual Foundation for

Normative Welfare Economics?

Roberto Fumagalli

Normative welfare economics commonly assumes that individuals’ preferences can be reliably

inferred from their choices and relies on preference satisfaction as the normative standard for

welfare. In recent years, several authors criticized welfare economists’ reliance on preference

satisfaction as the normative standard for welfare and advocated grounding normative welfare

economics on opportunities rather than preferences. In this paper, I argue that although preference-

based approaches to normative welfare economics face significant conceptual and practical

challenges, opportunity-based approaches fail to provide a more reliable and informative

foundation for normative welfare economics than preference-based approaches. I then rebut

influential calls to ground normative welfare economics on opportunities rather than preferences

to support my qualified defence of preference-based approaches.

How Revealed Preferences Can Be Explanatory

Travis Holmes

The question of how to frame agential preferences in economics finds one caught between Scylla

and Charybdis. If preferences are framed in as minimal and deflationary a manner as revealed

preference theory recommends, the theory falls prey to objections about its predictiveness and

explanatory power. Alternatively, if too many cognitive and causal intricacies are incorporated

into the preference concept, revealed preference models will violate pragmatic norms of model

construction, occasioning the loss of model simplicity and generality. Accordingly, the primitive

character of the preference concept in RPT has fallen under attack for its opposition to folk

intuitions about the seeming causal relationship between preferences and choice. To define

preferences as such on RPT undermines both the causal relationship between preference and

choice as well as the relevance of beliefs in preferential choice behavior (Rosenberg, 1992;

Hausman, 2012). This sharply clashes with the folk intuition that preferences are causally related

to choices and that preference formation is governed in part by an agent’s doxastic states and

conative attitudes; e.g. beliefs, desires and so on. Further, ignoring the internal state of the agent

complicates determination of whether the consistency axioms are satisfied (Sen, 1997). Matters

are further complicated by a set of explanatory objections for RPT (Vredenburgh, 2020). Defined

primitively in terms of choice patterns, justification of the predictive value of preferences for future

choices proves elusive. Moreover, omission of any causal role for preferences in choice behavior

forecloses the possibility that preferences could feature in an explanation of choice when coupled

with the further plausible assumption that scientific explanations are causal. To resolve this

dilemma, this paper charts a middle path, arguing that the path to salvation lies through an

understanding of revealed preference models as program explanations.

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Measurement of freedom of choice: A critical appreciation of the preference-

based approach of Amartya Sen

Néstor Lovera Nieto

Amartya Sen’s contribution to the definition and measurement of individual freedom of choice is

characterized by the importance of the role of a person’s preferences. Sen (1990, 1991) is a pioneer

in considering an association between preferences and freedom in response to the cardinality rule

proposed by Pattanaik and Xu (1990). This paper aims to determine the contribution of Sen’s

preference-based approach to both the conception and value of freedom. For this purpose, it is

important to analyze the main challenges that this approach has faced, like the lack of an explicit

definition of preferences by Sen (Gravel, Laslier, and Trannoy 1998); the incompatibility of this

approach with the independent value of freedom (Carter 1996, 1999); and the problem of

preference adaptation or the ‘contented slave’ proposed by Berlin (2002). First, I focus on studying

the versatility of individuals’ preferences, which Sen assumes as one of the strengths of this

approach. This versatility leads to consider that part of the freedom an individual has lies in

different preferences over alternative preferences or meta-preferences (Sen 2002). Second, I

analyze the importance Sen (1988) gives to the intrinsic value of freedom (the value has freedom

over and above the value of the things it allows one to achieve) and its compatibility with the

preference-based approach. I explore Carter’s critique of Sen’s preference-based approach to show

the strengths and weaknesses of Sen’s proposal. Third, I show Sen’s preference-based approach

influences other preference-based approaches proposed by Arrow (1995); Pattanaik and Xu

(1998), among others. In brief, this analysis sheds light on how Sen’s preference-based approach

contributes to the conception and value of freedom and the development of a preference-based

field to the measurement of freedom of choice.

References

Arrow, Kenneth J. 1995. “A Note on Freedom and Flexibility.” In Choice, Welfare and

Development. A Festschrift in Honour of Amartya K. Sen, edited by Kaushik Basu, Prasanta K.

Pattanaik, and Kotaro Suzumura, 7–16. Oxford: Clarendon Press.

Berlin, Isaiah. 2002. Liberty. Edited by Henry Hardy. 2nd ed. Oxford: Oxford University Press.

https://doi.org/10.4324/9781315091822-3.

Carter, Ian. 1996. “The Concept of Freedom in The Work of Amartya Sen: An Alternative

Analysis Consistent With Freedom’s Independent Value.” Notizie Di Politeia 43 (4): 7– 22. ——

—. 1999. A Measure of Freedom. Oxford: Oxford University Press.

Gravel, Nicolas, Jean-François Laslier, and Alain Trannoy. 1998. “Individual Freedom of Choice

in a Social Setting.” In Freedom in Economics. New Perspectives in Normative Analysis, edited

by Jean-François Laslier, Marc Fleurbaey, Nicolas Gravel, and Alain Trannoy, 76–92. London:

Routledge.

https://doi.org/10.4324/9781315091822-3

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Pattanaik, Prasanta K., and Yongsheng Xu. 1990. “On Ranking Opportunity Sets in Terms of

Freedom of Choice.” Louvain Economic Review 56 (3/4): 383–90. ———. 1998. “On

Preference and Freedom.” Theory and Decision 44 (2): 173–98.

https://doi.org/10.1023/A:1004924211553.

Sen, Amartya. 1988. “Freedom of Choice* Concept and Content.” European Economic Review

32: 269–94. ———. 1990. “Welfare, Freedom and Social Choice: A Reply.” Louvain Economic

Review 56 (3/4): 451–85. ———. 1991. “Welfare, Preference and Freedom.” Journal of

Econometrics 50 (1–2): 15–29. ———. 2002. Rationality and Freedom. Massachusetts: Harvard

University Press.

2C. Ontology

Towards an Ontological Definition of the Market

Tommaso Ostillio and Giulio Sciacca

In this talk, we claim that it might not be exhaustive to define the market either as a place where

economic agents trade or as an institution resulting from the exchanges amongst economic agents.

Therefore, we propose an alternative definition of the market that draws upon two tenets in the

literature. On one side, we agree with F.A. Hayek and V.L. Smith that the interactions amongst

economic agents establish the market as an emerging order. On the other, along with G.L.S.

Shackle, we acknowledge that there might not exist a univocal relationship between the decisions

of economic agents and market trends. Accordingly, we propose an ontological definition of the

market based on a clear distinction between the transactions (i.e., the events) occurring in the

market at any point in time and the market as a whole of transactions. In other words, we contend

that there exists a many-to-one relation between transactions and the market, which is ultimately

analyzable in its entirety. On these grounds, we define the market as a mereological fusion of

transactions and show that transactions are occurrents with temporal parts. Namely, in our account

of the market, transactions are inherent to it and its temporal extensions. Consequently, the market

persists through time due to the in-built temporal extensions of its parts. Hence, economic agents

are finally definable only as participants in – and not parts of – the transactions that make up the

market. Eventually, we show that our account of the market also involves an alternative definition

of market trends and market segments. Notably, we show that market trends are definable as

properties of the market’s temporally extended parts (i.e., as streams of similar transactions),

whereas market segments are definable as the socioeconomic specifications of some particular

decomposition of the markets in a given time interval.

https://doi.org/10.1023/A:1004924211553

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Money on My Mind: A Case Study in the Ontology of Institutional Objects

Francesco Guala

Although institutions are fundamental to human societies, how people represent them is still

largely unknown. Across four studies (total N = 1177 mTurk participants from the United States),

we examined how people categorize money, a paradigmatic institution that provides an

ecologically significant case study. We contrasted defunct currency objects (which no longer

occupy the position of money in society) and ad hoc currency objects like shells and cigarettes

(which were not intentionally created to be money). In all studies, participants robustly categorized

ad hoc currency objects as money. We also found that participants rated social-functional

properties (e.g., being a medium of exchange, being valuable) as the most principled properties of

money, and judged that these properties were explained by the community’s current rules and

practices. Therefore, the core representation of money is as a social position that an object can

occupy, rather than as a kind of artifact. Nevertheless, defunct currency objects elicited bimodal

responding, with many participants saying they were money too. Overall, the data indicate that

people represent multiple causal paths: The social-functional properties of money are explained

by the current social position of an object, whereas the material properties of currency objects are

explained by their being originally created to fill that position (even if they no longer do).

On the Relation between Micro and Macroeconomic “Entities”: a Philosophic

al Approach

Ricardo F. Crespo

The aim of this paper is to discern the ontological condition of macroeconomic entities. The first

section will introduce the definitions and differences between micro and macroeconomics. The

second section will present the Microfoundations Program and its core tool, the “Representative

Agent.” It will show the problems of this approach: technical problems related to aggregation and

with restrictions imposed to the utility functions, problems with the notion of representative agent

used (the conventional economic utilitymaximizing agent), the loss of the richness of heterogeneity

(Arrow 1986: 390), and finally “deep” economic problems remarked by Alan Kirman (1992). The

third section will tackle the ontological nature of macroeconomic entities. It will consider the

notions of supervenience and emergence applied to them, it will describe John Maynard Keynes’s

position, and will explain Aristotle’s theory of wholes applying it to the paper´s topic. Finally, a

short conclusion will wrap up the paper. The substantial entities implied in the macroeconomy are

individuals and other substantial things that generate or influence macroeconomic entities. These

entities originate in Coleman (1990: 28) expression a “system level” that exists as a net of

properties of individual and other substantial relevant things and relations between them. I is in

this sense that the system has a behaviour: the economy, the GDP, the demand for money, or

employment grows or not. Macroeconomy is not a substantial reality, a “big thing”, but a system

of interactions that has a proper “life”.

21

References

Arrow K. J. (1986), “Rationality of self and others in an economic system”, Journal of Business

59, 385‐99.

Coleman, J. S. (1990), Foundations of Social Theory, Cambridge (Mass.): Belknap Press.

Kirman, A. (1992), “Whom or What Does the Representative Individual Represent?”, Journal of

Economic Perspectives 6(2), 117‐136.

3A. Rational Choice Theory

Instrumental rationality, self-expression, and weakness of will

Annalisa Costella

Theories of instrumental rationality evaluate what means are suitable for a person’s ends. One

would thus expect that they are able to correctly individuate a person’s ends as well as delineate

instrumental requirements that are not overly (im)permissible as a result. As I will show, however,

there are pervasive instances in which theories of instrumental rationality either fail to recognise a

person’s ends or impose overly (im)permissible instrumental requirements as a result of

recognising them. I will argue that these are instances in which self-expression over time is part of

a person’s ends. I will demonstrate that, depending on how theories of instrumental rationality

understand a person’s fundamental attitudes, they either cannot recognise self-expression over

time as an end or impose overly (im)permissible requirements of instrumental rationality as a result

of doing so. I will illustrate my argument by drawing on cases of weakness of will, as these have

come to be known in the literature.

The Many Faces of Rational Choice Theory

Catherine Herfeld

Throughout the second half of the twentieth century, theories of rational choice have been

extensively employed in economics and the social sciences more generally. They have been used

in the hope of solving a variety of distinct conceptual, methodological and epistemic problems and

are thus to be found in nearly any context in which economists aim at generating knowledge about

the economy. At the same time, theories of rational choice have been attacked from various sides.

As they have been empirically falsified countless times, they have often been identified as

responsible for the explanatory and predictive shortcomings of economic models and theories. In

this talk, I aim to provide a fresh perspective on persistent debates about the epistemic potentials

and limitations of rational choice theory. First, I suggest that rational choice theory has many

conceptually and methodologically distinct faces that remain prevalent in contemporary

economics, but have emerged from a history of earlier attempts to conceptualize the behavior of

22

human agents. By looking more closely at a set of historical and contemporary cases, I argue that

the way in which rational choice theories have been used and justified in economics has depended

crucially upon the problems that economists addressed. They should accordingly be evaluated

against the backdrop of precisely those problems they were meant to provide a solution for.

Second, I argue that even if economists could draw upon an empirically more adequate theory of

human behavior, it remains to be seen whether they have found an appropriate solution for the

empirical difficulties that economic models and theories actually confront.

Process models are as-if models: An antirealist account of economic theories of

decision-making

Ivan Moscati

In the economic theory of individual decision-making, practitioners often classify models as either

“process models” or “as-if models.” Process models are believed to capture the real psychological

mechanisms generating the decision-makers’ choices. In contrast, as-if models account for the

observable choices that individuals make, but do not pretend to capture the underlying

psychological mechanisms generating those choices. In this paper I claim that the models currently

used in decision theory, be they neoclassical, behavioral, or heuristic, are best understood not as

process models but as as-if models. For neoclassical models this claim may appear trivial, but for

behavioral and heuristic models it is not, for their advocates are typically adamant in presenting

them as process models. I make my case in three steps. Initially, I focus on three prominent models

for decisions in situations of risk, namely Expected Utility theory (EU), which is the standard

neoclassical model for risk; Cumulative Prospect Theory (CPT), which over the years has become

the leading behavioral model for risk; and the Priority Heuristic model (PH), which is a widely-

discussed heuristic model for risk. For readers who might not be familiar with EU, CPT, and PH,

in section 2 of the paper I quickly review these models. Next, in sections 3–6, I argue that the

psychological mechanisms featured by EU, CPT, and PH are cognitively too demanding to be

implemented, consciously or unconsciously, by actual decision makers, and contend that these

three models are best understood as as-if models. Lastly, in section 7 I extend the claim made for

EU, CPT, and PH to other neoclassical, behavioral, and heuristic models for decision-making in

conditions of risk, uncertainty, and over time. The opposition between process and as-if

interpretations of decision theories appears to be an instance of the time-honored opposition

between realist and antirealist accounts of scientific theories. In section 8 I explore whether some

version of scientific realism can account for the as-if modelling practices of decision theory, but I

eventually argue that this is not the case. In section 9 I sketch a version of scientific antirealism

that does account for the as-if modelling practices of decision theory. This version of antirealism

goes beyond traditional instrumentalism, in that it attempts to capture the important role

mechanistic explanations play in decision analysis. Moreover, the antirealism on offer is local in

both a disciplinary sense (it applies to decision theory but might not hold for other areas of

economics) and a temporal sense (it concerns the current state of decision theory but might not

hold for future developments in the discipline). Section 10 concludes.

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3B. Political Philosophy

Fairness in Pay and the Immorality Premium

Willem van der Deijl

A common idea about fairness in pay is that, all things considered equal, those who do work that

is more socially valuable should earn more (e.g. Mulligan 2017; Mankiw 2013; Bregman and

Frederik 2015). Another common view is that, all things considered equal, a fair wage pays more

to those whose work has more intrinsic bads and fewer intrinsic benefits (e.g. Feinberg 1963;

Brouwer and van der Deijl 2020), to compensate for, for instance, for the onerousness, heaviness,

loneliness, etc. I argue that these two principles clash in practice, in light of the immorality

premium. The immorality premium describes that, ceteris paribus, those who do work that is

(perceived as) less socially valuable or even pernicious, is paid more (Schneider, Brun, and Weber

2020). Typical examples to illustrate this relationship are tobacco corporation executives, who

earn more than their counterparts in other corporations, while nurses and elementary school

teachers earn relatively little compared to alternatives at a similar skill-level. I argue that while the

immorality premium appears to be highly undesirable, we have strong egalitarian reasons not to

counteract it. We have a personal interest to do work that contributes to society (Veltman 2016;

Danaher 2017). Having to do work that contributes little of value to others sets back one’s interest

in living meaningful lives, and because work is only partially voluntary, it is unfair to fail to

compensate those who do this type of work. At the same time, we have strong consequentialist

reasons to avoid pernicious work that exists in virtue of high pay. I conclude that as a society, we

have reason to avoid the existence of pernicious or socially meaningless work, but as long as they

exist, it is only just that those who do them are well-compensated for this.

References

Bregman, Rutger, and Jesse Frederik. 2015. Waarom Vuilnismannen Meer Verdienen Dan

Bankiers. Maand van de Filosofie.

Brouwer, Huub, and Willem van der Deijl. 2020. “More Onerous Work Deserves Higher Pay.” In

Equal Pay for All: Economy, Practicability, and Ethics. Palgrave Macmillan.

Danaher, John. 2017. “Will Life Be Worth Living in a World without Work? Technological

Unemployment and the Meaning of Life.” Science and Engineering Ethics 23 (1): 41–64.

Feinberg, Joel. 1963. “Justice and Personal Desert.” NOMOS: Am. Soc’y Pol. Legal Phil. 6: 69.

Mankiw, N. Gregory. 2013. “Defending the One Percent.” Journal of Economic Perspectives 27

(3): 21–34.

Mulligan, Thomas. 2017. Justice and the Meritocratic State. Routledge.

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Schneider, Florian, Fanny Brun, and Roberto A. Weber. 2020. “Sorting and Wage Premiums in

Immoral Work.” University of Zurich, Department of Economics, Working Paper, no. 353.

Veltman, Andrea. 2016. Meaningful Work. Oxford University Press

Reflections Inspired by Elon Musk: Why a Property-owning Democracy may

not be Enough

Huub Brouwer

The universal basic income is surprising popular policy amongst tech-billionaires. Tesla founder

and CEO Elon Musk, for instance, recently remarked that “there is a pretty good chance we end

up with a universal basic income, or something like that, due to automation. Yeah, I am not sure

what else one would do.” Sam Altman, Richard Branson, Steward Butterfield, and Mark

Zuckerberg have all indicated that they are sympathetic to a universal basic income as way to

counteract the negative effects of rising structural technological unemployment. This paper starts

out by assuming that the tech billionaires are right: automation will lead to an enormous increase

in structural technological unemployment. It then asks: if we are committed to (Rawlsian)

egalitarianism, how should the gains and losses of automation be distributed? Or, in Elon Musk’s

phrase: besides implementing a basic income, what else would one do? The main claim of this

paper is that the ownership of AI should be collectivized. I argue for this claim in three steps. First,

I defend the claim that if technological unemployment rises significantly, a basic income would

be unstable, for two (familiar) reasons: (1) the contribution problem: the working will be unwilling

to contribute to funding the basic incomes of those who do not work (cf. Susskind 2020), and (2)

the capital capture problem: rising capital inequalities will provide the rich with disproportional

political influence, which they will use to lobby for tax and transfer schemes that are favorable to

them (cf. Christiano 2012, Robeyns 2017). I then argue that a property-owning democracy scheme

(or at least, the version proposed by Thad Williamson, 2014), which is, in many ways, designed to

avoid the contribution and the capital capture problem, will suffer from these very problems if

there is significant technological unemployment. Thirdly, I defend the claim that collectivizing the

ownership of AI will avoid the contribution problem and the capital capture problem.

References

Christiano, Thomas. 2012. “Money in Politics.” In The Oxford Handbook of Political Philosophy,

edited by David M. Estlund, 241–57. Oxford: Oxford University Press.

Robeyns, Ingrid. 2017. “Having Too Much.” In NOMOS LVI: Wealth. Yearbook of the American

Society for Political and Legal Philosophy, 1–44. Edited by Jack Knight and Melissa

Schwartzberg.

Susskind, Daniel. 2020. A World Without Work: Technology, Automation, and How We Should

Respond. London: Allen Lane.

25

Williamson, Thad. 2014. “Realizing Property-Owning Democracy: A 20-Year Strategy to Create

and Egalitarian Distribution of Assets in the United States.” In Property-Owning Democracy:

Rawls and Beyond, 225-248. Edited by Martin O’Neill and Thad Williamson. Oxford: Wiley

Blackwell.

3C. Keynes, Menger, and Hayek

The Mengers versus Mises on Matters Methodological

Scott Scheall

Carl Menger was famous for, among other things, attacking the purely historical and narrowly

inductive methods of the younger German Historical School, defending the theoretical method of

the Austrian School, and, in the process, commencing the infamous Methodenstreit of the 1880s.

His son, the mathematician and philosopher of science Karl Menger, was known for, among other

things, editing the second edition of his father’s Grundsätze der Volkswirtschaftslehre (Principles

of Economics), making several fundamental contributions to the mathematical theories of curve

and dimension, and participating in the meetings of the Vienna Circle of Logical Positivism, while

overseeing his own highly influential Mathematical Colloquium in Vienna during the 1930s. In

the present paper, I argue that there are various commonalities and, indeed that there is a

“Mengerian” methodology of economics to be found in the epistemological and methodological

writings of the Mengers, father and son. The core of this methodology is tolerance of competing

(meta-) theoretical frameworks. The paper then considers the relationship between this Mengerian

approach and the methodology that is typically described in the literature as the methodology of

the Austrian School of economics, in particular, the rationalistic apriorism of Ludwig von Mises.

I conclude that Misesian apriorism cannot be assimilated to Mengerian tolerance. I further

conclude that, of the two methodological approaches, only Mengerian tolerance is consistent with

the political liberalism commonly associated with the Austrian School.

Contributions of Keynes, Popper and Mongin to Scientific Studies of Norms

in Economics

Sina Badiei

In their recent writings, Scarantino, Su and Colander have proposed to divide the relationship

between positive sciences and the study of norms and values into three types: ‘naïve positivist’,

‘separatist’ and ‘non-separatist’ views. In this paper, I will argue that this classification is

inadequate, in that it fails to do justice to a fourth position that we can find in John Neville Keynes,

Popper and Mongin.

This paper will thus explore Keynes’s view on economic epistemology, and especially its

originality with regard to the epistemological views of other British economists in the nineteenth

century. It will try to extend and improve Keynes’s position using Popper and Mongin’s

26

contributions to economic epistemology, since these contributions have considerable similarities

to Keynes’s view.

It will be shown that the questioning, in the past four decades, of the possibility of distinguishing

between facts and norms, or between the study of facts and the study of norms, has often been

motivated by the desire to avoid the fact that making a distinction between positive and normative

studies has led to increasing marginalization of the study of norms and values in economics, and

to the often-repeated characterization of such studies as merely subjective. I will argue that these

criticisms are valid, but only when leveled at the ‘naïve positivist’ view and the version of the

‘separatist’ view proposed by Robbins. It will be shown that Keynes, Popper and Mongin propose

an alternative way of separating the study of facts from the study of norms, which sets the two

poles of separation on an equal footing in terms of their scientific standing.

By comparing and contrasting the views of Keynes, Mongin and Popper on the study of norms in

economics, I will try to show that all of them consider the development of an adequate framework

for normative economics to be the main stepping-stone to the resolution of normative

discordances, even if they have important differences concerning the scope and tasks of normative

economics. It will be shown that certain problems in normative economics, especially regarding

the relationship between evaluative and prescriptive approaches, can be resolved by making a

distinction between normative economics and normative ethics.

Markets, Market Algorithms, and Algorithmic Bias

Philippe van Basshuysen

Where economists previously viewed markets as arising from a kind of “spontaneous order”

(Hayek 1967), they are now seen as technology that must be well-designed in order to function,

and economists have accordingly adopted the role of engineers who design and install markets in

the real world (Roth 2002). This shift in how markets are viewed has often been interpreted as a

consequence of the expansion of neoliberal thought in economic theory, and it has been argued

that market designers create markets as algorithms that are biased towards their (private-sector)

clients (Nik-Khah and Mirowski 2019). I provide an alternative reconstruction of this conceptual

change, tying it to a series of progressive developments in economic theory, which has enabled

economists to design market algorithms that may implement diverse social goals. This account

implies that, rather than being generally suspected to harbor neoliberal bias, market design should

be scrutinized on a case-by-case basis. Finally, I make some suggestions concerning how we can

go about this, focusing on recent instances of controversial market algorithms, in particular the

FCC’s 2016 Incentive Auction (Milgrom 2017, Doraszelski et al. 2017), and I argue that epistemic

transparency should be investigated as an explicit goal of market design.

References

Doraszelski, Ulrich, Katja Seim, Michael Sinkinson and Peichun Wang. Ownership

Concentration and Strategic Supply Reduction. National Bureau of Economic Research Working

Paper 23034, January 2017, Revised May 2019.

27

Hayek, Friedrich A. Studies in Philosophy, Politics and Economics. London: Routledge and

Kegan Paul, 1967.

Milgrom, Paul. Discovering Prices: Auction Design in Markets with Complex Constraints. New

York: Columbia University Press, 2017.

Nik-Khah, Edward and Philip Mirowski. On going the market one better: economic market

design and the contradictions of building markets for public purposes. Economy and Society

48(2):268-294, 2019a.

4A. Economic Policy

What Can We Do With “Bad” Evidence?

Sofia Blanco Sequeiros

The statement “For evidence-informed policy to succeed, we need good evidence” is intuitively

appealing. It is also a high bar for both scientific research and evidence-informed policy. Scientific

evidence is always uncertain to some degree, and his inevitably affects policymaking. In this paper,

I analyze the problems that discordant or contradictory evidence poses for science and evidence-

informed policy and suggest potential solutions to them. Roughly put, the concept of discordant

evidence refers to (a body of) evidence that provides support both for and against a hypothesis,

theory, or claim, or fails to do either in a satisfactory manner. This is common in scientific research

(cf. Boyd 2018, Franklin 1999). Even though discordance causes problems for evidence

accumulation and amalgamation (Boyd 2018), I argue that it is particularly the decision-making

context in both science and policy that makes discordance an epistemic and methodological

challenge. Stegenga (2012) divides discordance into two dimensions: inconsistency and

incongruency. I argue that this distinction must be supplemented with a nuanced understanding of

how uncertainty relates to evidential discordance. Following (Bogen and Woodward 1988,

Leonelli 2016), I first distinguish between data and phenomena to study the different levels of

evidence and evidential support in scientific inquiry. I then show how uncertainty on and between

these levels produces evidential discordance. Second, drawing on Hey (2015), Landes (2020),

Schupbach (2015) and Claveau (2013), I analyze the conditions under which the amalgamation of

discordant evidence is possible. Finally, by drawing on a case from microeconomics, I discuss how

the philosophical research on discordant evidence connects to empirical research and the

possibilities of using evidence from economics in policy. We can and often have to do things with

“bad” i.e. discordant evidence in both science and policy, and my paper shows how discordance

should be defined and understood to make this possible.

References

Bogen, J., & Woodward, J. (1988). Saving the phenomena. The philosophical review, 97(3),

303- 352.

28

Boyd, N. (2018) “Evidence Enriched”. Philosophy of Science 85, pp. 403–421

Claveau, F. (2013). The independence condition in the variety-of-evidence thesis. Philosophy of

Science, 80(1), 94-118

Franklin, A. (1999) Can that be Right? Springer, Dordrecht, 1999

Hey, S. P. (2015) “Robust and discordant evidence: Methodological lessons from clinical

research”. Philosophy of Science, 82(1), 55-75

Landes, J. (2020). Variety of evidence. Erkenntnis, 85(1), 183-223.

Leonelli, S. (2016) Data-Centric Biology: A Philosophical Case Study. Chicago: University of

Chicago Press. Meager, R. (2019) “Understanding the average impact of microcredit expansions:

A Bayesian hierarchical analysis of seven randomized experiments” American Economic

Journal: Applied Economics, 11(1), 57-91.

Schupbach, J. N. (2015). Robustness, diversity of evidence, and probabilistic independence. In

Recent developments in the philosophy of science: EPSA13 Helsinki (pp. 305-316). Springer

Stegenga, J. (2012) “Rerum concordia discors: Robustness and discordant multimodal evidence”.

In Characterizing the robustness of science (pp. 207-226). Springer, Dordrecht.

What ‘Policy’ in Evidence-based Policy

Luis Mireles-Flores

The empirical turn in economics (Angrist and Pischke 2010) has become an essential backbone of

a general approach to using scientific evidence for policy purposes, the so-called evidencebased

policy (EBP) movement. The main idea motivating EBP is that empirical sciences should devote

more effort to systematising their evidence-assessing methods and standards to secure producing

scientific results that are less subjective and more reliable for guiding policy. There have been a

number of criticisms raised by philosophers against EBP. For example, questions about the

epistemic priority of randomised controlled trials (Worrall 2007; Cartwright 2010), and criticisms

about EBP methods not providing information of the mechanisms underlying causal relations,

which is said to be indispensable for successful policy (Weber 2007; Steel 2013; Grüne-Yanoff

2016; Marchionni and Reijula 2019). Furthermore, Nancy Cartwright (e.g., Cartwright 2009;

Cartwright and Hardie 2012) has put forward a general account of the evidential requirements for

successful and effective evidence-based policy. In this article, I claim that existing philosophical

accounts have focused on unpacking, assessing, and explicating the notion of “evidence” in EBP,

and largely ignored any relevant details concerning what “policy” amounts to. Drawing from

research on public policy studies (e.g., Head 2013; Jasanoff 2013; Birkland 2016; Dunn 2016; Hill

and Varone 2016; Cairney 2016), I argue that we should open the “policy” black-box in EBP, and

study policy-making not as the outcome variable in a formal causal framework, but as a complex

process with distinct stages, and different dimensions, aims, and potential disturbing factors

interacting at each stage. By considering policy-making as a complex process, instead of aiming

29

at general theories about the best type of evidence for policy, one can analyse and understand

separately how different types of scientific knowledge and evidential methods can play different,

more or less relevant, roles at each distinct stage of the policy process.

References

Angrist, J. D., and J.-S. Pischke. 2010. The credibility revolution in empirical economics. Journal

of Economic Perspectives, 24 (2): 3-30.

Birkland, T. 2016. An introduction to the policy process. Routledge. Cairney, P. 2016. The

politics of evidence-based policy making. Palgrave Macmillan.

Cartwright, N. 2009. Evidence-based policy: what’s to be done about relevance? Philosophical

Studies, 143 (1): 127-136.

Cartwright, N. 2010. What are randomised controlled trials good for? Philosophical Studies, 147

(1): 59-70.

Cartwright, N., and J. Hardie. 2012. Evidence-based policy: a practical guide to doing it better.

Oxford University Press.

Dunn, W. 2016. Public policy analysis. Routledge. Grüne-Yanoff, T. 2016. Why behavioural

policy needs mechanistic evidence. Economics and Philosophy, 32 (3): 463-483.

Head, B. 2013. Evidence-Based Policymaking - Speaking Truth to Power? Australian Journal of

Public Administration, 72 (4): 397-403.

Hill, M., and F. Varone. 2016. The public policy process. Routledge.

Jasanoff, S. 2013. The science of science advice. In Future directions for scientific advice in

Whitehall, Cambridge Centre for Science and Policy, 62-68.

Marchionni, C., and S. Reijula. 2019. What is mechanistic evidence, and why do we need it for

evidence-based policy? Studies in History and Philosophy of Science Part A, 73: 54-63.

Steel, D. 2013. Mechanisms and extrapolation in the abortion-crime controversy. In Mechanism

and causality in biology and economics, Dordrecht: Springer, 185-206.

Weber, E. 2007. Social mechanisms, causal inference, and the policy relevance of social science.

Philosophy of the Social Sciences, 37 (3): 348-359.

Worrall, J. 2007. Evidence in medicine and evidence-based medicine. Philosophy Compass, 2

(6): 981-1022.

30

Fact-Value Separation as an Ideal for Economics

Eoin Perry

I critique Steel’s below ‘values-in-science standard’ (VSS) as an ideal for policy-relevant

economics

- Non-epistemic values [roughly values which are not conducive to the attainment of truth] should

not conflict with epistemic values in the design or interpretation of research that is […] ethically

permissible (Steel, 2015, p. 178)

Three critiques are

- - By recommending that economists only accept hypotheses when so doing strikes a reasonable

balance between the epistemic risks involved, VSS may preclude meeting a moral need for quick

inferences not striking any such epistemic balance.

- Some ethical value judgments are also epistemic value judgments regarding an evaluative

question being addressed. VSS obscures the extra-scientific nature of such judgments.

- VSS allows for research uninterpretable as addressing any clear non-evaluatively definable

question (as occurs in toxicology, through the use of ‘uncertainty factors’ (see Steel, 2015, ch. 8),

but uncommonly in economics).

I present an alternative ideal - Fact-Value-Separation (FVS). This recommends formally pre-

registering a precise non-evaluative question to be addressed by a research-project, which has high

and stable relevance to an evaluative question of interest. Completed research should present an

‘epistemic best-estimate’ of the answer to this non-evaluative question, and then separately

articulate this answer’s relevance to the evaluative question. With reference to unemployment and

inflation measurement, I consider objections (corresponding to different kinds of ‘fact-value

inseparability’).

- There may be no non-evaluative question with high and relatively fixed, evidential relevance to

the evaluative question (see Putnam, 2003)

- ethical value judgments may be irreducibly evidentially relevant to the non-evaluative question

(see Anderson, 2004).

- inductive-risk considerations may be relevant ‘all the way down’ such that they should not be

confined to a mere evaluation of the answer to some non-evaluative question (see Reiss, 2017).

I respond to these objections and make positive arguments for FVS.

31


Defending (De-)Idealization in Economic Modelling: A Case-study

Edoardo Peruzzi and Gustavo Cevolani

Theoretical models in science, and in economics in particular, typically contain idealizations of

various kinds. Interestingly, while the idea of idealization is widely studied and central to the recent

philosophical debate (Potochnik 2017; Niiniluoto 2018; Levy 2018; Mäki 2020), the companion

notion of de-idealization has attracted much less attention. Roughly, deidealizing a theory or model

means removing one of its idealized assumptions and replacing it with a new one that it is less

idealized, i.e., more realistic in being closer to the actual phenomena (Nowak 1980; Cools,

Hamminga, and Kuipers 1994; Niiniluoto 2002, 2012; Hindriks 2012; Knuuttila and Morgan

2019). In recent discussion on the methodology of economics, the notion of deidealization and its

role in the practice of the discipline has been strongly criticized (see, in particular, Alexandrova

2008; Alexandrova and Northcott 2009; Reiss 2012). Despite having different views of

idealizations and economic modelling, such critics agree on one point: de-idealization strategies

are actually not used in economic modelling, for the good reason that they are either unfeasible or

useless. This paper aims at rebutting this criticism and defend the viability of deidealization

strategies in economics. We present a detailed case study from the theory of industrial

organization, discussing three different models, two of which can be construed as de-idealized

versions of the first. The baseline model – the so-called Bertrand model – contains, among others,

two crucial idealized assumptions: perfect homogeneity of goods and perfect information among

consumers. These assumptions have been gradually de-idealized by researchers and more realistic

models have been built. In particular, we focus on the Bertrand model with differentiated goods

(Singh and Vives 1984) and the Varian (1980) model of sales. We conclude that recent pessimism

about de-idealization in economics is unfounded, and that de-idealization strategies are not only

possible but also widely employed in economics.

References

Alexandrova, Anna (2008). “Making Models Count”. In: Philosophy of Science 75.3, pp. 383–

404.

Alexandrova, Anna and Robert Northcott (2009). “Progress in Economics: Lessons from the

Spectrum Auctions”. In: Oxford Handbook for Philosophy of Economics. Ed. by Harold Kincaid

and Don Ross, pp. 306–336.

Cools, K., B. Hamminga, and T. Kuipers (1994). “Truth approximation by concretization in

capital structure theory”. In: Idealization VI: Idealization in economics. Ed. by Bert Hamminga

and Neil De Marchi. Rodopi, pp. 205–228.

Hindriks, Frank (2012). “Saving truth for economics”. In: Economics for Real: Uskali Mäki and

the place of truth in economics. Ed. by Aki Lehtinen, Jaakko Kuorikoski, and Petri Ylikoski.

Routledge, pp. 43–64.

32

Knuuttila, Tarja and Mary Morgan (2019). “Deidealization: no easy reversals”. In: Philosophy of

Science 86.4, pp. 641–661.

Levy, Arnon (2018). “Idealization and abstraction: refining the distinction”. In: Synthese, pp. 1–

18. doi: https://doi.org/10.1007/s11229-018- 1721-z.

Mäki, Uskali (2020). “Puzzled by Idealizations and Understanding Their Functions”. In:

Philosophy of the Social Sciences 50.3, pp. 215–237.

Niiniluoto, Ilkka (2002). “Truthlikeness and Economic Theory”. In: Fact and Fiction in

Economics. Ed. by Uskali Mäki. Cambridge University Press, pp. 214–228. — (2012). “The

verisimilitude of economic models”. In: Economics for Real: Uskali Mäki and the place of truth

in economics. Ed. by Aki Lehtinen, Jaakko Kuorikoski, and Petri Ylikoski. Routledge, pp. 65–

80. — (2018). “‘Explanation by Idealized Theories’ ”. In: Kairos 20.1, pp. 43–63.

Nowak, Leszek (1980). The Structure of Idealization: Towards a systematic Interpretation of the

Marxian Idea of Science. Dordrecht: Reidel.

Potochnik, Angela (2017). Idealization and the Aims of Science. Chicago: University of Chicago

Press.

Reiss, Julian (2012). “Idealization and the aims of economics: three cheers for instrumentalism”.

In: Economics & Philosophy 28.3, pp. 363–383.

Singh, Nirvikar and Xavier Vives (1984). “Price and quantity competition in a differentiated

duopoly”. In: Rand Journal of Economics, pp. 546–554.

Varian, Hal R. (1980). “A model of sales”. In: American Economic Review 70.4, pp. 651–659.

Generalisation and abstraction in economic modelling

Aki Lehtinen

This paper provides an account of the epistemic benefits of generalisation in modelling. Models

may be generalised in many ways, and this paper provides a systematic comparison of abstracting

the model and increasing its expressive power. It is argued that increasing a model’s expressive

power has two epistemic benefits. First, it de-idealises by removing a false but implicitly expressed

assumption from the model. Second, and more importantly, when the model result remains the

same generalisation has an epistemic benefit similar to that provided by robustness: it shows that

the model result does not depend on a false auxiliary assumption. Representations that omit from

representing some aspects of the systems they purport to describe are commonly called

abstractions. The generality of a model refers to the number of phenomena it can explain or predict,

or to the number of systems to which it applies (Matthewson and Weisberg 2009; Weisberg 2004,

2013; Lewis and Belanger 2015). A model-modification is epistemically beneficial if it justifiably

increases the modellers’ confidence in the truth of a model component or result. When the model

result remains the same, generalizing a model has an epistemic benefit which is similar to that

33

provided by demonstrating the robustness of the result. A generalisation may show that a false

assumption is not needed for deriving the results from the model. Abstracting a model means

describing the systems of interest in less detail, and this is achieved by making fewer assumptions

than before. When a model is abstracted, its ability to apply to a larger number of systems is bought

at the price of no longer being able to account for some properties. Increasing the expressive power

is often epistemically beneficial because it may show that one can prove a model result with fewer

false assumptions.

On the Relevance of Models

Melissa Vergara Fernández

Models are thought to misrepresent their targets in several ways. This makes the assessment of

their usefulness to understand phenomena far from straightforward. Indeed, the epistemic import

of theoretical models is a question that has concerned philosophers of science. It is now generally

agreed that models can be explanatory when they isolate causal mechanisms (e.g. Mäki, 2011;

Reiss, 2012) or provide causal information (to different extents) (e.g. Marchionni, 2017). Some

philosophers have also argued that models can yield understanding when they provide modal

knowledge (e.g. Grüne-Yanoff, 2013; Verreault-Julien, 2018; Ylikoski & Aydinonat, 2014) In this

paper I shall argue that, while these insights have allowed philosophers to determine what

theoretical models can do, they give an erroneous picture of actual scientific practice. For some

philosophers think that models must have epistemic import; otherwise, their use by scientists is

hard to justify (Grüne-Yanoff, 2009; Hindriks, 2008). I suggest that epistemic import (in the form

of explanatoriness or understanding) is not a sufficient nor necessary condition for a model to be

relevant in scientific practice. Hyman Minsky's theory of financial capitalism, which hasn’t been

sufficiently acknowledged in practice despite elucidating a mechanism of credit creation,

demonstrates that epistemic import is not sufficient for being relevant in practice. By contrast, the

Capital Asset Pricing Model has hardly any epistemic import. And yet, it continues to be important

in both asset pricing and corporate finance. William Sharpe got the Nobel for it. This demonstrates

epistemic import is not necessary for being relevant in practice. This model offered something

else, namely theoretical coherence with the larger neoclassical framework, which made it relevant.

The bottomline is that relevance of models, instead of epistemic import, is a more appropriate

criterion for philosophers to assess when it comes to understanding scientific practice. I discuss

two dimensions of this criterion.

References

Grüne-Yanoff, T. (2009). Learning from minimal economic models. Erkenntnis, 70(1), 81–99.

Grüne-Yanoff, T. (2013). Appraising Models Nonrepresentationally. Philosophy of Science,

80(5), 850–861. https://doi.org/10.1086/673893

Hindriks, F. (2008). False Models as Explanatory Engines. Philosophy of the Social Sciences,

38(3), 334–360. https://doi.org/10.1177/0048393108319414 Abstract INEM 2021

https://doi.org/10.1086/673893

https://doi.org/10.1177/0048393108319414%20Abstract%20INEM%202021

34

Mäki, U. (2011). Models and the locus of their truth. Synthese, 180(1), 47–63. Marchionni, C.

(2017). What is the problem with model-based explanation in economics? Disputatio, 9(47),

603–630.

Reiss, J. (2012). The explanation paradox. Journal of Economic Methodology, 19(1), 43–62.

Verreault-Julien, P. (2018). How could models possibly provide how-possibly explanations?

Studies in History and Philosophy of Science Part A. https://doi.org/10.1016/j.shpsa.2018.06.008

Ylikoski, P., & Aydinonat, N. E. (2014). Understanding with theoretical models. Journal of

Economic Methodology, 21(1), 19–36. https://doi.org/10.1080/1350178X.2014.886470

4C. Book Symposium

Jon Tinbergen and the Rise of Economic Expertise

Erwin Dekker, Jon Murphy, William Peden, Esther-Mirjam Sent

This is a book symposium on the recent book (June 2021, CUP) by Erwin Dekker ‘Jan Tinbergen

(1903-1994) and the Rise of Economic of Expertise. The panelists who have all worked on the

theme of economic expertise before will offer their reflections on both the epistemological

dimensions of economic expertise for (macro-)economic policymaking as well as the institutional

position of economic policy-experts in relation to democratically elected officials, government and

other experts. Jan Tinbergen, together with Ragnar Frisch the first recipient of the Nobel Prize in

Economics in 1969, worked most of his career at government institutes both nationally and

internationally, including the Dutch Bureau of Statistics, the Dutch Central Planning Bureau, The

Turkish State Planning Organization, the League of Nations, the United Nations and the GATT.

The book offers an analysis of his work starting in the 1930s for these various institutes as well as

the techniques and tools he developed in his work as national and later international economic

expert. As such he was part of a generation of economists who quickly rose in prominence as

policy experts for national governments and international organizations, a position economists

frequently occupy to this idea. The other panelists, next to the author, will specifically focus on

Tinbergen’s legacy in development economics, and the changes in expertise since his

contributions, the institutional and financial position of economic experts, as well as the contested

position of government-employed experts and the epistemological limits to economic expertise.

https://doi.org/10.1016/j.shpsa.2018.06.008

35

Keynote 2. Hayekian Behavioral Economics

Cass R. Sunstein (Harvard)

One of Friedrich Hayek’s most important arguments pointed to the epistemic advantages of the

price system, which incorporates the information held by numerous, dispersed people. Like John

Stuart Mill, Friedrich Hayek also offered an epistemic argument on behalf of freedom of choice.

He emphasized that outsiders know much less than choosers do, which means that interferences

with personal freedom, by those outsiders, will make choosers worse off. A contemporary

challenge to that epistemic argument comes from behavioral economics, which has uncovered an

assortment of reasons why choosers err, and also pointed to possible distortions in the price system.

But even if those findings are accepted, what should outsiders do? How should they proceed? A

neo-Hayekian approach would seek to reduce the knowledge problem by asking not what outsiders

want, but what individual choosers actually do under epistemically favorable conditions. In

practice, that question can be disciplined by asking five subsidiary questions: (1) What do

consistent choosers, unaffected by self-evidently irrelevant factors, end up choosing? (2) What do

informed choosers choose? (3) What do active choosers choose? (4) In circumstances in which

people are free of behavioral biases, including (say) present bias or unrealistic optimism, what do

they choose? (5) What do people choose when their viewscreen is broad, and they do not suffer

from limited attention? These kinds of questions can be answered empirically. An ongoing

program of research, coming from a diverse assortment of people, explores these questions, and

can be seen to be producing a form of Hayekian behavioral economics – Hayekian in the sense

that it can claim to be respectful of Hayek’s fundamental concerns. These conclusions are

illustrated with reference to the controversy over fuel economy standards, with an

acknowledgement that on broadly Hayekian grounds, the best approach might be to inform

consumers of potential savings, while using a corrective tax to control externalities.

5A. Economic Modelling 2

An Economic Model for Conceptual Engineering

Ryan Miller

Discussion of economic methods has generally revolved around philosophers concerns in the

foundations of economics. This paper reverses the usual relationship, and instead uses economic

methods to interrogate an important question in the foundations of philosophy. Trends in

philosophy have recently swung from analyzing existing concepts to attempting to change them in

ways that make them more coherent or socially desirable, a project called “conceptual

engineering” (Nado, 2021). Herman Cappelen (2018) presents a fundamental challenge to all such

projects, arguing that the stability of language shows that the intension and extension of our

concepts is outside of our conscious control. I meet Cappelen’s challenge to conceptual

engineering by providing an economic model of conceptual change, where language users

negotiate their shared semantics, but such negotiations are subject to significant transaction costs.

36

I elaborate and apply a formal economic model of semantic negotiation to show why language is

stable even though it is shaped in large part by conscious negotiations. The model has two

elements: first semantic values are understood as resource allocations, and second semantic control

is understood as Pareto optimality. Applying the model to semantic negotiations requires

estimating costs present in both the negotiation process itself and in the transfer of semantic

allocations, both of which impact allocative efficiency (Frech, 1979). I identify five psychological

sources for such transaction costs, and show that they are high enough to force stable allocations

in large diverse groups, but low enough to enable near-optimal allocations by small homogeneous

groups. The upshot for philosophy is that conceptual engineering programs focused on the

coherent use of concepts by philosophers have a greater chance of success than those aimed at

improving the social desirability of widely used race and gender concepts.

A pragmatic argument against model pluralism: the case of antitrust

economics

Edoardo Peruzzi

The paper addresses the issue of the limitations of pluralism in practice through a specific case

study, namely economic model pluralism in the courtroom. More specifically, we examine the use

of models in U.S. antitrust litigations to critically engage with what has become the pluralist

orthodoxy in much of philosophy of economics. In the aftermath of Rodrik’s Economic Rules

(2015), many authors have praised the benign virtues of greater pluralism in methods, aims and

topics admitted in economic research. Among them, several philosophers started to focus on

families of models rather than on single models as such (Aydinonat 2018; Kuorikoski and Lehtinen

2018; Grüne-Yanoff and Marchionni 2018, Veit 2019, 2021; Gräbner and Strunk 2020, Lisciandra

and Korbmacher 2021). Although these authors have different views on economic modelling, they

agree that multiple and quite different models of the same target are acceptable because they

improve the explanatory power of economics. Despite the widespread enthusiasm about model

pluralism, we show that having a set of alternative models to explain a phenomenon can be highly

detrimental at the pragmatic level. Our case study concerns the use of game-theoretic models of

strategic behaviour in US antitrust litigations (Werden 2008; Coate and Fisher 2012; Giocoli

2015). The same antitrust case can be interpreted in terms of different theoretical models, each of

whom may generate conflicting predictions. As a result, when economists appear as expert

witnesses in antitrust cases, the multiplicity of models undermine their testimonies, which are often

discarded by judges as not admissible (Langenfeld and Alexander 2010; Giocoli 2020). In the

courtroom – pace the heralds of pluralism – the existence of multiple models of the same

phenomenon seems to be regarded as evidence of the unreliability of economic science. Our paper

discusses the challenges that the case of antitrust economics raises for the advocates of model

pluralism and explores some possible alternatives.

References

Aydinonat, E. N. (2018). “The diversity of models as a means to better explanations in

economics”. Journal of Economic Methodology, 25(3):237–251.

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Coate, M. and Fisher J. (2012) “Daubert, Science, and Modern Game Theory: Implications for

Merger Analysis.” Supreme Court Economic Review 20(1): 125–182.

Giocoli, N. (2015). “Old lady charm: explaining the persistent appeal of Chicago antitrust”.

Journal of Economic Methodology, 22(1), 96–122.

Giocoli, N. (2020). “Rejected! Antitrust economists as expert witnesses in the postDaubert

world”. Journal of the History of Economic Thought, 42(2), 203–228.

Gräbner, C. and Strunk, B. (2020). “Pluralism in economics: its critiques and their lessons”,

Journal of Economic Methodology, online first.

Grüne-Yanoff, T. and Marchionni, C. (2018). "Modeling model selection in model pluralism".

Journal of Economic Methodology, 25(3):265–275.

Kuorikoski, J. and Lehtinen, A. (2018). “Model selection in macroeconomics: DSGE and ad

hocness”. Journal of Economic Methodology, 25(3): 252–264.

Langenfeld, J. and Alexander C. (2010). “Daubert and other gatekeeping challenges of antitrust

experts”. Antitrust, 25(3): 21–28.

Lisciandra C. and Korbmacher J. (2021). “Multiple models, one explanation”, Journal of

Economic Methodology, 28(2), 186-206.

Rodrik, D. (2015). Economics Rules: The Rights and Wrongs of the Dismal Science. Oxford

University Press

Veit, W. (2019). “Model Pluralism”. Philosophy of the Social Sciences, 50(2): 91–114. Veit W.

(2021) “Model diversity and the embarrassment of riches”, Journal of Economic Methodology,

DOI: 10.1080/1350178X.2021.1898660.

Werden, G. (2008). “The admissibility of expert testimony”. American Bar Association - Section

of Antitrust Law, Issues in Competition Law and Policy, Vol. I, Ch. 33, 801- 817.

A Notion of Relevance for Rational Decision Modelling

Malvina Ongaro

Decision theories have largely ignored the “first stage of deliberation” (Jeffrey 1965), i.e. the step

of the decision-making process in which the agent models the situation. Given that a decision can

be represented with different models, and that these models can lead to different recommendations,

then without a principled way to assess them the agent’s choice is under-determined. As any model

requires the agent to select the aspects of their situation that matter to the decision, an account of

rational decision modelling must include a notion of relevance. In addressing this issue, my first

task will be to set a clear vocabulary to refer to the concepts involved, starting from the grand-

world / small-world terminology with which these have been referred to since Savage (1954). The

first conclusion I reach is that the most rational model is the one that takes into account all and

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only the consideations relevant for the decision. I then address the question of what that means,

and adapting a definition from Cohen (1994) I define relevance for a decision as a matter of

providing reasons for some option. This contributes to a recent trend that explores the connections

between reasons and decisions (Dietrich & List 2013; Sher 2019). I suggest that, from a decision

theoretical perspective, the reasons involved in decision modelling should be explanatory reasons,

and I identify four different types of explanatory reasons leading to four different ways in which

something can be relevant, depending on the function it plays in decision-making. Given the scope

of my question, I focus on what I call “constitutive relevance”, which provides the content of the

decision model, and propose a formal definition of this concept. I conclude by suggesting some

connections for future work.

References

Cohen, L. J. (1994). Some steps towards a general theory of relevance. Synthese, 101(2), 171-

185.

Dietrich, F., & List, C. (2013). A reason based theory of rational choice. ‐ Nous, 47(1), 104-134.

Jeffrey, R. (1965). The Logic of Decision. New York: McGraw-Hill.

Savage, L. J. (1954). The Foundations of Statistics. New York: John Wiley & Sons. Sher, I.

(2019). Comparative value and the weight of reasons. Economics and Philosophy, 35(1), 103-

158.

5B. Human Well-being

Non-egoistic other-regarding preferences: evidence and welfare implications

Tobias Henschen

Two central tenets of Kant’s practical philosophy say that (1) “it is absolutely impossible to settle

with complete certainty through experience whether there is even a single case in which the maxim

of an otherwise dutiful action has rested solely on moral grounds” (Kant 1785: 22-3), and that (2)

there are two powers of desire: a lower one determined by a material object and a higher one

determined by the moral law (Kant 1788: 32-4).

The first tenet seems to be outdated in light of the empirical evidence that behavioral economists

say they can provide in support of non-egoistic other-regarding preferences (Fehr & Schmidt 1999,

Falk & Fischbacher 2005). Other-regarding preferences are preferences that an agent has for the

welfare of other agents. They are egoistic if the agent cares negatively for the welfare of other

agents and non-egoistic if she cares positively for it. Non-egoistic other-regarding preferences can

be regarded as special cases of a maxim that “has rested solely on moral grounds”. But the paper

defends tenet (1) by arguing that the evidence that behavioral economists provide in support of

these preferences remains inconclusive.

The paper points to tenet (2) to defend a traditional idea from welfare economics against a familiar

objection. The idea is that individual welfare is preference satisfaction, and the objection says that

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an agent cannot be said to fare well when satisfying non-egoistic other-regarding preferences

(Adams 1999: 87). The paper will argue that the objection can be rejected if tenet (2) holds: that

an agent can be said to fare well in the standard economic sense when satisfying egoistic (self- or

other-regarding) preferences (of the lower power of desire), and to fare well in a moral (or Kantian)

sense when satisfying non-egoistic other-regarding preferences (of the higher power of desire).

References

Adams, R. (1999). Finite and Infinite Goods. Oxford: OUP.

Falk, A. & Fischbacher, U. (2005). Modeling strong reciprocity. In H. Gintis, R. Boyd, S. Bowles

& E. Fehr (eds.), Moral sentiments and material interests. Cambridge, MA: MIT Press, pp. 193-

214.

Fehr, E. & Schmidt, K. M. (1999). A theory of fairness, competition, and cooperation. The

Quarterly Journal of Economics 114(3): 817-868.

Kant, I. (1785). Groundwork for the Metaphysics of Morals. Ed. and transl. A. W. Wood. Yale:

YUP, 2002.

Kant, I. (1788). Critique of Practical Reason. Transl. by W. S. Pluhar. Indianapolis: Hackett, 2002.

Labyrinths of Value: Ideas and Ideals of Well-Being in Contemporary

Economics

Ivan Boldyrev

The literature on alternative concepts and indicators of well-being – going beyond GDP and/or

standard utilitarian measures – is now quite voluminous. But how far have contemporary

economists actually incorporated these insights? The paper addresses this question empirically by

considering three channels of communicating and adopting new ideas. First, it surveys the new

editions of major economics textbooks in order to find out what kind of well-being measures are

suggested at the basic level. Second, it explores academic economic research and, by looking at

the sample of papers published in the top economics journals, tries to identify the implicit or

explicit understandings of well-being present there. Third, it investigates, which measures are

currently debated in the economic policy contexts. In this, it uses the notion of a normative

framework, which, apart from conceptualizing what individual and social welfare actually is,

includes the ways to operationalize/measure welfare. The crucial observation stemming from this

analysis is that so far, despite lots of conceptual effort and empirical work, academic economists

have been rather timid in actually applying alternative measures of human flourishing as a

normative benchmark for their analysis. Academic economics – in its representative mainstream

form – is not an avant-garde of debate around human flourishing. To be sure, analytical

commitments and motivations of academic economists in subscribing – or not explicitly

subscribing – to a given normative framework, and, in particular, in using certain measures of

individual or social well-being – could be quite complex. Indeed, the very distinction between the

normative frameworks does not always hold, and various theoretical or empirical syntheses are

possible. However, the share of attention paid to integrating alternative normative frameworks into

the academic economic analysis over the last decades is telling. Both the introductory textbooks

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(meant to digest the well-established knowledge of the previous decades) and applied work on

concrete well-being measures seem to be more aware of the need to ‘go beyond the GDP.’ Why is

that? One could suggest two groups of reasons – related, respectively, to theory and to applied

work. From the theoretical viewpoint, the general idea of economics as a technical formal science

is still quite strong. This technical discipline abstains both from the vicissitudes of normative

interpretation (for example, from the philosophical debate on subjective vs. objective measures of

well-being) and from the political debates surrounding this ethical inquiry. This would also explain

why other disciplines (such as development studies) are much more willing to adopt the new

normative framework and to use it in empirical research. Difficulties surrounding the precise

interpretations of the (quite elusive) concepts – be it happiness or functionings – could also

contribute to the difficulty in adopting these normative frameworks in mainstream economics.

Issues of measurement, the amount and quality of the data play the major role here. The typical

temptations of an economist (to avoid a normative debate by using a utility representation of

subjective welfare; to encapsulate both the dynamics of the economy and the policy strategy in a

series of numbers; to prefer the indicators, for which better statistical estimates could be derived

etc.) seem to be too strong not to yield to them. But this situation is not everlasting, and, judging

by the recent academic production of economists, and by the increasing amounts of data from the

alternative well-being indicators, we are to expect still wider usage of various well-being measures

in both theoretical and empirical work in economics.

In Defense of Methodological Temporalism about Well-Being

Gil Hersch

Most philosophers and economists working on well-being usually adopt, even if only implicitly,

some concept of temporal well-being. On such a view, talking about well-being at a moment is

meaningful. However, Ben Bramble (2018) argues that there is no such thing as temporal

wellbeing, and that well-being can only be understood as lifetime well-being. Bramble’s argument

is that existing well-being theories (hedonism, desire-satisfaction, and objective-list) fail when

conceived of as theories of temporal well-being, and so lifetime well-being is the only acceptable

view. In this paper I argue that even if Bramble is right about only lifetime well-being having

normative significance, lifetime well-being is not useful as a measurement construct. Nevertheless,

this does not leave us without recourse. Even if we hold some kind of error theory with respect to

temporal well-being, we ought to turn to temporal well-being as a useful construct for

measurement purposes. Temporal well-being as a concept lends itself to evaluating the

consequences of actions in the short term in a way that lifetime well-being simply cannot and it

makes it possible to meaningfully discuss well-being over periods shorter than a whole lifetime.

Last but not least, temporal well-being measures already exist and are widely used in economics

and psychology, whereas lifetime well-being measures do not. Since lifetime well-being is so

impractical a concept, we need temporal well-being as a tool to engage in real-world well-being-

related rational decision-making, both at the individual and at the public policy level. Even if only

lifetime well-being is real, temporal well-being provides a rough and workable estimate for

lifetime well-being that is sufficient to guide much well-being public policy. While in this article

I accept Bramble’s ontological commitment to lifetime well-being, I argue in defense of the

usefulness of methodological temporalism about well-being.

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5C. Preferences 2

Plural Identities and Context-Dependent Preferences

Constanze Binder

Rationality, defined as the consistency of context-independent all-things considered preferences,

is a standard assumption in wide parts of welfare economics. In recent decades, findings in

behavioral economics casted doubts on the consistency and context-independency of people’s

preferences as revealed in their choice behavior. In the light of these findings, some have advocated

to abandon preferences as the basis of welfare economic judgements (Sugden 2018). In this article

we draw on the literature that explores the relationship between rationality and a plurality of

motives (Steedman and Krause 1986, Davis 2011, Arlegi and Teschl 2012, Binder 2014), in order

to see under which conditions seemingly inconsistent and context-dependent choice behavior can

be the result of a plurality of (possibly conflicting) identities that become salient in different

spheres of a person’s life. For this purpose, a social choice framework is adopted to explore a

person’s intrapersonal aggregation process: she aggregates her plural motives or identities,

reflected by a profile of strict orderings, into an all-things- considered preference ordering over the

alternatives. In a first step it is shown how acyclicity of a person’s all-things-considered

preferences (and the impossibilities obtained in Binder 2014) can be avoided by allowing a weak

form of dictatorial power of parts of a person’s identity over different sub-domains of alternatives/

spheres of her life. In a second step, it is shown how such acyclic (and possibly incomplete) all-

things considered preferences can lead to context-dependent choice behavior, but nevertheless be

employed as the basis for preference-based welfare judgements. The article concludes with a

discussion how the obtained result connects to the psychological literature on (plural) identities

and intrapersonal conflict.

Uncontroversial preference purification in behavioural welfare economics

Måns Abrahamson

Behavioural welfare economics has lately been challenged on account of its use of the satisfaction

of ‘true preferences’—the preferences people would form under ideal reasoning circumstances—

as normative criterion. The critique contests what is taken to be an implicit assumption in the

literature, that true preferences are both subjective in nature and integrated (consistent, stable, and

context-independent). This assumption is suggested to be not only unjustified but unjustifiable—

true preferences are argued to be, a least sometimes, context-dependent. I explore the implications

of this ‘critique of the inner rational agent’ in this presentation. I argue that the critique does not

support a categorical dismissal of behavioural welfare economics as is sometimes suggested;

instead, the critique implies that behavioural welfare economists need to inquire deeper into the

reasons for observed context-dependent behaviour: behavioural welfare economists need to be able

to show that purifying people’s preferences will remove observed context-dependencies in any

particular domain of interest. This requires behavioural welfare economists to establish the

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‘source’ of any particular context-dependence in people’s decision process, which determines the

permissibility of correcting (i.e., arbitering between) people’s context-dependent choices. I discuss

three potential sources of context-dependency in this presentation: variations in a person’s

evaluative perspective; changes in a person’s beliefs about options’ characteristics and

consequences; and shifts in a person’s ability to act on her endorsed preferences. I argue that

context-dependency of the second and third kind provide bases for uncontroversial preference

purification and with that coherent welfare judgements in situations of context-dependent choice.

I further discuss a salient problem with classifying the source of context-dependence in people’s

decision process: coherent ‘as-if’ accounts can always be created that ascribe any context-

dependency to any ‘source’. Behavioural welfare economists therefore need to move beyond

modelling context-dependent choice to empirically test conjectures about the source of different

context-dependencies.

The Evolution of Preferences

Walter Veit

In this talk, I am drawing on previous work by Peter Godfrey-Smith, Kim Sterelny, and in

particular David Spurrett, to articulate and defend a thesis about the evolutionary rationale of

economic agency in the animal tree of life. Why is it that there exist agents in nature with

preferences representing expected values, i.e. utilities, of actions over uncertain outcomes? In other

words, why is it that our (microeconomic) models explain the behaviour of humans (and other

organisms)? A simple answer is to merely point to a straightforward similarity between utility and

fitness, but that leaves the mechanistic side out entirely. More is to be said. I want to make progress

on these questions, complex as they may be, by largely defending a single idea:

Pathological Complexity Thesis (PCT): The function of preferences is to enable the agent to

respond to pathological complexity.

The PCT is a complexity thesis about the relationship between life and the evolution of evaluative

choice. Pathological complexity can be measured by drawing on eco-evolutionary work in life-

history theory that attempts to model the evolutionary process in terms of an economic

optimization problem with multiple parameters and constraints for organisms. The more actions

are available for an organism, the more complex this optimization problem becomes. A cost has

been paid, an investment has been made in the costly functional architecture of a vulnerable

multicellular animal body, that eventually needs to be paid off. Unlike Spurrett, however, I will

argue that these demands are primarily driven not by environmental complexity, but by the

complexity of optimizing, i.e. trading off numerous functional needs. The complexity of this

'internal' problem will come to be represented in preferences that reflect both information about

the organism's state and its environment. Finally, I will present empirical support from both

behavioral economics and behavioral ecology in support of this thesis.

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6A. Gender, Power and Cyborg Science

Layering Behavioral Insights on Top of Existing Programs for Greater Gender

Inclusion

Fadi Makki, Nabil Saleh, Jana Kontar and Paola Schietekat

As part of a program implemented in conflict & post-conflict contexts, a number of ‘Gender Desks’

were launched to act as a mechanism to address grievances raised by women in Pakistan, resolving

them through referring them to local specialised organisations. Despite offering and publicizing

the Desks’ free-of-charge services (e.g. health, education, gender-based violence, etc.), the uptake

remained suboptimal due to several behavioural bottlenecks. Aside from potential lack of

awareness about the desk and/or knowledge about how to use its services, some insights from

behavioural sciences inform us that beneficiaries might not report even if they have the intention

to do so as they might be already under high cognitive load, making them less capable of making

difficult decisions. For this study, we designed a behavioural intervention layered on top of the

existing program to increase the uptake of Desks’ services, with two key elements: a) a

commitment card listing the services along with a calendar on which participants can select the

date and time of their preferred visit, a checklist of the steps required to report a grievance, and the

address and contact details; and b) a behaviourally informed reminder that reinforced the most

important information provided earlier in the commitment card. To test the effectiveness of the

intervention, we conducted a randomized controlled experiment (n = 100). Our results suggest that

exposure to the two elements of the intervention significantly improved uptake of the Desks’

services, doubling the number of reported grievances by women in the treatment group as

compared to the control group.

People Power: The Works of Public Sentiment

Mariam Thalos

- “Public Opinion Doesn’t Exist” (Pierre Bourdieu 1972/79)

Prevailing in the survey industry is the conception that public sentiment is a simple arithmetic

function of individuals’ sentiments, many of them held only privately, maybe even secretly.

Against this conception, the present paper argues that public sentiment is better construed as a

matter of publicly available evidence from which an arbitrarily selected individual in the relevant

public may work out a common sentiment. This conception diverges dramatically from a

conception of public sentiment as the weight of private thoughts or beliefs—items that may be

shared in a poll, at least when the appropriate survey methodologies are correctly administered and

analyzed. The reason to prefer a conception emphasizing public materials is perhaps obvious: only

that which enjoys public visibility has a chance of effecting change. If measuring public sentiment

is truly in service of taking stock of forces at work on the social-political stage, that is quite

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sufficient—as the arguments presented here will show—to prefer the approach on offer here over

those currently prevailing.

A Cyborg Spectre in Economic Theory: Have Cyborg Sciences Transformed

Modern Economics and Does it Matter for Philosophy of Economics?

Magdalena Małecka

Historians of the Cold War US social and behavioural sciences pay an increasing attention to the

ways in which the military funding shaped the direction, subject matter and methods of scientific

research (e.g. Rhode 2013, Crowther-Heyck 2006, Solovey 2013). In this context many scholars

focus on the development of the cyborg sciences, such as computer science, artificial intelligence,

cognitive psychology, systems theory, cybernetics. Historians and STS scholars analyse the

influence of the cyborg sciences on biology (Haraway 1981; Kay 1995), ecology (DeLoughrey

2002, Walker 2020), psychology (Heyck 2020, Edwards 1996), and modern economics (Mirowski

2002, 1999, Klein 2007, Erickson 2013).

The historical works on the relationship between the cyborg sciences and modern

economics are almost completely neglected by philosophers of economics. So far mainly Don Ross

has recognized their relevance for understanding theoretical and methodological affinities between

neoclassical economics and cognitive science (2014, 2005). My paper attempts to investigate

further to what extent and in which respect the cyborg sciences have influenced modern

economics. I intend to identify the core of the cyborg sciences, that is the features that all of them

possibly share, such as reliance on linear programming, or references to the computer, as metaphor,

or research device.

In the next step I will attempt to analyse whether in important theoretical findings of

modern economics we can trace any of the features of the cyborg sciences. If they can be identified,

then this means, I argue, that modern economics presumes a notion of choice as a procedure of

decision-making that is indifferent to the distinction between human and artificial agency. I intend

to explore the epistemological consequences of such a claim about agency underlying modern

economics.

References

Crowther-Heyck, H., 2006. Patrons of the revolution: Ideals and institutions in postwar

behavioral science. Isis, 97(3), pp.420-446.

DeLoughrey, E.M., 2013. The myth of isolates: Ecosystem ecologies in the nuclear

Pacific. Cultural geographies, 20(2), pp.167-184.

Edwards, P.N., 1997. The closed world: Computers and the politics of discourse in Cold War

America. MIT Press.

Erickson, P., Klein, J.L., Daston, L., Lemov, R., Sturm, T. and Gordin, M.D., 2013. How reason

almost lost its mind: The strange career of Cold War rationality. University of Chicago Press.

45

Haraway, D.J., 1981. The high cost of information in post-World War II evolutionary biology:

Ergonomics, semiotics, and the sociobiology of communication systems. Philosophical

Forum (Vol. 13, No. 2-3, pp. 244-278).

Heyck, H., 2020. Cognitive Psychology During the Cold War Era, 1955–1975. In Oxford

Research Encyclopedia of Psychology.

Kay, L.E., 1995. Who wrote the book of life? Information and the transformation of molecular

biology, 1945–55. Science in context, 8(4), pp.609-634.


Making Sense of The Explanation Paradox

Ahmet Dincer Cevik

Reiss’ ‘explanation paradox’ (hereafter EP, 2012) and subsequent ‘explanation paradox redux’

(2013) represent the climax regarding the criticism of the practice of modeling in economics. I will

first analyze the so-called ‘explanation paradox’ (2012). I argue that Reiss conflates Reiss’ use

“falsehood” is vague. In the antecedent of the premiss (1) EP-”Economic models are false- ” Reiss

appeals to Wimsatt’s concepts of falsehood. On the other hand, in the premiss (3) of the paradox,

namely that “only true accounts explain”, he uses the truth in its standard meaning. After that, I

contend that Reiss’ arguments miss the target in that his premises sometimes appeal to the

construction of models, and some other occasions appeal to in the application of models. A more

prominent result follows these conflations; in that case the paradox is not that how false models

explain, but that how models that include false antecedents explain. However, in this case, it

becomes an argument that is similar to that of Cartwright’s (1983) and it suffers from similar

complications as Cartwright’s argument about applicability of laws of physics. Hence, If it is taken

literally (in terms of truth or falsity of economic models) it is subject to charges levelled by

Hausman, Mäki (2013) and others. On the other hand, in my interpretation, the best way of

conceiving it is in terms of applicability. However, in this case, it becomes an argument that is

similar to that of Cartwright’s and it suffers from similar complications as Cartwright’s (1983)

argument about applicability of laws of physics. At the end, I will have showed that in both ways,

Reiss should modify the EP in order for his paradox to stay.

Broadening Formal Models of Individual and Collective Intentionality

Brian Epstein and Michael Ryall

Game theory models situations in which a set of forward-looking agents make interactive

decisions. The building blocks of game theory are general and parsimonious. They enable game

theory to model a broad range of phenomena with elegant mathematical structures. That said, the

field does face some notable challenges. One set of challenges involves modelling the epistemic

limitations of real-world decision makers. For example, a particular cognitive bias observed by

46

psychologists will be modelled by making particular modifications to a standard model. At present

there is no general model of bounded cognition that explains all or even a wide range of known

biases. Another example is modelling meso-scale social phenomena, such as groups, firms, and

institutions. Institutions and organizations are widely studied in game theory, but typically as

aggregates of agents coordinating with one another. Yet coordination only accounts for some of

the many cohesive features of institutions and organizations. One feature that is present in the

lion’s share of game theory work is its implicit belief-desire approach to modelling mental states.

In philosophy, many scholars argue that more elaborate models of cognition and action are

essential for explaining the practical reasoning and behaviors of individuals. Intention is the most

widely discussed mental state argued to contribute to practical activity of agents. Yet, it is only

one of many, including plans, reliance and so on. Some of this work has been incorporated in

computational models of interacting agents, but little has been adopted into game theory proper.

In social ontology, even reductive accounts of group agency are typically built from individuals

with a wide range of cognitive states, not just beliefs and desires. And both reductive and non-

reductive accounts theorize about features of groups that appear to be distinct from features that

aggregates of coordinating agents would possess—features such as group-level attitudes. The

project of which this paper is a part aims to approach game theory with a more elaborate ontology

of mental states, informed by work in action theory and social ontology. Rather than reducing

multiscale social phenomena to groups of coordinating agents or representing the epistemic

limitations via ad-hoc modifications to a belief-desire model, we accept a richer set of building

blocks at the outset. With these, we treat the cognitive lives of limited individuals and groups in

greater detail, and hope to provide more systematic explanations of the sort of game theoretic

challenges described above. We also clarify and correct claims in action theory about relations

among cognitive states of individuals, as well as between individuals and social groups. In this

paper, we sketch the foundations of a mathematical framework in which intentions perform two

broad functions. First, as is widely discussed, intentions improve the efficiency of agents with

epistemic limitations. Second, individual intentions perform a social function: pairs or groups of

agents who possess individual intentions may induce behaviors that are unavailable to belief-desire

agents. We also begin to extend this to a formal theory of groups, including group formation and

persistence, as well as aspects of group cognition. Our framework lends itself to addressing issues

that the formal literature on agency (such as the BDI literature in logic and computer science) has

not been able to treat, such as plan revision in a social context and in response to the plans of

others.

The Logical Structure of Economic Models

Raja Panjwani

This paper offers a logical analysis of economic models which justifies the practice of drawing

and taking seriously deductive inferences from unrealistic assumptions. It is shown that although

the assumptions of economic models have both true and false implications for their target systems,

it is possible to purify a model of its false implications to uncover a precisely definable, and

realistic, logical structure. I call this purification process logical reconstruction, and I illustrate

with an applied economic model that substantive conclusions of interest can be `reconstructed' as

elementary logical consequences of this structure. The possibility of logical reconstruction sheds

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new light on mathematical explanation in economics, and suggests a research program for

obtaining further methodological insights.

6C. Symposium: Reflection with and Without Rules

Institutional Economics and John Dewey’s Instrumentalism

Malcolm Rutherford

There has been considerable discussion concerning the relationship between John Dewey’s

pragmatic instrumentalism and institutional economics, but this literature has focused primarily on

Clarence Ayres and on issues of valuation. This paper give attention to the actual conduct of

economic investigations by institutionalists such as Wesley Mitchell, Walton Hamilton, John R.

Commons, and others. It is argued that many aspects of Dewey’s instrumentalism are clearly

displayed in the problem centered, investigational, and experimental methods employed by

institutionalists, and in their commitment to problem solving through social control. While the

standard criticisms of institutionalist methodology are found to be misplaced, some serious

difficulties with the application of Dewey’s instrumentalism to social science are located and

discussed.

Does the Inclusion of Social Preferences in Economic Models Challenge the

Positive-Normative Distinction?

Jack Vromen

Neo-Samuelsonian Methodology and Normative Economics: Answering

Hand’s Challenge

Don Ross

Hands (2013) was the first prominent commentator on economic methodology to explicitly signal

notice of a new entrant among the competing philosophies of core economic methods, which he

called “contemporary revealed preference theory” (CRPT). He identified “the most

philosophically sophisticated defense of CRPT” with the work of Don Ross; and subsequent to

Hands’s paper, Ross (2014) consolidated the view into what he calls a “neo-Samuelsonian

philosophy of economics” (NSEP). The present paper considers Hands’s major concern about the

adequacy of CRPT based on the resources of NSEP. The concern in question is that CRPT / NSEP

meets long-standing objections to earlier versions of revealed preference theory as a descriptive

modeling strategy at the expense of any basis for normative assessment. The master problem, from

which others follow, is that CRPT / NSEP is too accommodating of inconsistent preferences and

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too liberal in its identification of economic agency. This is a serious challenge if one agrees with

Leamer (2012) and Colander and Su (2018) (and many others) that economists are committed to

producing “policy science”. The response provided in the paper is summarised as follows. (1)

Economists’ normative ambitions should not extend to assessments of either rationality or well-

being, and this modesty of ambition follows from the motivations for NSEP. (2) Economic analysis

conducted according to NSEP allows for objective assessments of comparative efficiency of

policies in generation of surpluses in matrices of production and consumption, an ambition that

describes one of the leading traditional conceptions of welfare economics. (3) NESP incorporates

conceptual and measurement resources for comparative efficiency assessment as per (2) that do

not require over-riding subjective values of individual people, or making recommendations

conditional on people’s conformity to philosophical ideals of rationality. The normative ambitions

from which economists should retire can be entrusted to philosophers.

7A. Social Contract Theory, Social Welfare, and Social Cost

Using social preferences to specify an acceptable Social Welfare Function

Jack Vromen

This paper explores whether it is a good idea to base the specification of an appropriate Social

Welfare Function (SWF; in the Bergson-Samuelson tradition) on the social preferences identified

in social preference models. The two main underlying ideas are, first, that an acceptable social

welfare function should reflect the moral views of individuals on what public policy ought to attend

to and, second, that social preferences capture such moral views. Although social preference

models have been developed only relatively recently in behavioral economics, both underlying

ideas actually have a long pedigree in welfare economics. One of the attractions of the first idea

for welfare economists has been that welfare economics can stay within the “safe” confines of

positive analysis (Archibald 1959). The attraction of the second idea is that it seems to provide a

principled way to empirically investigate the moral views of individuals and thereby also to specify

an acceptable SWF. Yet in the paper also several drawbacks of the ideas are discussed, both of a

principled and practical kind. Among the principled ones are that the social preferences identified

in social preference models need not reflect moral views (or not the sort of moral views we are

after), and that, if they do, do not survive critical ethical scrutiny. Another principled objection is

that, if we base our specification of the SWF on observed social preferences, we then should not

include social preferences also in the individuals’ well-beings (as the arguments in the SWF, in

order to avoid fallacious double counting). This relates directly to the practical difficulty of how

to disentangle non-social preferences from social preferences so as to determine what preferences

should go into the individuals’ well-beings.

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Economics and Social Contract Theory

Cyril Hédoin

Normative economics is traditionally associated with utilitarianism and more generally with

welfarism. This is partly due to a mistaken understanding of the modern concept of utility. The

association finds however its origins in the wide endorsement by welfare economists and social

choice theorists of the figure of the benevolent dictator. The paper provides however a general

argument for the claim that economists should become more like social contract theorists. Social

contract theory can be divided into three kinds of approaches: Hobbesian contractarianism,

Humean conventionalism and public reason contractualism. Philosophically-minded economists

and philosophers using tools from economics have largely contributed to the first two brands, e.g.

(Binmore 1998), (Buchanan 1975), (Gauthier 1987), (Sugden 2018), (Vanderschraaf 2019).

However, with the exception of (Sen 2009), economists have largely ignored the last brand. I shall

make two more specific claims in light of this observation. First, on the basis of what I call the

social choice model of public reason, I argue that the tools of normative economics can be usefully

combined with a public reason account of justice and equity issues. Second, I explore how this

account can fit within what (Moehler 2018) calls a “multilevel social contract theory” combining

the three brands. I show how economics can contribute to advance toward a unified social contract

account of morality.

References

Binmore, Kenneth. 1998. Just Playing: Game Theory and the Social Contract. MIT Press.

Buchanan, James M. 1975. The Limits of Liberty: Between Anarchy and Leviathan. University of

Chicago Press.

Gauthier, David. 1987. Morals by Agreement. Oxford University Press. Moehler, Michael. 2018.

Minimal Morality: A Multilevel Social Contract Theory. Oxford, New York: Oxford University

Press.

Sen, Amartya. 2009. The Idea of Justice. Harvard University Press.

Sugden, Robert. 2018. The Community of Advantage: A Behavioural Economist’s Defence of the

Market. Oxford, United Kingdom; New York, NY: OUP Oxford.

Vanderschraaf, Peter. 2019. Strategic Justice: Convention and Problems of Balancing Divergent

Interests. Oxford Moral Theory. Oxford, New York: Oxford University Press.

Why Set a Carbon Tax at the Social Cost of Carbon?

Rebecca Livernois

Economists typically recommend a carbon tax on the basis of the economic theory of externalities

(Stavins 2011). One longstanding solution to the Pareto inefficiency caused by an externality is to

set a tax on the unpriced activity at the value of the externality in equilibrium, called a Pigovian

tax. Guided by this theoretical result, economists such as William Nordhaus (2014) use integrated

assessment models to estimate the value of the externality generated by carbon dioxide emissions,

50

called the social cost of carbon (SCC), with an aim of recommending an optimal carbon tax rate.

It is unclear, however, whether this inference drawn from a theoretical policy result to a real-world

policy recommendation is warranted. In this paper, I argue that setting a carbon tax at the SCC is

not fully justified by economic theory. First, the policy goal of achieving Pareto efficiency by

implementing a Pigovian tax is inappropriate for intergenerational policies, such as climate

policies, that affect the composition of the future population (Broome 2018). Second, Pigovian

policies are inapplicable in contexts, such as climate change, that are characterized by biases and

limited information. I then consider whether setting a carbon tax at the SCC could instead be

justified by the notion of a fair price, and specifically the view that individuals who contribute to

climate change by emitting carbon dioxide should pay the costs associated with those emissions

(Caney 2010; Sayegh 2019). This argument fails to justify pricing carbon emissions at the SCC,

however, because the SCC does not account for income inequality or differential historical

contributions to climate change. I conclude that a carbon tax should be conceived of neither as a

Pigovian policy nor a fair price, but rather as one of several policy tools that can be used to meet

a climate target.

References

Broome, John. 2018. “Efficiency and Future Generations.” Economics and Philosophy 34, no. 2:

221- 241.

Caney, Simon. 2010. “Climate Change and the Duties of the Advantaged.” Critical Review of

International Social and Political Philosophy 13, no. 1: 203-228.

Nordhaus, William. 2014. “Estimates of the Social Cost of Carbon: Concepts and Results From

the DICE-2013R Model and Alternative Approaches.” Journal of the Association of

Environmental and Resource Economists 1, no. 1/2: 273–312.

Sayegh, Alexandre Gajevic. 2019. “Pricing Carbon for Climate Justice.” Ethics, Policy &

Environment, 22, no. 2: 109-130.

Stavins, Robert N. 2011. “The Problem of the Commons: Still Unsettled after 100 Years.”

American Economic Review 101: 81-108.

7B. Symposium: The Economics of Disinformation –

Studying Human Behavior in the Infosphere

In Experts We Trust: Boosting COVID-19 Vaccination through Online

Interventions

Piero Ronzani

Counteracting reluctance to vaccination is one of the pressing challenges of the social sciences in

the fight against the covid-19 pandemic. The aim of the study is to test the effectiveness of a

debunking intervention targeting key doubts about vaccination, with a particular focus on the role

of experts. Through a longitudinal study along all the salient phases of the vaccination campaign,

we monitored a sample of about 3,000 people in Italy and the UK, collecting data on their

propensity to vaccinate and eliciting their key reasons, if they had any, for not receiving the

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vaccine. In study 1 (UK sample), intentions and behaviors of participants of the control group,

who received no information, are compared with those of the treatment group that received regular

corrections of the main misconceptions on vaccination. This information was supported by experts

in the form of a social norm. In study two (Italian sample), both the treatment and the control group

received the debunking information, but the message differed in form: half of the subjects received

a peer-supported social norm, and the other half received an expert-supported norm. This allows

us to study the effect of the source. The impact of the intervention is tested on both the propensity

to vaccinate and the actual decision to vaccinate recorded in a follow-up at the end of the

immunization campaign.

The contribution of fact-checking tips and monetary incentives to the

recognition of online scientific disinformation

Folco Panizza

Scientific disinformation can impose enormous economic and public health burdens, for instance

by diminishing the adoption of prophylactic measures during a health emergency, or by hindering

the development of measures to contrast anthropogenic climate change. What is even more

worrying is that scientific fake news comes in many different forms and is generally difficult to

spot by non-experts. Several types of interventions have been proposed to prevent the proliferation

of false information online, where most of the spreading takes place. A recently-proposed but yet

untested strategy to help online users recognise false content is to follow the techniques of

professional fact checkers, such as looking for information on other websites (lateral reading) and

looking beyond the first results suggested by search engines (click restraint). In a series of online

experiments (N = 5700), we present participants from the UK with these techniques before they

are asked to rate the scientific validity of science-related Facebook posts. We measure the adoption

and effectiveness of these techniques for different types of content that vary in source reputation

and topic. We compare the effectiveness of this intervention to monetary incentives (i.e., paying

participants to be accurate in their assessments) and their combination. We find that participants

using fact-checking techniques are significantly more accurate in their judgement than those who

do not. However, our data shows that providing information on these techniques is not sufficient

to increase their use – and therefore the accuracy of the judgement – unless the source is poorly

known. In contrast, participants who were offered a monetary incentive were overall more accurate

in their evaluation than the control group. We suggest that incentives can serve the purpose of

making the evaluation relevant, and could be combined with the use of fact-checking techniques

to counteract misinformation.

Nudging and boosting to promote informed decisions in online environments

Philipp Lorenz-Spreen

Public opinion is shaped in significant part by online content, the sources of which may be

journalistic, but also lay, and which can spread rapidly through social media and are

algorithmically curated (often non-transparent). This new and constantly evolving information

ecosystem is designed by platform providers primarily to attract the attention of users, not to

promote deliberate cognition and autonomous choice; information overload, finely tuned

personalization and distorted social cues, in turn, pave the way for manipulation and the spread of

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false information. Third-party fact-checking is currently used to remedy some of these outcomes

symptomatically, but due to its risk of censorship or allegations thereof, it is potentially prone to

undermine trust. Here, we address the question for an alternative solution: How can online

environments provide context and promote autonomy, so as to empower individuals to make

informed decisions themselves? This approach potentially avoids external judgements about

content, but requires the design of an environment that allows people to become their own fact-

checkers. To achieve this goal, effective web governance informed by behavioural research is

critically needed. In this work, we identify technologically available yet largely untapped cues that

can be harnessed to indicate the epistemic quality of online content, the factors underlying

algorithmic decisions and the degree of consensus in online debates. We then map out two classes

of behavioural interventions—nudging and boosting— that enlist these cues to redesign online

environments for informed and autonomous choice and provide concrete suggestions for their

implementation within online environments.

7C. Philosophy of Economics

Contextualist Variable Selection in Economics

Harold Kincaid

Variable selection in applied economics is an ongoing controversial subject. This paper attempts

to clarify and resolve some of the issues. I begin by distinguishing a variety of different issues that

might be at stake and look at some general normative philosophy of science claims about variable

selection, mostly coming from Woodward, that are largely misguided. I then turn to the issue in a

more tractable fashion as question about the choice of variables in a roughly multiple regression

framework where the goal is to find causes. I describe some standard examples of that framework

in demand analysis and growth empirics and describe various ways simple regression can lead to

causal inference errors. The majority of the paper then is looking at various proposals for more

sophisticated variable section: stepwise forward and backward selection, general to specific

modeling, AIC model fit statistics, Bayesian model averaging, and random forest machine learning

routines. Using simulated causal data, I show that all these techniques make systematic errors. The

moral of the story is the variable selection has to involve explicit casual models and the methods

appropriate for investigating them such as structural equation models.

Reason Explanation and Default Explanation in Economics

Silvia Lerner

There are two major kinds of explanation (among several) in science and epistemology: covering

law model explanations by canonical form (or explanation by subsumption) and explanation by

means of reasons. Explanation by subsumption is applied particularly in natural sciences, while

reasons explanation is applied by their supporters to social sciences and natural languages,

although there is no clear dividing line between the two types of applications. This work centers

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on the area of the explanation of action in economics. A discussion between Dray and Hempel has

acted to spark a study of their disagreement regarding the concept of explanation. They both aim

to construct an explanation that responds to the question: “why did agent A do B”? Dray proposes

a reason-based explanation: he subscribes to a model based on reasons; he puts forward “an

explanation which displays the rationale of what was done” (Dray, 1957). The concept of ‘rational

explanation’ he refers to, is a narrower one than the one that is often found in philosophical

literature. He says: “The goal of such explanation is to show that what was done was the thing to

have done for the reasons given, rather than merely the thing that is done on such occasions…”

(Dray, 1957). Hempel, on the other hand, true to his understanding, constructs a deductive-

nomological explanation, which he argues requires no change to the logical form. Our proposal

consists of constructing an appropriate default explanation that avoids the difficulties of both

proposals. The strategy we will use consists of reconstructing the reasons as defaults. To do so we

will provide default logic tools and will also introduce minimal elements of a normative logic.

Why Seeing Economics as a Methodological Approach Threatens Objectivity:

A Perspective from Feminist Philosophy of Science

Teemu Lari

Many economists seem to regard economics as a discipline united by its methodological approach

rather than its subject matter. The approach is constituted by fundamental assumptions such as

maximizing behavior, equilibrium, and stable preferences (e.g. Becker, 1976; Lazear, 2000). In

this paper, I adopt and refine the account of objectivity developed by the feminist philosopher

Helen Longino (1990, 2002) to study whether economics can produce objective knowledge if it is

conceived this way. I argue that it cannot, but for another reason than usually suggested. While

feminist critics usually blame biased values and methodological assumptions (e.g. Ferber &

Nelson, 1993), I argue that the view of an epistemic community united by a methodological

approach rather than some intellectual goals is problematic in the first place. Longino presents four

social norms, the adherence to which secures the objectivity of an epistemic community. Here,

objectivity means that the community over time corrects errors and biases in the knowledge it

produces. I demonstrate that Longino’s account implicitly contains a further precondition of

objectivity, which has received insufficient attention: objectivity requires epistemic communities

to reflect critically on their intellectual goals. I argue that economics conceived as a

methodological approach fails to satisfy this precondition. Appropriate reflection on intellectual

goals also requires considering goals that are likely not reached by using the prevalent

methodological norms, so fixing the methodology by treating it as essential to the community

inappropriately constrains the critical examination of intellectual goals. This entails that objectivity

requires openness to methodological plurality: deciding the required methodological approach(es)

should only come after critically discussing the relative importance of various questions about,

and perspectives to, a shared subject matter. Finally, drawing on power-related concerns (e.g.

Fourcade et al., 2015), I counter a potential objection to the goal-reflecting responsibility of

economics.

References

Becker, G. S. (1976). The Economic Approach to Human Behavior. University of Chicago Press.

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Ferber, M. A., & Nelson, J. A. (Eds.). (1993). Beyond Economic Man: Feminist Theory and

Economics. University of Chicago Press.

Fourcade, M., Ollion, E., & Algan, Y. (2015). The Superiority of Economists. Journal of Economic

Perspectives, 29(1), 89–114. https://doi.org/10.1257/jep.29.1.89

Lazear, E. P. (2000). Economic imperialism. The Quarterly Journal of Economics, 115(1), 99–

146.

Longino, H. E. (1990). Science as Social Knowledge. Princeton University Press. Longino, H. E.

(2002). The Fate of Knowledge. Princeton University Press

Keynote 3. Pure Risk Paternalism in Welfare Economics:

What it is, and whether and how to avoid it

Johanna Thoma (LSE)

My talk explores the implications for welfare economics of a thesis that has found increasing

popularity in the philosophical decision theory literature in recent years, namely the thesis that

rationality is permissive under risk: An agent’s evaluation of outcomes together with the

probabilities she assigns to them do not uniquely determine how she should choose under risk; two

agents who value outcomes in exactly the same way and assign the same probabilities may yet

choose differently under risk, expressing different levels of ‘pure’ risk aversion or risk inclination.

There are different ways of formally accommodating such permissiveness, and I argue that the

permissiveness thesis is not inconsistent with orthodox expected utility theory given the right

interpretation. But permissiveness under risk makes possible a new form of potentially problematic

paternalism when making or recommending choices on behalf of another — the paternalism

involved in overriding, or failing to defer to an agent’s own attitudes to risk (even while,

potentially, respecting her evaluation of outcomes), for instance, when making a risk neutral choice

on behalf of a risk averse agent. I argue that various methods in applied welfare economics exhibit

this kind of paternalism, explore reasons for taking this to be problematic, and suggest ways of

avoiding it.

8A. Critical Realism, Essentialism and Markets

Getting Causality and Power into Economic Analysis: Contributions from

Philosophy and Critical Realist Sociology

Daniel Finn

Much critical realist work in economics has ignored two important resources. The first is critical

realist sociology (especially the work of British sociologist Margaret Archer), and its analysis of

social structures, which are understood as systems of social relations among social positions. Such

https://doi.org/10.1257/jep.29.1.89

55

relations are ontologically real and generate restrictions and opportunities that will shape the

decisions of persons within them. The second resource is the analysis of power provided by

philosopher Thomas Wartenberg. Power operates in a “field” rather than as a direct relation

between two persons. Person A has power over person B by a restriction (B must do X, or some

bad result Y will happen to B), where Y would usually be imposed by others who take that action

based on a judgment by person A. Combining these two resources, social structures exert causal

power over the persons within them. In the social structure we call a market, the prices generated

by decisions have causal impact as restrictions and opportunities that the market exerts, and which

are influential at a distance through the pecuniary externalities that typify market transactions. This

analysis calls attention to the real relations among positions that make up the market for any

particular good (instead of abstractly applying a law of supply and demand). It also highlights

other, non-price restrictions and opportunities that constitute the market, such as contract and labor

laws, worker expectations concerning holidays and bathroom breaks, consumer expectations about

environmental sustainability, etc. This allows many of the institutional concerns of heterodox

economists to enter economic analysis on a par with prices. This realist view of markets provides

an alternative resolution of several debates, e.g., that between Daniel Hausman and Uskali Mäki

on realism in economics.

Taxonomic Definition in Economics: Human Aims, Essences, and Kinds

Christian Frasser and Gabriel Guzman

Taxonomic definition, proposed by Hodgson (2019), is a definitional program that seeks to provide

scientists with a common understanding of terms. Taxonomic definition is regarded as the device

responsible for ensuring that scientists refer to the same phenomena. In that sense, taxonomic

definition is prior to analysis and empirical work. There are two different ways to set taxonomic

definitions. In the first, the essentialist way, a taxonomic definition is a categorization resulting

from the identification of essences. In the second, the non-essentialist way, a taxonomic definition

does not depend on essences and is rather decided by scientists according to epistemic

convenience. We show that insofar as taxonomic definition is prior to analysis, the alleged

agreement on a definition can be reached regardless of the type of analysis to be conducted,

whether descriptive, explanatory, or predictive. Thus, the actual claim of taxonomic definition is

that even researchers whose analysis pursue opposite aims can achieve a prior consensus over the

meaning of a term. What justifies this confidence in a prior consensus despite the admission that

definitions may answer to different aims? We argue that it is the assumption that essences offer a

privileged scheme of classification that ultimately warrants this confidence. Through the

distinction between Kinds (with big K) and kinds (with small k), two results are found. First, even

if one endorsed the assumption of the privileged status of essentialist classification, the essentialist

way could not be successfully implemented in economics because essences are either unavailable

or useless. Second, the non-essentialist way cannot warrant the claim that taxonomic definition

can provide us with a prior consensus. In conclusion, once taxonomic definition is stripped of

essentialism, the pretension to provide scientists with a single commonly accepted definition

achieved before analysis does not stand anymore. Different aims pull definitions into different

directions.

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The Ethics of Market Creation: Changing Behaviour by Adding an Option

Lukas Fuchs

The creation of new markets can introduce new options for consumers. Just in the last century,

cars, vitamin pills and smartphones were introduced to the market. Introducing new green products

into the market, such as green energy or green cars, may induce consumers to change their lifestyle.

The creation of markets is not reserved for private entrepreneurs; states, as well as other actors in

civil society, can shape and create markets. A new option, which is superior to the existing ones,

may change consumers’ consumption choices, without the need for coercion, incentive or nudge.

Should policy aim to change citizens' behaviour by creating markets in which new, say healthy or

green, products can be purchased? The ethics of changing other people's behaviour is subject to

intense debate, particularly when brought about through public policy. The ethics of coercion,

incentive and nudge has been discussed extensively in the literature. This paper, by contrast, will

analyse the ethics of adding an option as a mechanism for behavioural change. May states change

individual behaviour by adding options in the market? What are the constraints of such policy?

How does the ethical status of this mechanism compare to coercion, incentive and nudge? This

paper addresses worries that could be raised against market creation. After introducing adding an

option and market creation as mechanisms of behavioural change, the paper compares adding an

option with the other forms of behavioural change on different evaluative criteria, namely freedom,

autonomy and paternalism. The overall argument is that adding an option is comparably soft on

these parameters.

8B. Game Theory and Experimental Economics

Salience, Dominance, and Social History: The Trust Game Revisited

Andre Hofmeyr, Harold Kincaid, Brian Monroe

The investment game of Berg et al. [1995], commonly referred to as the trust game, has become

one of the most popular behavioural measures of trust in the social sciences. Proponents emphasise

that amounts sent in the game can be used to draw inferences about differences in trust across

societies and cultures, while other researchers argue that amounts sent are confounded by altruistic

motives, risk preferences, and subjective beliefs. We evaluate a set of experiments, conducted in

2018 with 388 students at the University of Cape Town, designed to investigate these potential

confounds, and other fundamental methodological aspects of the way the game is usually

instantiated in the lab. We focus here on whether the trust game satisfies Smith’s [1982] precepts

of salience and dominance, and whether the provision of “social history” information influences

behaviour in the game, contrary to the original findings of Berg et al. [1995]. We argue that typical

implementations of the trust game undermine both salience and dominance given the complex

calculations that subjects need to carry out to determine the mapping between actions and

monetary rewards in the experiment. We find that a simple modification to the experimental design

that provides complete and consistent information to participants, thereby promoting salience and

dominance, has a marked impact on both amounts sent and amounts returned in the game. Despite

this change in behaviour, beliefs about play in the game are pessimistic relative to the actual

amounts that were returned by player 2. Finally, we find that providing social history information

57

in a way that participants can actually understand, has a large, positive impact on amounts sent.

Our research clearly demonstrates, therefore, that information, generally, and institutions,

specifically, matter for behaviour in experiments.

References

BERG, J., J. DICKHAUT, AND K. MCCABE (1995): “Trust, Reciprocity, and Social History,”

Games and Economic Behavior, 10, 122-142.

SMITH, V. L. (1982): “Microeconomic Systems as an Experimental Science,” American

Economic Review, 72, 923-955.

What is the Standard of Care in Development Economics?

Marcos Picchio

Central to the experimental approach to development economics is the use of randomized

controlled trials (RCTs) to evaluate the effectiveness of prospective socioeconomic interventions.

The use of RCTs in development economics raise a host of ethical issues which are just beginning

to be explored. In this paper I address one ethical issue in particular: the routine uses of the status

quo as a control when designing and conducting a development RCT. Drawing on the literature on

the principle of standard care in clinical ethics as well as considerations of distributive justice in

non-ideal circumstances, I argue the practice of using the status quo as a control is largely justified.

In closing, however, I add an important qualification to address the concern my assessment is

overly permissive.

Phenomenological Game Theory

Nicholas Sooy

Opponents of Rational Choice Theory (RCT) have rejected it for making unrealistic assumptions

and false behavioral predictions. Since behavior is often shaped by psychology, such opponents

would argue that we should abandon a priori models for more empirically informed ones.

Proponents of RCT, on the other hand, have defended such a priori models as useful, even if they

are not realistic. Proponents have offered several competing theories of why such models are

useful. For example, such models may inform us about how strategic interaction could play out in

a credible counterfactual world, or that through simplification such models isolate and describe

real causal processes, or that unrealistic micro-economic assumptions do not matter so long as

such models provide micro-foundations for predicatively accurate macro-economic models. This

paper proposes an alternative interpretation of micro-economic models, a phenomenological

interpretation. Just as physical laws give necessary conditions which human behavior must obey,

so do laws of phenomenology. Phenomenology is classically an a priori discipline which describes

the structures of representation. Thus, RCT models are explanatorily useful insofar as they describe

the necessary structures of representing strategic interactions, and insofar as they identify limits to

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the representation of social information. As such, micro-economic models should be limited to

only these tasks, and extending these models beyond these tasks can lead to false predictions. This

interpretation will be illustrated with reference to epistemic game theory and theories of focal point

formation. An implication of this interpretation is that just as we can distinguish mechanical limits

to human behavior from physiological ones, so we may also be able to distinguish

phenomenological limits from psychological ones. It may be possible to distinguish heuristics and

biases which result from psychological limitations of the human brain from those which result

from necessary representational or computational limits on any possible mind.

8C. Freedom, Inequality and Fairness

Objective fairness

Conrad Heilmann and Stefan Wintein

To many, fairness seems quintessentially subjective. It is associated with feelings of being treated

fairly or unfairly. We will argue that it is fruitful to see fairness as an at least partly objective

concept. Doing so will be significant for expanding its role in normative economics and political

philosophy. There are live research programmes in both philosophy and economics that employ

subjective and objective fairness. Subjective conceptions of fairness are typically based on the

notion of ‘envy-free’ preferences. They are used in philosophy (e.g. Olson 2018, 2020, Fleurbaey

2021), but are most popular in economics (e.g. Varian 1975, Arnsperger 1994, Thomson 2011). In

contrast, objective conceptions of fairness turn “a blind eye to the wishes and preferences of the

parties involved” (Rescher 2002:31). They are typically based on the notion of proportional

satisfaction of individual claims to a good. They are used in economics (e.g. Herrero and Villar

2003, Thomson 2015), but are most popular in philosophy (e.g. Broome 1990, Hooker 2005, Piller

2017). We defend three claims: (1) Objective fairness theories in philosophy and economics, while

developed by and large in isolation from each other, are complementary: when combined, they

have the potential to compensate for their respective weaknesses. (2) Subjective fairness theories

have a surprisingly high degree of ‘axiological objectivity’: that is, their fairness conception has

significant non-subjective, person-invariant elements. For instance, the envy at play in ‘envy-free’

preferences is supposed to be impersonal. (3) Subjective fairness theories have a surprisingly large

extent of ‘epistemic objectivity’: that is, the knowledge claims about fairness they make have a

high degree of interpersonal validity, for instance, ‘envy-free’ preferences do not rely on

interpersonal comparisons of utility. Hence, there’s more objectivity to fairness than meets the eye.

References

Arnsperger, C. (1994). Envy-freeness and Distributive Justice. Journal of Economic Surveys

8(2), 155-186.

Broome, J. (1990). Fairness. Proceedings of the Aristotelian Society, 91, 87-101. Fleurbaey, M.

(2021) Economics and Economic Justice, The Stanford Encyclopedia of Philosophy (Summer

2021 Edition), Edward N. Zalta (ed.), URL = .

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Herrero, C., & Villar, A. (2001). The three Musketeers: four classical solutions to bankruptcy

problems. Mathematical Social Sciences, 42, 307–28. Hooker B (2005) Fairness. Ethical Theory

and Moral Practice 8: 329-352.

Olson, K.A. (2018) Impersonal Envy and the Fair Division of Resources. Philosophy & Public

Affairs 46(3), 269-292.

Olson, K.A. (2020). The Solidarity Solution: Principles for a Fair Income Distribution. Oxford

University Press.

Piller, C. (2017). Treating Broome Fairly. Utilitas 29: 214-238.

Rescher, N. (2002). Fairness Theory & Practice of Distributive Justice. Taylor and Francis.

Thomson, W. (2011). Fair Allocation Rules. In: Arrow, K.J., Sen, A.K., Suzumura, K. (eds.)

Handbook of Social Choice and Welfare, Elsevier, 393-506.

Thomson, W. (2015). Axiomatic and game-theoretic analysis of bankruptcy and taxation

problems: an update. Mathematical Social Sciences 74: 41-59.

Varian, H.R. (1975). Distributive justice, welfare economics and the theory of fairness.

Philosophy and Public Affairs 4: 223-47

Mismeasuring Inequality of Opportunity

Lennart Ackermans

Recent decades have seen an increased interest in the country-wide measurement of inequality of

opportunity by economists. Most studies use a set of related theoretical frameworks that have been

developed by John Roemer, Dirk Van de gaer, Marc Fleurbaey and others. The dominant ex-

ante approach to measuring inequality of opportunity focuses on inequality betweens groups of

people who share the same circumstances. When the difference in advantage between groups is

greater, this approach assumes, there is more inequality of opportunity. To measure inequality of

opportunity, then, means to quantitatively estimate the advantage of each group (with respect to

an outcome type of choice), and apply an inequality index such as the gini index to these estimates.

I identify two ways in which one can normatively defend the ex-ante approach, as a method that

captures a philosophically viable concept of inequality of opportunity. However, I argue that the

approach fails to capture the true level of inequality of opportunity as understood in both ways.

The methods fail because, in order to measure a normatively viable concept, they should estimate

causal quantities rather than merely statistical descriptions of differences between groups. In

particular, one needs to use the causal contribution of a group’s circumstances to their outcomes.

Using tools from the causal modeling literature, I show that these causal contributions are in

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practice hard to impossible to measure. I conclude that the estimates produced by ex-ante methods

might be too biased to be useful.

Paradoxes of Strategic Commitment: Freedom to Lose or Loss of Freedom?

Kevin Leportier

In game theory, strategic commitment is understood as the act of restricting oneself to follow some

course of action in order to influence someone else’s choices. The idea that deliberately losing

options can make someone better off (by changing other agents’ incentives to one’s advantage)

has a paradoxical flavour, often noted in textbooks and introductions to game theory. There would

at times exist a trade-off between what is sometimes called ’freedom to choose’ or ’freedom to

act’ and the increase in the payoff that can be obtained by committing oneself. Or, as Dixit (2008)

puts it, ’freedom to choose is freedom to lose’. In this paper, I take a deeper look at this paradox

and the trade-off it suggests. I argue that it is not well-thought-out because of the confusion

surrounding what it means to be free to act in a game. In game theory, giving someone a

commitment opportunity is usually modelled by giving him more—not less—possible courses of

actions. And the fact that someone can get a higher payoff when he has more courses of action is

hardly surprising. To save the paradox, I give an account of what it means to be ’negatively’ free

in a game, in the sense of not being prevented by other agents to get what one may want. It is

excluded by this perspective that tying one’s own hand count as a restriction of freedom. But then

a different paradox appears, as reducing someone’s action set may result in increasing her negative

freedom, because it can motivate other agents to stop preventing her to reach certain outcomes.

Being ’free to lose’ is just losing freedom. The paradox of strategic commitment would be that, on

the whole, less choices of action give more freedom, and it leads to reconsider preconceptions

about negative freedom.

9A. Macro, Financial Economics, and Rational Expectations

The Propensity Interpretation of Rational Expectations

Kobi Finestone

One of the distinctive features of economic analysis (as opposed to research in the natural and

biological sciences) is that economic agents are deliberative beings capable of making informed

decisions based upon what they believe will happen in the future. These forward-looking beliefs,

or expectations, are causally efficacious in the sense that what one believes about tomorrow will

influence how one behaves today. As a result, economic models often incorporate formal

representations of expectations. These representations generally take the form of probability

distributions which cohere to the standard Kolmogorov axiomatization of probability theory.

However, in order to construct consistent and operational intertemporal models, many prominent

economists have advocated for the imposition of additional constraints on these formal

representations. These additional constraints are known as the rational expectations hypothesis.

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The rational expectations hypothesis entails that the probability distribution representing

expectations be identical to the probability distribution governing the data generating process. How

then to interpret these two kinds of probabilities? There are a number of prominent interpretations

of probability which posit different ontologies and which have different epistemic implications.

Traditionally, expectations have been interpreted as subjective mental states reflecting what an

individual either does or ought to believe conditional on an information set. However, little has

been written on how best to interpret the objective probabilities governing the data generating

process. In this article I defend the thesis that in economics both expectations and objective

probabilities ought to be interpreted as propensities. In this sense, a propensity is a dispositional

property which can give rise to particular mental states or series of events. I further defend this

thesis by demonstrating how this unified interpretation of probability clarifies the ontological

commitments of the rational expectations hypothesis and thereby is instrumental in evaluating the

use of this hypothesis in economic analysis.

Radical Disagreement in Macroeconomics: The Case of Modern Monetary

Theory

Gabriele Contessa

Modern Monetary Theory (MMT) is a heterodox macroeconomic theory that has been recently

thrown into the spotlight by the support of a couple prominent leftist US politicians. Its sudden

and unexpected popularity has led to a few border skirmishes between mainstream and MMT

economists. While disagreements among economists are not uncommon, the disagreement

between mainstream and MMT economists appears to be radical. Mainstream economists seem to

think that MMT is pseudo-scientific bunk, while MMTers seem to think that mainstream

economists are too enamored with their mathematical models to pay attention to how the economy

actually works. A clear-cut sociological divide reflects the apparent breadth and depth of the

disagreement between the two camps. MMT economists operate largely at the margins of the

economics profession. There seem to be at least two possible explanations of this divide.

According to an internal explanation, MMT economists operate outside of the economic profession

because their ideas are as obviously wrong as those of flat-earthers or creationists. According to

an external explanation, MMT economists are relegated to the margin of the profession because

mainstream economists occupy all the key positions in the profession and shut out anyone who

does not share the methodological and ideological tenets of mainstream economics. This paper

argues that neither of these explanations is entirely correct. While there are some genuine

disagreements between mainstream and MMT economists, the breadth and depth of these

disagreements is often exaggerated by both sides. This, I argue, results from a lack of mutual

engagement and understanding between the two sides, which is partly due to external rather than

internal factors.

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Testing Concerns about Financial Economics

Conrad Heilmann, Marta Szymanowska and Melissa Vergara Fernández

Testability in financial economics has been a recent concern. Two central theories, the CAPM

(Sharpe 1964) and the efficient market hypothesis (EMH) (Fama 1970), have been characterized

as ‘untestable’: the CAPM because the market portfolio is unobservable (Roll 1977); the EMH

because it needs to be tested jointly with some model of equilibrium (Fama 1991). Yet, the

proliferation of models aiming at testing them continues. Furthermore, some financial scholars

think that the ongoing empirical work advances the understanding of how capital markets work

(e.g., Fama and French 2004, Campbell 2014), while others disagree raising concerns about lack

of scientific progress (e.g., Cochrane 2011, Ross 2017, Harvey and Zhu 2017, Harvey and Liu

2019). This is puzzling. Not only is there a tension between fundamental concerns about testability

and a proliferation of empirical work. There is also a disagreement among financial scholars on

how to interpret that tension. We offer critical and constructive reflection on the concerns about

testability and foster scientific progress in financial economics. We reach a twofold conclusion.

First, we diagnose underdetermination as the source of challenges to testing in asset pricing

(Duhem 1906/1954, Quine 1951, Gillies 1993). We show that the CAPM is a straightforward case

of underdetermination whereas the EMH is a more severe case that involves an intricate ‘joint

hypothesis’. Hence, the worries about the lack of progress of the science in light of Roll’s (1977)

critique of the CAPM are overblown. Second, financial scholars are right to worry about scientific

progress in light of the ‘joint hypothesis’ problem, but they err by focusing solely on testing. We

identify important trade-offs between epistemic values (Kuhn 1977, Stanford 2017), in particular

between the values of ‘accuracy’ and ‘broad scope’, and show how more explicit awareness of and

reflection about these trade-offs can foster scientific progress.

References

Campbell, John Y., 2014, Empirical asset pricing: Eugene Fama, Lars Peter Hansen, and Robert

J. Shiller, Scandinavian Journal of Economics 116, 593–634.

Cochrane, John H., 2011, Discount rates, Journal of Finance 66, 1047–1108. Duhem, Pierre,

1954, The Aim and Structure of Physical Theory (Princeton University Press, 1906/1954).

Fama, Eugene F., 1970, Efficient capital markets: A review of theory and empirical work,

Journal of Finance 25, 383–417.

Fama, Eugene F., 1991, Efficient capital markets: II, Journal of Finance 46, 1575–1617.

Fama, Eugene F., and Kenneth R. French, 2004, The capital asset pricing model: Theory and

evidence, Journal of Economic Perspectives 18, 25–46.

Gillies, Donald, 1993, The Duhem Thesis and the Quine Thesis. in: Philosophy of Science in the

Twentieth Century. Oxford: Blackwell, Philosophy of Science, The Central Issues, ed. M. Curd

and J. A. Cover pp. 302–319.

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Harvey, Campbell R., and Yan Liu, 2019, A census of the factor zoo, Working Paper, Duke

University.

Harvey, Campbell R., and Heqing Zhu, 2016, ... and the cross-section of expected returns,

Review of Financial Studies 29, 5–68.

Kuhn, Thomas, 1977, Objectivity, Value Judgment, and Theory Choice, in The Essential

Tension: Selected Studies in Scientific Tradition and Change (Chicago and London: University

of Chicago Press, 1977).

Quine, Willard Van Orman, 1951, Two dogmas of empiricism, in Willard Van Orman Quine,

ed.: From a Logical Point of View . pp. 20–46 (Harvard University Press).

Roll, Richard, 1977, A critique of the asset pricing theory’s tests, part I: On past and potential

testability of the theory, Journal of Financial Economics 4, 129–176.

Sharpe, William, 1964, Capital asset prices: A theory of market equilibrium under conditions of

risk, Journal of Finance 19, 425–442.

Stanford, Kyle, 2017, Underdetermination of Scientific Theory (The Stanford Encyclopedia of

Philosophy (Winter 2017 Edition), Edward N. Zalta (ed.))

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