It is sometimes claimed that forgiveness involves the cancellation of a moral debt. This way of speaking about forgiveness exploits an analogy between moral forgiveness and economic debt-cancellation. Call the view that moral forgiveness is like economic debt-cancellation the Economic Model of Forgiveness. In this article I articulate and motivate the model, defend it against some recent objections, and pose a new puzzle for this way of thinking about forgiveness.

This article critically evaluates Itzhak Gilboa, Andrew Postlewaite, Larry Samuelson, and David Schmeidler’s account of economic models. First, it gives a selective overview of their argument, highlighting its emphasis on similarity and their oversight of the role of idealizations in economics. Second, it proposes a sketch of an account of models as arguments and argumentative devices. This account not only sheds light on Gilboa et al.’s approach, including its shortcomings, but also identifies key challenges in model-based inference, (...) suggesting a fresh perspective on the uses of models in economics for diverse objectives. (shrink)

Human civilization is very clearly reaching a point of critical mass when it comes to technology and how it transforms culture and the economics that is therefore driven forward. The conversation around the practical aspects of generative artificial intelligence (Chat GPT, Q Star, Bard, Claude, Genesis, Firefly, and others) and their ethical implications is massively trending. The political conversations around it are slow to catch up but will soon take over once the general public feels their impact, which is likely (...) to happen in the next two to three years. -/- What is not being spoken of is the need for new economic models that can integrate the enormous and continuous shifts in trade that will occur, as we continue to implement more efficient manufacturing and logistics. Things like 3D printing in hub regions, the automation of transportation, augmented and virtual reality, and new creativity-based industries will all disrupt capital markets as well as social systems due to what we could call "meta-scarcity", which is to say, "the scarcity of scarcity"; In effect, we will lack the scarcity to maintain predictive power over the future. This is because when technology is capable of optimizing for creativity, people come up with new demands, and when new demands are supplied as quickly as they arise, no one is capable of knowing what kind of trends the market will take, yet it is necessary to try as public discussion could beneficially shape the economic landscape. (shrink)

As the title of this essay suggests, my concern is with the issue of what are economic models. However, the goal of the paper is not to offer an in-depth study on multiple approaches to modelling in economics, but rather to overcome the dichotomical divide between conceptualizing models as isolations and constructions. This is done by introducing the idea of economic models as believable worlds, precisely descriptions of mechanisms that refer to the essentials of the (...) modelled targets. In doing so I make use of the Woodward’s (2002) conceptualization of mechanisms. It is shown that such models do not offer the perfectly true descriptions of the actual world but justified beliefs about the modelled, precisely they aim at maximizing truth and minimizing falsity in a large body of belief about the real world. The analysis throughout the paper is supported by in-depth examination of the Varian’s (1980) model of sales that is here treated as a representative way of reasoning in neoclassical economics. (shrink)

Pope Francis argues for a shift to a new economic model that is in the service of the human life and is "more attentive to ethical principles" (LS 189). He does not endorse a specific model except that he provides conditions, principles, and frameworks by which its ethos must be grounded against. As part of his pastoral approach and his vision of a synodal Church, he invites everyone to participate and contribute to this discussion because "not all discussions of (...) doctrinal, moral or pastoral issues need to be settled by interventions of the magisterium" (AL 3). It is within this papal invitation of discoursing this new economic model where this paper aims to contribute particularly on the centrality of the anthropological criterion. The first section explores the meaning of his articulation on economics; situating it within the economic discourse of Pope John Paul II and Pope Benedict XVI. The second section focuses on the anthropological criterion as problematized by the identification of the homo economicus as self-interested. The third section draws a theoretical framework from substantivist economics in forwarding the desired economic ethos while the fourth section provides praxeological inputs and argues that homo economicus can be prosocial when the culture that is embedded in a particular economic model is put together to nurture such ethos. (shrink)

One striking feature of the contemporary modelling practice is its interdisciplinary nature. The same equation forms, and mathematical and computational methods, are used across different disciplines, as well as within the same discipline. Are there, then, differences between intra- and interdisciplinary transfer, and can the comparison between the two provide more insight on the challenges of interdisciplinary theoretical work? We will study the development and various uses of the Ising model within physics, contrasting them to its applications to socio-economic (...) systems. While the renormalization group methods justify the transfer of the Ising model within physics – by ascribing them to the same universality class – its application to socio-economic phenomena has no such theoretical grounding. As a result, the insights gained by modelling socio-economic phenomena by the Ising model may remain limited. (shrink)

In Economics Rules, Dani Rodrik (2015) argues that what makes economics powerful despite the limitations of each and every model is its diversity of models. Rodrik suggests that the diversity of models in economics improves its explanatory capacities, but he does not fully explain how. I offer a clearer picture of how models relate to explanations of particular economic facts or events, and suggest that the diversity of models is a means to better economic (...) explanations. (shrink)

Economists use various models to explain why it is that firms are capable of pricing above marginal cost. In this paper, we will examine two of them: the Cournot and Bertrand duopoly models. Economists generally accept both models as good explanations of the phenomenon, but the two models contradict each other in various important ways. The puzzle is that two inconsistent explanations are both regarded as good explanations for the same phenomenon. This becomes especially worrisome when (...) the two models are offering divergent policy recommendations. This report presents that puzzle by laying out how the two models contradict each other in a myriad of ways and then offers five possible solutions to that puzzle from various economists, philosophers of science, and philosophers of economics. (shrink)

The concept of sustainable development considers environmental, social and economic issues in general. And the goals of resource conservation and socio-economic development do not contradict each other, but contribute to mutual reinforcement. The purpose of this study is to build and test an economic and mathematical model for the formation of strategies for the behavior of an economic entity with an increase in the impact of negative environmental factors. The proposed strategies and their models are (...) based on the income-expenditure balance equation, which takes into account both quantitative and qualitative characteristics. The constructed models are considered in the state space. The research methodology is based on building models in the form of linear combinations of functions of a homogeneous external impact and various spatial combinations of economic sources (sinks). The study makes it possible to assess the dependence of the amount of resources used for life support on the chosen adaptive strategy. Within the framework of the proposed model, it was found that the criterion for the effectiveness of the applied strategy can be an indicator of satisfaction with the state, the preservation of which, simultaneously with the preservation of the size of resources used, corresponds to the direction of optimization. This approach is consistent with the concept of sustainable development. (shrink)

Now that complex Agent-Based Models and computer simulations spread over economics and social sciences - as in most sciences of complex systems -, epistemological puzzles (re)emerge. We introduce new epistemological tools so as to show to what precise extent each author is right when he focuses on some empirical, instrumental or conceptual significance of his model or simulation. By distinguishing between models and simulations, between types of models, between types of computer simulations and between types of empiricity, (...) section 2 gives conceptual tools to explain the rationale of the diverse epistemological positions presented in section 1. Finally, we claim that a careful attention to the real multiplicity of denotational powers of symbols at stake and then to the implicit routes of references operated by models and computer simulations is necessary to determine, in each case, the proper epistemic status and credibility of a given model and/or simulation. (shrink)

In a recent special issue dedicated to Dani Rodrik’s (2015) influential monograph Economics Rules, Grüne-Yanoff and Marchionni (2018) raise a potentially damning problem for Rodrik’s suggestion that progress in economics should be understood and measured laterally, by a continuous expansion of new models. They argue that this could lead to an “embarrassment of riches”, i.e. the rapid expansion of our model library to such an extent that we become unable to choose between the available models, and thus needs (...) to be solved to make ‘model pluralism’ viable. Drawing on Veit’s (2019a) ‘model pluralism’ account, this paper argues that model pluralism as a thesis about the relationship between science and nature undermines the very idea of a general model selection framework for policy making. (shrink)

Economic models describe individuals in terms of underlying characteristics, such as taste for some good, sympathy level for another player, time discount rate, risk attitude, and so on. In real life, such characteristics change through experiences: taste for Mozart changes through listening to it, sympathy for another player through observing his moves, and so on. Models typically ignore change, not just for simplicity but also because it is unclear how to incorporate change. I introduce a general axiomatic (...) framework for defining, analysing and comparing rival models of change. I show that seemingly basic postulates on modelling change together have strong implications, like irrelevance of the order in which someone has his experiences and ‘linearity’ of change. This is a step towards placing the modelling of change on solid axiomatic grounds and enabling non-arbitrary incorporation of change into economic models. (shrink)

Psychological well-being is a major global concern receiving more scholarly attention following the 2008 Great Recession, and it becomes even more relevant in the context of COVID-19 outbreak. In this study, we investigated the impact of economic uncertainty resulting from natural disasters, epidemics, and financial crisis on individuals' mental health. As unemployment rate exponentially increases, individuals are faced with health and economic concerns. Not all society members are affected to the same extent, and marginalized groups, such as those (...) suffering from chronic mental illnesses or low-income families cannot afford the downsizing, mass lay-offs and lack of access to public health services. Psychiatric profession is familiarized with the phenomenon of intolerance of uncertainty (IU), and we examine how this concept is associated with job uncertainty and social identity disturbance. Several studies have formally investigated the effects of IU, but to our knowledge, this is the first research integrating the psychological well-being, job uncertainty and identity disturbance caused by economic breakdown. Literature points to many reported cases of PTSD, anxiety, depression and suicidal tendencies following major social disasters. Yet, we have undertaken to analyze the subjective experiences underlying the self-harming behaviors in an attempt to fill the methodological gap by drawing insights from prominent psychological, sociological and economic theories. We find economic uncertainty to have a positive relation to job uncertainty and identity disturbance, and a negative relationship with psychological well-being. Psychological well-being depends on coherency between both abstract subjective and concrete objective identity, and when these perceptions are inconsistent, cognitive dissonance arises resulting in identity disturbance. We argue that stability is not associated with monetary advantage only, but also with a wide range of other benefits that are crucial for individuals' growth, satisfaction and sense of identity. Therefore, we propose the implementation of social support and public welfare policies to mitigate health risks during the turbulent socio-economic changes. (shrink)

Models not only represent but may also influence their targets in important ways. While models’ abilities to influence outcomes has been studied in the context of economic models, often under the label ‘performativity’, we argue that this phenomenon also pertains to epidemiological models, such as those used for forecasting the trajectory of the Covid-19 pandemic. After identifying three ways in which a model by the Covid-19 Response Team at Imperial College London may have influenced scientific (...) advice, policy, and individual responses, we consider the implications of epidemiological models’ performative capacities. We argue, first, that performativity may impair models’ ability to successfully predict the course of an epidemic; but second, that it may provide an additional sense in which these models can be successful, namely by changing the course of an epidemic. (shrink)

The effective functioning of a modern enterprise necessitates the awareness of the owners and managers of its strategic orientations, the state of the internal and external environment, its competitive advantages, entrepreneurial potential and development prospects. A well-built business model of the enterprise helps to face these urgent and permanent challenges. However, the formation of a real business model of the enterprise necessitates mastering of theoretical and methodological bases and implementation of long-term practical measures in the field of assessment, shaping, organization (...) and control. This study offers a comprehensive business model of the enterprise that systematically identifies key factors which influence business activity of the enterprise and provide value logic for doing business in the global economic environment. (shrink)

This book is unique because it is the first single-author monograph which applies Bourdieu’s theory to management studies. It takes a theory-driven approach to develop models to describe service innovation. This will give the reader a full understanding of the variety of different theoretical concepts that Bourdieu created and used and how they can be applied to the study of management and innovation. Moreover, it is also the only book that links Bourdieu’s theory to his methodological approach, providing the (...) reader with a toolkit of methods to perform business ethnographies according to Bourdieu’s approach. The book acts as a primer for anyone wanting to learn how to model an organisational system from a Bourdieusian perspective. It contains all the information someone might need to begin to go out in the field and collect data. Consequently, the people that might want to read this publication include post-graduate students looking to learn business anthropology, as well as post-doctoral and other early career researchers. (shrink)

Otto Neurath’s empiricist methodology of economics and his contributions to politi- cal economy have gained increasing attention in recent years. We connect this research with contemporary debates regarding the epistemological status of thought experiments by reconstructing Neurath’s utopias as linchpins of thought experiments. In our three reconstructed examples of different uses of utopias/dystopias in thought experiments we employ a reformulation of Häggqvist’s model for thought experiments and we argue that: (1) Our reformulation of Häggqvist’s model more adequately complies with many (...) uses of thought experiments, especially with the open-ended discussions of utopias and dys- topias in thought experiments. (2) As a strict logical empiricist, Neurath is committed to a strictly empiricist account of thought experiments. John Norton’s empiricist argument view can indeed account for the justifications of empirical beliefs and genuine discoveries targeted by scientific utopianism in three distinct (yet connected) ways, all of which Neur- ath already contemplated: (2.I) Dealing with utopias and thought experiments on a regular basis increases creativity and inventiveness. (2.II) Particular ways of presenting knowl- edge facilitate scientific discovery and social progress. (2.III) The use of utopias in thought experiments can prompt conceptual change and allow access to new phenomena. We con- clude by highlighting that, even though thought experiments support a positive attitude for exploring new social possibilities, Neurath points out that active decisions are unavoidable. The exploration of alternatives and the awareness of a need for decisions in policy discus- sion avert a technocratic outlook in social science. (shrink)

Should we insist on prediction, i.e. on correctly forecasting the future? Or can we rest content with accommodation, i.e. empirical success only with respect to the past? I apply general considerations about this issue to the case of economics. In particular, I examine various ways in which mere accommodation can be sufficient, in order to see whether those ways apply to economics. Two conclusions result. First, an entanglement thesis: the need for prediction is entangled with the methodological role of orthodox (...) economic theory. Second, a conditional predictivism: if we are not committed to orthodox economic theory, then we should demand prediction rather than accommodation – against most current practice. (shrink)

This review essay of Economics Rules situates Dani Rodrik’s contribution with respect to the 2007–2008 global economic crisis. This financial meltdown, which the eurozone did not fully recover from before the Covid-19 pandemic, led to soul- searching among economists as well as a call for heterodox economic approaches. Yet, over the past decade, instead the economics profession has maintained its orthodoxy. Rodrik’s Economics Rules offers a critique of the economics profession that is castigating but mild. It calls for (...) economists to use more and diverse models without becoming wedded to any single model or an overarching vision. Yet Rodrik ratifies many of the benchmark models standard to orthodox economics and provides little ground for a fundamental rethinking of the discipline. This essay analyses the conservatism underlying Rodrik’s approach, which upholds general equilibrium theory and rational expectations underlying the efficient market hypothesis. It argues that the economics discipline’s scope-creep to maintain its applicability to all human decision-making, and its acceptance of all-inclusive utility functions, crowds out moral sentiments and civic virtue. Thus. it argues that rather than urging economists simply to be more cautious in their application of models to address particular social concerns, instead economists must recognise their discipline’s inherent limitations. (shrink)

This research aims at establishing the impact of information and communication technologies (ICT) on e-commerce development of industrial enterprises by means of economic and mathematical modelling. The goal was achieved using the following methods: theoretical generalization, analysis and synthesis (to critically analyse the scientific approaches of scientists regarding the expediency of using mathematical models in the context of enterprises’ e-commerce development), target, comparison and grouping (to reveal innovative methodological approach to assessing ICT impact on e-commerce development of industrial (...) enterprises), tabular, analytical and integral method (for summarizing the analysis results of enterprises readiness to implement ICT, ICT use in the activities of industrial enterprises of Ukraine and the analysis of e-commerce development), mathematical modelling (to build a regression model determining impact of changes in ICT use on the market share occupied by industrial enterprises), generalization (to determine promising directions of e-commerce developing of industrial enterprises). The implementation of a comprehensive approach to understanding the importance of ICT influence on e-commerce development of industrial enterprises will ensure acceleration of the digitalization of business processes, will contribute to the speed increase of enterprises response to customer requests, and increase the market share occupied by enterprises. A new vision of directions for developing e-commerce of industrial enterprises is suggested, which are determined by the need for enterprise rebranding, the development of e-commerce tools and technologies, the importance of outsourcing service automation and promotion of subscription trade. ICT is considered as integration factor that determines prospects for e-commerce development of industrial enterprises and contributes to increasing efficiency of online business management. Research results demonstrate that the use of economic and mathematical modelling is an important tool for assessing ICT impact, and its absence can negatively affect the accuracy and validity of online business management. (shrink)

It can hardly be denied that each field of knowledge has its own subject-matter and aims, scope and limits, specific method and distinctive characteristics. Every science has its own historical background and dynamics which explain its emergence and raison d'etre, as well as influence its development over time, expanding and contracting as it were in response to the prevailing Zeitgeist and alongside societal, legal, and political changes. Consequently, each discipline inevitably reflects the realities, beliefs, needs, tendencies, and interests of the (...) individuals (or groups) who undertake its study and instruction, or try to apply and develop it further. In other words, each field of knowledge is mirroring a certain Weltansicht, or worldview‒that is, a comprehensive framework through which individuals or cultures interpret and understand the world around them. In scientific enterprise, worldviews not only provide a broader context for interpreting data, but also influence their research directions, methodological preferences, and final conclusions. Economics is no exception to this phenomenon. This modest essay aims to open up the epistemological foundations of modern economics to closer scrutiny with a view to pinpointing some tacit assumptions, cultural or other biases, and preconceived notions operating beneath the surface of economic models, theories, and methodologies. (shrink)

The beliefs of economists are not solely determined by empirical evidence in direct relation to the theories and models they hold. Economists hold 'ontological presuppositions', fundamental ideas about the nature of being which direct their thinking about economic behaviour. In this volume, leading philosophers and economists examine these hidden presuppositions, searching for a 'world view' of economics. What properties are attributed to human individuals in economic theories, and which are excluded? Does economic man exist? Do markets (...) have an essence? Do macroeconomic aggregates exist? Is the economy a mechanism, the functioning of which is governed by a limited set of distinct causes? What are the methodological implications of different ontological starting points? This collection, which establishes economic ontology as a coordinated field of study, will be of great value to economists and philosophers of social sciences. (shrink)

In the first part of this two-part work, the economics of higher education are explained. It is made clear how a university’s business model differs from that of a company that has to compete on the open market. On this basis, it is explained: -/- (i)Why universities are in no way threatened by low retention-rates and graduation-rates; (ii)Why universities cannot significantly improve or otherwise alter the quality of their educational services without imperiling their very existences; (iii)Why universities do not have (...) to improve the quality of their educational services; (iv)Why universities couldn’t improve the quality of their services even if they wanted to; (v)Why the fact that many universities have low retention- and graduation-rates does not a represent a business opportunity, or opportunity of any other kind, for anyone, whether inside or outside of academia; and (vi)Why principles of Knowledge Management (KM) that are so useful when it comes to helping businesses that compete on the open market are completely useless, and indeed of negative utility, when it comes to helping universities solve their problems. -/- In the second part of this work, it is explained how to construct an online university that is both lucrative and also provides instruction that is faster, better, cheaper, and more useful than the instruction provided by any existing (or possible) brick-and-mortar university. Finally, it is explained how the principles of KM can be used to optimize such a university, once it is up and running. (shrink)

The article explores novel directions in the phenomenology of economics. It analyzes how the approaches of Till Düppe and Alfred Schütz, both inspired by Edmund Husserl, may shed light on the historical development of economics. I examine the substance and meaning of economics in the context of the forceful criticism of the whole discipline recently raised by Düppe. This examination uncovers important weaknesses and omissions inherent in Düppe’s argument against the economists’ scientific aspirations. The analysis of the social scientific endeavors (...) by Alfred Schütz who develops a phenomenologically informed ‘telescopic’ concept of an ideal type is then shown to be a more fruitful and methodologically rigorous way towards understanding the developments within economics. The Schützian view permits us to see how abstract economic models originate in the experience of the life-world and are continuous with it. Accordingly, the historical development of economic science may be viewed as consisting from two broadly defined phases, where at first the formalism is steadily increasing (the ‘zooming out’ phase) and later the discipline converges back to context-specific empirical examinations (the ‘zooming in’ phase). A case study concentrating on the economic theory of politics illustrates that both the drive towards abstraction that has culminated around 1950s and the more recent ‘zooming in’ is methodologically legitimate from the phenomenological point of view. I conclude that economics has never been completely severed from the paramount reality of the everyday life and for decades the interconnection has been growing stronger by the day. (shrink)

The origins of testing scientific models with statistical techniques go back to 18th century mathematics. However, the modern theory of statistical testing was primarily developed through the work of Sir R.A. Fisher, Jerzy Neyman, and Egon Pearson in the inter-war period. Some of Fisher's papers on testing were published in economics journals (Fisher, 1923, 1935) and exerted a notable influence on the discipline. The development of econometrics and the rise of quantitative economic models in the mid-20th century (...) made statistical significance testing a commonplace, albeit controversial tool within economics. -/- In the debate about significance testing, methodological controversies intertwine with epistemological issues and sociological developments. Our aim in this chapter is to expound these connections and to show how the use of, and the debate about, significance testing in economics differs from other social sciences, such as psychology. (shrink)

The 1994 US spectrum auction is now a paradigmatic case of the successful use of microeconomic theory for policy-making. We use a detailed analysis of it to review standard accounts in philosophy of science of how idealized models are connected to messy reality. We show that in order to understand what made the design of the spectrum auction successful, a new such account is required, and we present it here. Of especial interest is the light this sheds on the (...) issue of progress in economics. In particular, it enables us to get clear on exactly what has been progressing, and on exactly what theory has – and has not – contributed to that. This in turn has important implications for just what it is about economic theory that we should value. (shrink)

The Quantum Economics Intelligence Initiative, spearheaded by Quantum Economist PhDs. Kaiola M Liu integrates insights from seminal thinkers like Einstein, Archimedes, Adam Smith, Nick Land, and Sun Tzu. By applying principles of quantum mechanics, this forward-looking project aims to redefine economic modeling, exploring real-world applications and potential benefits. The initiative encompasses foundational studies, economic model applications, incorporation of quantum computing, and analysis of contemporary economic philosophies. Keywords - Quantum Mechanics, Economics, Technological Advancements, Philosophy.

The city of Kruja (Albania)contains three types of dwellings that date back to different periods of time: the historic ones, the socialist ones, the modern ones. This paper has to deal only with the historic building's typology. The questionnaire that is applied will be considered for the development of mathematical regression based on specific data for this category. Variation between the relevant variables of the questionnaire is fairly or inverse-linked with a certain percentage of influence. The aim of this study (...) is to have better insights into the important role of building occupancy, people's lifestyle, economic level, and the quality of life of the residents in the inner medieval citadel, the physics characteristics, and the energy efficiency of the historical dwellings. The variables such as the number of residents, quality of life, the surface of the dwellings, heating instruments and time spent in the dwelling, current living conditions, monthly bills, level of satisfaction, restoration, and building improvements, interact with each other with probabilities with different positive or negative percentages. (shrink)

What are the reasons for theory change in economics? – The author tries to give a sober answer on the basis of his epistemological model reconstructing the internal aspects of theory change. It is conjectures that a more subtle approach including the external facets can be provided with the “communicative rationality” concept. Key words: economics, theory change, internalism, external factors .

Models treating the simple properties of social groups have a common shortcoming. Typically, they focus on the local properties of group members and the features of the world with which group members interact. I consider economic models of bureaucratic corruption, to show that (a) simple properties of groups are often constituted by the properties of the wider population, and (b) even sophisticated models are commonly inadequate to account for many simple social properties. Adequate models and (...) social policies must treat certain factors that are not local to individual members of the group, even if those factors are not causally connected to those individuals. Key Words: individualism • corruption • supervenience • model • cause. (shrink)

In the context of the digital economy development, the priority component of the economic security of an enterprise is changing from material to digital, constituting an independent element of enterprise security. The relevance of the present research is driven by the need to solve the issue of modernizing the economic security of the enterprise taking into account the new risks and opportunities of digitalization. The purpose of the academic paper lies in identifying the features of preventing internal and (...) external negative influences (threats) in order to guarantee the effective and stable functioning and dynamic social development of the enterprise in the context of digitalization. The research methods are as follows: general scientific research methods, in particular, logical analysis, theoretical substantiation, methods of induction and deduction, formalization and generalization, statistical observation. Results. It has been proposed to introduce the concept of “digital security of the enterprise” for replacing the concept of “information component of economic security” in order to bring the terminology in line with new economic realities. The implementation of the “black box” model has made it possible to identify the latest risks and threats to the economic security of an enterprise within the conditions of the digitalization that differs from the existing ones. The assessment of enterprises’ digital security of the European Union member states has revealed that the digital security level does not depend on the size of the country, however, it is influenced by the institutional environment (in particular, digital development tools in the EU) and the size of enterprises. Also, within the research framework, an assessment of the digital security level of enterprises in the context of digitalization has been proposed. In order to characterize enterprises by the level of digital security, a calculation procedure using the coefficient method has been proposed. (shrink)

This article critically discusses the concept of economic rationality, arguing that it is too narrow and specific to encompass the full concept of practical rationality. Economic rationality is identified here with the use of the optimizing model of decision, as well as of expected utility apparatus to deal with uncertainty. To argue that practical rationality is broader than economic rationality, the article claims that practical rationality includes bounded rationality as a particular case, and that bounded rationality cannot (...) be reduced to economic rationality as defined here. (shrink)

Economic theories of democratic legitimacy have criticized deliberative accounts of democratic legitimacy on the grounds that they do not represent a practical possibility and that they create conditions that make actual democracies worse. It is not simply that they represent the wrong ideal. Rather, they are too idealistic – failing to show proper regard for the cognitive and moral limitations of persons and the depth of disagreement in democratic society. This article aims to show that the minimalist criterion of (...) democratic legitimacy is self-defeating and that even if there are minimal cognitive, moral, and social requirements for the possibility of practicable deliberative democracy, these limitations do not necessarily impose insuperable barriers for democratic deliberation as the normative basis of democratic legitimacy. Thus, the limiting facts do not dictate the structure of appropriate normative models of democracy in the way minimalists have supposed. (shrink)

What are the reasons of theory change in economical science? – The author tries to answer the question utilizing his theory change epistemological model approbated on the natural sciences. Key words: economical theory, theory change, natural science, model.

I distinguish several doctrines that economic methodologists have found attractive, all of which have a positivist flavour. One of these is the doctrine that preference assignments in economics are just shorthand descriptions of agents' choice behaviour. Although most of these doctrines are problematic, the latter doctrine about preference assignments is a respectable one, I argue. It doesn't entail any of the problematic doctrines, and indeed it is warranted independently of them.

Economies are complicated systems encompassing micro behaviors, interaction patterns, and global regularities. Whether partial or general in scope, studies of economic systems must consider how to handle difficult real-world aspects such as asymmetric information, imperfect competition, strategic interaction, collective learning, and the possibility of multiple equilibria. Recent advances in analytical and computational tools are permitting new approaches to the quantitative study of these aspects. One such approach is Agent-based Computational Economics (ACE), the computational study of economic processes modeled (...) as dynamic systems of interacting agents. This chapter explores the potential advantages and disadvantages of ACE for the study of economic systems. General points are concretely illustrated using an ACE model of a two-sector decentralized market economy. Six issues are highlighted: Constructive understanding of production, pricing, and trade processes; the essential primacy of survival; strategic rivalry and market power; behavioral uncertainty and learning; the role of conventions and organizations; and the complex interactions among structural attributes, institutional arrangements, and behavioral dispositions. (shrink)

In this chapter, one considers finance at its very foundations, namely, at the place where assumptions are being made about the ways to measure the two key ingredients of finance: risk and return. It is well known that returns for a large class of assets display a number of stylized facts that cannot be squared with the traditional views of 1960s financial economics (normality and continuity assumptions, i.e. Brownian representation of market dynamics). Despite the empirical counterevidence, normality and continuity assumptions (...) were part and parcel of financial theory and practice, embedded in all financial practices and beliefs. Our aim is to build on this puzzle for extracting some clues revealing the use of one research strategy in academic community, model tinkering defined as a particular research habit. We choose to focus on one specific moment of the scientific controversies in academic finance: the ‘leptokurtic crisis’ opened by Mandelbrot in 1962. The profoundness of the crisis came from the angle of the Mandelbrot’s attack: not only he emphasized an empirical inadequacy of the Brownian representation, but also he argued for an inadequate grounding of this representation. We give some insights in this crisis and display the model tinkering strategies of the financial academic community in the 1970s and the 1980s. (shrink)

The problem of building an effective system of interconnected and purposeful innovative changes in business management is solved in the article. The main purpose of the research is to improve the model of business excellence on the basis of interconnected and purposeful innovative changes in business management. Critical analysis of literature sources and approaches to solving the problem of building a perfect model of business emphasizes the diversity of applied methodological approaches and methods of management innovation. However, in terms of (...) business technologicalization, necessity to accelerate information exchange, development of innovation and, at the same time, development of new threats, the need on the basis of strategizing, intellectualization of management, partnership, compliance with the challenges of the external environment, communication efficiency, leadership transformation, balancing intermediate and final results, there is a need to transform business and management on the basis of strategizing, intellectualization of management, partnership interaction, compliance with the challenges of the external environment, communication efficiency, transformation of leadership, balancing intermediate and final results. Relevance of solving of this scientific issue is that the timely use of innovative tools and management methods in the implementation of strategic intentions and goals forms a high adaptability of companies to transformation processes occurring in their external and internal environment under the influence of digital technologies in business processes. The scientific-theoretical and methodological basis of the study were the following methods: abstract-logical and comparative analysis – to generalize theoretical approaches and confirm the practical importance of solving the problem of building a model of providing business excellence on the basis of interconnected and focused innovative changes in business management; system analysis and modelling – method of building a model of business excellence based on managerial innovation; system-analytical – method of balancing the interaction of the components providing business excellence; generalization – when drawing conclusions based on research results. The object of research is a system of interconnected and purposeful innovative changes in business management. The results of solving the problem of building a model of business excellence while balancing the interaction of the components of such provision and implementation of the process of digital transformation of the business model. The results of the research have practical value for business entities that seek to increase the effectiveness of interconnected and purposeful innovative changes in business management. (shrink)

From Hegel's philosophy of nature, this essay develops a critique of economic models and market society, based on Hegel's notion of what it takes for a formally described system to be embodied and real.

In recent years, there has been an increasing interest in the development of well-founded conceptual models for Service Management, Accounting Information Systems and Financial Reporting. Economic ex- changes are a central notion in these areas and they occupy a prominent position in frameworks such as the Resource-Event Action (REA) ISO Standard, service core ontologies (e.g., UFO-S) as well as financial stan- dards (e.g. OMG’s Financial Industry Business Ontology - FIBO). We present a core ontology for economic exchanges (...) inspired by a recent view on this phenomenon. According to this view, economic exchanges are based on an agreement on the actions that the agents are committed to perform. This view enables a unified treatment of economic exchanges, regardless the object of the transaction. We ground our core ontology on the Unified Foundational Ontology (UFO), discussing its formal and conceptual aspects, instantiating it as a reusable OntoUML model, and confronting it with the REA standard and the UFO-S service ontology. (shrink)

According to standard rational choice theory, as commonly used in political science and economics, an agent's fundamental preferences are exogenously fixed, and any preference change over decision options is due to Bayesian information learning. Although elegant and parsimonious, such a model fails to account for preference change driven by experiences or psychological changes distinct from information learning. We develop a model of non-informational preference change. Alternatives are modelled as points in some multidimensional space, only some of whose dimensions play a (...) role in shaping the agentís preferences. Any change in these "motivationally salient" dimensions can change the agent's preferences. How it does so is described by a new representation theorem. Our model not only captures a wide range of frequently observed phenomena, but also generalizes some standard representations of preferences in political science and economics. (shrink)

In recent years, there has been an increasing interest in thedevelopment of ontologically well-founded conceptual models for Information Systems in areas such as Service Management, Accounting Information Systems and Financial Reporting. Economic exchanges are central phenomena in these areas. For this reason, they occupy a prominent position in modelling frameworks such as the REA (Resource-EventAction) ISO Standard as well as the FIBO (Financial Industry BusinessOntology). In this paper, we begin a well-founded ontological analysisof economic exchanges inspired by (...) a recent ontological view on the nature of economic transactions. According to this view, what counts asan economic transaction is based on an agreement on the actions thatthe agents are committed to perform. The agreement is in turn based on convergent preferences about the course of action to bring about. This view enables a unified treatment of economic exchanges, regardless the object of the transaction, and complies with the view that all economictransactions are about services. In this paper, we start developing our analysis in the framework of the Unified Foundational Ontology (UFO). (shrink)

Scientists and engineers seek to understand how real-world systems work and could work better. Any modeling method devised for such purposes must simplify reality. Ideally, however, the modeling method should be flexible as well as logically rigorous; it should permit model simplifications to be appropriately tailored for the specific purpose at hand. Flexibility and logical rigor have been the two key goals motivating the development of Agent-based Computational Economics (ACE), a completely agent-based modeling method characterized by seven specific modeling principles. (...) This perspective provides an overview of ACE, a brief history of its development, and its role within a broader spectrum of experiment-based modeling methods. (shrink)

This study aims to explore a demoethical model for sustainable development in modern society. It proposes an approach that focuses on organizing activities to improve sustainable development. Specifically, it presents a demoethical model relevant to Society 5.0 and Industry 5.0 organizations. The objective is to identify demoethical values that can drive sustainable development in the era of digitalization. Through a literature review and analysis, this study identifies key components of the demoethical model and provides practical recommendations for stakeholders involved in (...) digital transformation. The analysis of demoethical norms and phenomena, such as education, nurturing, mind, knowledge, science, and honest work, has enabled the identification of values that align with sustainable development in society. The results of the study demonstrate that the notion of a demoethical foundation for sustainability is rooted in the concept of spirituality as the basis for a new societal development scenario and its relationship with nature. The study shows that ideas about the demoethical basis of sustainability are based on the priority of spirituality as the basis of a new scenario for the development of society, as well as the integration of demographic, socio-economical, and ecological components in system-wide modeling. (shrink)

There are alternative models, which are based on the evaluation of certain properties, based on physiology or evolutionary psychology. Classical philosophers have addressed emotions as responses to certain types of events that are related to a subject, causing bodily and behavioral changes. In the last century emotions were neglected, being considered a disturbing factor. Lately, emotions have returned to the attention of philosophers and psychologists, corroborating them with other disciplines such as psychology, neurology, evolutionary biology and even economics. DOI: (...) 10.13140/RG.2.2.28869.06881 . (shrink)

Although policymakers and investigators still struggle to quantify and compare the effects of various Covid-related interventions, we are steadily amassing data that could help inform choices. The pandemic’s medical, social, and economic harms have been immense, and they warrant a continuous policy response. All decision makers use some type of mental model to weigh the pros and cons of various policy options. Rigorous economic evaluation formalizes this process. Value judgments will still be required, but economic evaluation can (...) make the decision-making process more systematic, comprehensive, and transparent. (shrink)

The article considers the problem of ensuring the economic security of trade enterprises by forming an optimal pricing policy. The methodology of formation the minimum and maximum selling prices of trade enterprise, maintenance of margin of economic security, which is based on research of turnover costs and working capital of trade enterprise is offered. Based on statistical data of trade enterprises, the types of prices by product range are determined, which form a stable economic situation and ensure (...) economic security of trade enterprise. The necessity of forming the optimal price policy and selling prices of trade enterprises with the use of Pareto efficiency tools and construction of single-criteria and multi-criteria tasks, indicators of quality of commodity resources of trade enterprises is substantiated. Using the Excel software processor and the «Regression» function, economic-mathematical models of optimal prices for the product range of trade enterprises are built. The results testified to the effectiveness of the proposed model of the optimal pricing policy of trade enterprises, as the obtained values are within the minimum selling prices, which provides economic security of trade enterprises. The process of forming the pricing policy of trade enterprises to ensure economic security is proposed, which is based on the principles of pricing, appropriate methodological tools and monitoring of market environment factors. Organizational, economic, legal, social and market (marketing) mechanisms for the formation of effective pricing policy of trade enterprises aimed at ensuring economic security are identified. This study is practically interesting for personnel of trade enterprises, regardless of organizationallegal forms of ownership and activities, and theoretically – for researchers dealing with pricing. (shrink)

The hotel sector of the travel industry is the leader according to the indicator of economic growth, which is observed in both developed and developing countries. Even under the economic instability and global natural disasters, the industry has seen growth in recent years. The franchising model for expanding activities is central to all successful hotel chains. The article deals with the franchising model for the travel business expansion and the economic performance of hotel chains such as Marriott (...) International, Wyndham Hotels, and Hilton. They hold a prominent place in the global hotel business, have a steady tendency to expand their business, hold high positions in the ranking of the best franchises in the world and have been recognized by experts. The main risks for the franchisor and franchisee are determined when making a decision on the expansion of the international travel business, which must be taken into account when developing new markets for hotel chains. The main advantages of the franchising model of expansion, which promote understanding between the parties of the franchise agreement, dynamicize hotel chains expansion and allow for reducing their expenses and increasing incomes. It was found that the growth of net profit and total income in the indicated hotel chains was due to the increase in the number of rooms in franchising and the positive dynamics of franchise income. A more dynamic pace occurred after the crisis growth in revenues from the franchisee compared with the managerial model. A closer relationship between revenues and key financial indicators has been proved when using a franchising model. (shrink)

Economics uses rational actor models, but what about anthropology? I present an interpretation of the influential anthropologist Marilyn Strathern according to which she engages in a kind of rational actor modelling, but a kind that is different from economic modelling.