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)

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)

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)

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)

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.

Behaviourism is the view that preferences, beliefs, and other mental states in social-scientific theories are nothing but constructs re-describing people's behaviour. Mentalism is the view that they capture real phenomena, on a par with the unobservables in science, such as electrons and electromagnetic fields. While behaviourism has gone out of fashion in psychology, it remains influential in economics, especially in ‘revealed preference’ theory. We defend mentalism in economics, construed as a positive science, and show that it fits best (...) scientific practice. We distinguish mentalism from, and reject, the radical neuroeconomic view that behaviour should be explained in terms of brain processes, as distinct from mental states. (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.

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)

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 .

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)

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)

Pros and contras of Lakatosian epistemological theory-change model in respect to economics are considered. It is argued that one of the main shortcomings of the model is connected in its inability to treat the social factors.

Templates travel because they offer a tractable format that can be used for model-building in a variety of domains. It is often because of this quality that a particular template is chosen. But one cannot assume that there are always templates ready to model a new phenomenon, and moreover, templates have also been designed at some point. A critical aspect of this designing process is the choice of the mathematical objects with which one hopes to capture this phenomenon. This means (...) that one has to assess which of the properties of different kinds of mathematical objects and which combinations of them are most appropriate. The selection of these objects is based on whether their properties enable the model to perform its function. This selection of mathematical objects is similar to the selection of materials in mechanical design. (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)

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)

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.

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)

There is traditionally a division of labor between economics and economic history, the task of economic history being that of studying the evolving constraints of economic mechanisms. Recent theorizing on endogenous structural change challenges this view: if structural change is endogenous to economic mechanisms, any strict division of labor between causal analysis and structural analysis breaks down. Rather such views call for an integration of causal and structural analysis. This paper looks for such a methodology, noting especially the contributions (...) made by two Swedish economists, Johan Åkerman (1896-1982) and Erik Dahmén (1916-2005). With evolutionary, Marxian, Hayekian and critical realist contributions, the paper examines notions of endogenous structural change with the aim of expounding how the notion can be thought in terms of underlying mechanisms to aid such structural analysis. The findings of endogenous mechanisms underlying structural change are crystallized into a mathematical model and a simple methodological framework. (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)

One striking observation in the history of rational choice models is that those models have not only been used in economics but spread widely across the social and behavioral sciences. How do such model transfers proceed? By closely studying the early efforts to transfer such models by William Riker – a major protagonist in pushing the adoption of game theoretic models in political science – this article examines the transfer process as one of ‘translation’ by (...) which abstract and mathematical rational choice models were constructed and modified such that they applied to a specific target system in a new domain. In this paper, we argue that to overcome a set of challenges that hampered the straightforward transfer of game theoretic models into political science, Riker complemented theoretical and conceptual modifications of von Neumann and Morgenstern’s game schemes with the use of narratives to turn them into applicable and testable models. As such, those narratives played a crucial role in enabling their transfer and ultimately facilitated the applicability of game theoretic models in political science. (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)

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)

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)

Serious games are an effective method of reproducing aspects of the complex interplay between environments and stakeholders in business situations. In the game we describe here, The Sustainable Port, players experience what it is like to make decisions in such a complex environment. Their aim in the game is to grow the Port of Rotterdam while keeping economic growth in balance with sustainability goals. In this study, we assessed whether experienced Port of Rotterdam employees (PoR employees) show different psychophysiological patterns, (...) and more specifically EAR-derived features, compared to students. We did this on the assumption that physiological patterns will tell us something about how people who are familiar with the environment of the Port of Rotterdam, more specifically Port of Rotterdam employees, make decisions compared to those lacking such familiarity.Our sample consisted of 28 PoR employees and 65 students, all of whom played The Sustainable Port game and had their faces recorded with a camera. The Eye Aspect Ratio was extracted from these recordings and then from those we extracted EAR-derived features. Our results show that Port of Rotterdam employees perform better than students and that the two groups are characterized by different physiological variations in their EAR-derived features. A logistic regression model used to identify PoR employees and students obtained an F1 score of 0.62, a PR AUC score of 0.64, and a ROC AUC score of 0.70. performing significantly above baseline suggesting the effectiveness of using EAR-derived features for this task. Our interpretation was further confirmed by a pseudo-R2 score used to evaluate the goodness of fit of a logistic regression model on the entire dataset. We found that Port of Rotterdam employees had a lower variation in blink rate per minute (blinks/m) and higher variation in the root mean square difference of successive difference in blinks (RMSSD), the consecutive difference between two continuous blinks. Moreover, this study shows that our methods were robust enough to negate the effects of confounders, such as biological sex and age that affect some other studies that analyze blinks. (shrink)

There is a striking contrast between the significance of Harold Hotelling’s contribution to industrial economics and the fact that his location model was invalid, unrealistic and non-robust. It is difficult to make sense of the explanatory value of Hotelling’s model based on philosophical accounts that emphasize logical validity, representational adequacy, and robustness as determinants of explanatory value. However, these accounts are misleading because they overlook the context within which the explanatory value added of a model is apprehensible. We present (...) Hotelling’s model in its historical context and show why it is an important and explanatory model despite its apparent deficiencies. (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)

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)

In economics, thought experiments are frequently justified by the difficulty of conducting controlled experiments. They serve several functions, such as establishing causal facts, isolating tendencies, and allowing inferences from models to reality. In this paper, I argue that thought experiments served a further function in economics: facilitating the quantitative definition and measurement of the theoretical concept of utility, thereby bridging the gap between theory and statistical data. I support my argument by a case study, the “hypothetical experiments” (...) of the Norwegian economist Ragnar Frisch (1895-1973). Frisch aimed to eliminate introspection and a subjective concept of utility from economic reasoning. At the same time, he sought behavioral foundations for economic theory that enabled quantitative reasoning. By using thought experiments to justify his set of choice axioms and facilitating the operationalization of utility, Frisch circumvented the problem of observing utility via actual experiments without eliminating the concept of utility from economic theory altogether. As such, these experiments helped Frisch to empirically support the theory’s most important results, such as the laws of demand and supply, without the input of new empirical findings. I suggest that Frisch’s experiments fulfill the main characteristics of thought experiments. (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)

Modern global economic challenges caused by the COVID-19 pandemic and various changes in the structure of the world market of goods and services require the developing of new models of economic systems management based on appropriate strategic management methodology, implementation innovation, use of prospects for various risks caused by the pandemic, implementation mechanisms for ensuring the security of economic systems. Ensuring effective management of economic systems in the current global challenges is impossible without the introduction of a new concept (...) of functioning and sustainable development of economic entities. To ensure effective management of economic systems in the context of modern global challenges it is necessary to determine the state of the economic process of entities and explore the impact of risks on current activities, justify and developing a system to overcome negative effects on economic activity and obtain a positive economic result. The effectiveness of developed conceptual provisions to ensure effective management of economic systems is determined by the ability of the management system to withstand the destructive effects of the external environment and due to the strengths to direct the resources of economic entities to maintain the economic process, able ensure to save resources and cover current costs economic entities, etc. (shrink)

In the wake of the global financial crisis of 2008, the greatest economic disaster since the Great Depression, the cover story of the July 18th 2009 issue of The Economist, entitled “What went wrong with economics,” opened with an unequivocally incriminating statement: “Of all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself.” In the months surrounding this indictment, many influential economists, including several Nobel laureates, were drawn to the (...) same embarrassing conclusion. Despite the existence of a handful of Cassandras, economists, as a group, had failed to foresee the crash. This short essay reviews the criticisms addressed to modern economic theory in the immediate aftermath of the crash. Overall, the main issues raised by critics were that (a) economists versed in the dominant models in macroeconomics and finance have been blinded to the possibility that we live in an uncertain and complex world; and (b) that the content of current economics education has sidelined many of the relevant insights to be found in the history of the discipline. This has led the critics to call for changes in the institutional structure of discipline, with a particular emphasis on the promotion of interdisciplinarity, and theoretical and methodological pluralism. (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)

The thesis examines political and economic transitions in Sub-Saharan Africa (SSA) and particularly in post-communist Ethiopia and Angola between 1989-2019 by applying the interpretative scheme of transition theory. The research question investigated how the economic liberalization of centrally planned political systems affects their political liberalization and vice versa. The main hypothesis attempted to answer whether transition theory can apply as an interpretative model in order to explain post-communist developments in the SSA context. Characteristic noteworthy country examples, which have experienced communism (...) for an extended period and are now under a hybrid developmental state form - with their impressive economic development being driven mainly by the state - are Ethiopia and Angola. Ethiopia and Angola belonged among the fastest-growing economies in the world among China, India and East Asian countries with astonishing high growth rates for extended periods. In turn, their political transition presented signs of liberalization. Yet, they seem to follow the stagnated path of developmental states and hybrid regimes. Ιn order to examine the political and socio-economic parameters of these transformations, the methodology uses also a combination of qualitative and quantitative research data through a twofold comparative approach. From the political perspective two similar political systems are compared. From the economic perspective, we compare a non-resource-rich economy such as Ethiopia with a resource-rich economy such as Angola. The degree of influence of socio-economic interventions by major external actors such as China, US and the EU to democratic consolidation, and vice versa, is examined as well as the repercussions of radical and gradual reforms. The findings of the study suggest that rapid economic transitions along with gradual political reforms in Ethiopia, Angola - and broadly in SSA - inevitably cause delays in socio-economic developments such as employment, inclusiveness and poverty alleviation. Structural external transition drivers in SSA such as debt, structural adjustment programs, subsidies, humanitarian aid and trade deficits seem to hamper its economic transitions than to facilitate its progress and non-dependency. These drivers lead to a vicious circle in most of the empirical examples of SSA. The strong hybrid developmental states of Ethiopia and Angola – despite their democratic progress - present more similarities to the developmental states of China or rest East Asia than to the Central Eastern European countries. In a certain degree, there are similarities also with cases of the Commonwealth of Independent States (CIS), which are still under Russia’s significant influence. The most context-specific parameters though, which concern Sub-Saharan Africa and diversify the states of Ethiopia and Angola from the existing interpretative scheme of transition theory are their high ethnic diversity and economic dependence from their external partners as well as their sui generis leadership. These parameters pose significant constraints to the diverse ethnic groups in their struggle for power and for their access to the natural resources. (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 authors of the book have come to the conclusion that it is necessary to effectively use modern management mechanisms and development strategies of economic entities in order to increase the efficiency of their activities. Basic research focuses on diagnostics threat of bankruptcy, assessment of bioenergy potential, intellectual property, efficiency of corporate governance, use of information support, ensuring competitiveness of banking institutions, functioning of the tax system and its decentralization, assessment of the investment climate and investment risks, functioning of a (...) small business. The research results have been implemented in the different models of cluster structures, mechanisms for monitoring the quality of health care, predicting the convergence of economic development, innovative development models, and development strategies of economic entities in various sectors of the economy in the context of euro integration. The results of the study can be used in decisionmaking at the level of international business, ministries and departments that regulate the processes development of economic systems, ensuring stability and efficiency. The results can also be used by students and young scientists in modern concepts of the development of economic entities in the context of institutional transformations of the global environment. (shrink)

The terms “collaborative economy” or “sharing economy” have been commonly used in recent years to refer to a proliferation of initiatives, business models and forms of work. To observe this significant phenomenon is necessary to take into consideration a new perspective on social, economic, environmental, and political processes that can be created from a number of assets and skills, in innovative ways and at an unprecedented scale. Using of digital technologies for collaboration, communication, coordination, and value creation purposes is (...) included under the same umbrella of the collaborative economy. Market-focused digital innovation is able to disrupt existing business models and support economic activity. The situation in the area of the collaborative economy in Slovakia seems to be different from that of the Western European countries. Data from the area of sharing economy are not registered with the Statistical Office of the Slovak Republic, and there is no analysis examining its impact. We introduce a short summary of case studies examining the collaborative economy platforms in Slovakia and some issues of taxation of the collaborative economy. (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)

The debates on the scientificity of social sciences in general, and sociology in particular, are recurring. From the original methodenstreitat the end the 19th Century to the contemporary controversy on the legitimacy of “regional epistemologies”, a same set of interrogations reappears. Are social sciences really scientific? And if so, are they sciences like other sciences? How should we conceive “research programs” Lakatos (1978) or “research traditions” for Laudan (1977) able to produce advancement of knowledge in the field of social and (...) human phenomena? Is the progress of knowledge in social sciences similar to the one generally observed in natural sciences? Is it possible to evaluate the relative merits of each one of these research programs? -/- These debates are important vectors of social and intellectual polarization. The historical divide between the positivist and the hermeneutics poles precedes the structure of the contemporary debate around the epistemic space of social sciences, It is not only a question of renewing the opposition between a monist view of sciences (e.g. McIntyre, 1996) and a dualistic one (e.g. Geertz, 1973) or even a trialist view of sciences (e.g. Lepenies, 1985). It is also a question of asserting dichotomies transformed into framework (including when it is a question of exceeding them): nature-culture, nomothetic-idiographic, models-narrative, structure-history, cause-reason, explanation-comprehension. -/- In this short introduction, we provide, in section 2, a first overview of this epistemological debate in social science. Section 3 proposes a different standpoint on the same questions, by introducing both ontological and methodological aspects in this basic epistemological debate. Namely, following (Hollis, 1994) oppositions of the explanation - understanding, causes - meaning, etc., types discussed in the firsts ection are comparatively examined together with oppositions of the structure - action, holism - individualism types. This allows us to discus show multi-agent design, by integrating various dimensions and standpoints in the same framework (Phan, Amblard, 2007, Chapters 1, 5, 14) can help us to shift these boundaries, and to bypass these oppositions. As model building and ontology design are at the core of this process (Phan, Amblard, 2007, Chapter 12), Section4 discusses various issues of the art of modelling, starting both from economists’ and sociologists’ current standpoints. (shrink)

This paper attempts to assess the economic significance and implications of collateralization in different financial markets, which is essentially a matter of theoretical justification and empirical verification. We present a comprehensive theoretical framework that allows for collateralization adhering to bankruptcy laws. As such, the model can back out differences in asset prices due to collateralized counterparty risk. This framework is very useful for pricing outstanding defaultable financial contracts. By using a unique data set, we are able to achieve a clean (...) decomposition of prices into their credit risk factors. We find empirical evidence that counterparty risk is not overly important in credit-related spreads. Only the joint effects of collateralization and credit risk can sufficiently explain unsecured credit costs. This finding suggests that failure to properly account for collateralization may result in significant mispricing of financial contracts. We also analyze the difference between cleared and OTC markets. (shrink)

This paper addresses the field of economic measurements of the value of assets, carried out by the methods of independent expert evaluation. The mathematical principles of application, within a comparative methodical approach, of additive and multiplicative models for correcting the cost of single indicator of compared objects have been considered. The differences of mathematical basis of the compared models were analyzed. It has been shown that the ambiguity in the methodology of correction procedure requires studying the advantages and (...) disadvantages of known models, as well as the justification and elaboration of recommendations for their application. Possible forms of correction representation using several alternative units of measurement have been defined; formulas for their interconnection have been built. Analytic expressions have been derived that mathematically describe the algorithms for performing the evaluation correction procedure using various forms of correction representation. The influence of the correction execution model on the characteristics of uncertainty in the independent evaluation result has been analyzed. The scope of two possible types of correction introduction models has been determined. A specific numerical example was used to demonstrate the methodological advantages of using a multiplicative model when summarizing percentage corrections. The independence of the correction result on the sequence of correction introduction has been confirmed. It is proposed to use the selected measure of partial corrections as a criterion for the adequacy of the correction introduction model. It is proved that the result of the independent expert evaluation depends on the chosen model and does not depend on the sequence of correction introduction. The reported study results are important in terms of theory and practice since they make it possible to improve the accuracy and reliability of the result of independent expert evaluation. (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)

Biomass is one of the main sources of energy in Kenya accounting for over 68% of the total primary energy consumption. The continued dependency on biomass energy has resulted to land degradation, deforestation, drought and famine. The adoption and continued use of biogas energy technologies within the developed and developing countries is of great social, economic and environmental benefit. Although the positive benefits of using biogas is clear, in Africa and Kenya the households’ biogas adoption level is low. The main (...) purpose of this study was to analyze social, economic factors that influence adoption of biogas energy among farm households in Nandi, Uasin-Gishu and Trans-Nzoia counties in North Rift region of Kenya. The target population was all the farm households in the three counties. The study employed farm household multistage research design mainly cluster, and simple random sampling techniques to get a sample size of 295 respondents for the study. Farm households were used as units for analysis. Data was collected using questionnaires and analyzed using descriptive and inferential statistics. Logit model was used to estimate the parameters of the regression model. The results indicated that: social-economic factors were significant determinants of adoption of biogas technology (p – value 0.0000 < 0. 05) for all variables in North Rift region of Kenya. From the study findings, the following recommendations are drawn: Firstly government and other stakeholders should design policies that encourage the use of sustainable energy sources such as biogas. Secondly, incentives and provision of subsidies in terms of financial support should be given to households to acquire biogas devices. Thirdly households should be educated on benefits of using biogas. Government should also ensure efficient extension services in the study area by organizing workshops, trainings and make provisions to facilitate extension. (shrink)

The authors of the scientific monograph have come to the conclusion that the management of socio-economic systems in the terms of global challenges requires the use of mechanisms to ensure security, optimise the use of resource potential, increase competitiveness, and provide state support to economic entities. Basic research focuses on assessment of economic entities in the terms of global challenges, analysis of the financial system, migration flows, logistics and product exports, territorial development. The research results have been implemented in the (...) different decision-making models in the context of global challenges, strategic planning, financial and food security, education management, information technology and innovation. The results of the study can be used in the developing of directions, programmes and strategies for sustainable development of economic entities and regions, increasing the competitiveness of products and services, decision-making at the level of ministries and agencies that regulate the processes of managing socio-economic systems. The results can also be used by students and young scientists in the educational process and conducting scientific research on the management of socio-economic systems in the terms of global challenges. (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)

The paper discusses the possibility of constructing economic models using the methodology of model construction in classical mechanics. At the same time, unlike the "econophysical" approach, the properties of economic models are derived without involvement of any equivalent physical properties, but with account of the types of symmetry existing in the economic system. It has been shown that at this approach practically all known mechanical variables have their "economic twins". The variational principle is formulated on the basis of (...) formal mathematical construction without involving the subjective factor common to the majority of models in economics. The dynamics of interaction of two companies has been studies in details, on the basis of which we can proceed to modeling of more complex and realistic economic systems. Prediction of the possibility of constructing economic theory on the basis of primary principles analogously to physics has been made. (shrink)

The aim of this paper is to investigate the current debate on the state of economics from a methodological perspective. We claim that the majority of contributions criticizing modern economics are not based on clear methodological principles and thus many of them are not correct. We show this with respect to such issues as the problem of realisticness of models and their assumptions, the role of mathematics in economics, the way we conceptualize the relation between (...) class='Hi'>economics (theory) and economy (empiria), as well as the general problem of comparing theories. In doing so we use the research apparatus taken form the philosophy of science and also we benefit a lot from recent developments in the philosophy of economics. Finally, we show one of the paradoxes of that debate, namely that many critics of economics accuse economists of using the wrong language (mathematics) while they do not use proper language themselves while criticizing economics, namely the apparatus taken from the philosophy of science. (shrink)

In 1995, as a student of psychology inspired by natural science, I defined a logical model of personality explaining psychosis. I created (for my MA thesis, 1998 and grant research, 1999) new kind of tests assessing intelligence, creativity, prejudices, expectations to show more exact methods in psychology. During my Phd study in economics, I developed 'Maximization of Uniqueness (Originality)' model enhancing the classic utility to explain irrational motivations linking economics and psychology. Later I became computer programmer developing functional (...) programming. According to Personality model (and my experience in chess composition), I've built server and client logic of information system www.each.co.uk, and produced visual art. I presented the excerpts of 'Personality Model' in a few articles, and later as part of my art exhibitions: From Animation (Oct 2013, Holland Park, London), Parallax 12 (Feb 2015, Chelsea Town Hall, London), Fading Memory (Sep 2015, Weißenohe / Nuremberg, Germany). Another work: The Science is a subset of the Art extends Personality Model to art, society. At the end I add example and explanation of a special problem, when the higher intelligence leads to a wrong solution. It was published in Japanese Journal Problem Paradise in 1999. All presented results can be repeated. Computer testing would enable to acquire more data and more exact analysis. (shrink)

Economic theories of democratic legitimacy (discussed here as minimalist theories) 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 (1) (...) that the minimalist criterion of democratic legitimacy is self-defeating and (2) 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)

This paper discusses ethical issues surrounding Integrated Assessment Models (IAMs) of the economic effects of climate change, and how climate economists acting as policy advisors ought to represent the uncertain possibility of catastrophe. Some climate economists, especially Martin Weitzman, have argued for a precautionary approach where avoiding catastrophe should structure climate economists’ welfare analysis. This paper details ethical arguments that justify this approach, showing how Weitzman’s “fat tail” probabilities of climate catastrophe pose ethical problems for widely used IAMs. The (...) main claim is that economists who ignore or downplay catastrophic risks in their representations of uncertainty likely fall afoul of ethical constraints on scientists acting as policy advisors. Such scientists have duties to honestly articulate uncertainties and manage (some) inductive risks, or the risks of being wrong in different ways. (shrink)

The authors of the scientific monograph have come to the conclusion that ensuring sustainable development and security of economic systems in the new geostrategic realities requires the use of mechanisms for state protection of national economic interests, innovative outsourcing and digital technologies, and environmental protection. Basic research focuses on assessment the economic security of insurance companies, logistics processes, farms, healthcare organisations, retail and e-commerce, and tourist destinations. The research results have been implemented in the different decision-making models in the (...) new geostrategic realities, human resource management, environmental and international security, use of artificial intelligence, and city branding. The results of the study can be used in the developing policies, programmes and strategies for public-private partnerships, post-crisis recovery of Ukraine, and decision-making at the level of ministries and agencies that regulate the processes of managing sustainable development and security. The results can also be used by students and young scientists in the educational process and conducting scientific research on sustainable development and security of economic systems. (shrink)