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E-book No Prices No Games! : Four Economic Models

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Penilaian

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We regard Economic Theory as a collection of models, each viewed as a storyor a fable rather than as a testable scientific model to be verified or refuted(seeRubinstein(2012)). Models in Economic Theory are “useful” in the samesense that fables are.Perhaps, there is no boy who literally “cried wolf”,but we nevertheless tell the story to teach our children about the dangers ofexaggeration. Likewise, the fables we tell in Economic Theory are not meant tobe “true” but, rather, are intended to draw our attention to some aspect of realeconomic life. We view the construction and analysis of models in EconomicTheory as a cultural endeavour rather than a scientific one.Almost all models of interaction between agents in current EconomicTheory belong to one of two families:Markets or Games.In marketmodels, there are conflicts over limited resources that are resolved throughthe emergence of prices, which are taken as given by the agents. These pricesbring order to the economic chaos by orchestrating the behaviour of selfishagents. In game-theoretical models, each agent (player) chooses a strategy,and an equilibrium is a profile of strategies such that each agent’s strategy isindividually optimal, given the correct prediction of other players’ behavior.In other words, in a market, each agent chooses his best alternative given theprevailing prices, while in a game, each agent chooses his best strategy basedon correct forecasts of what other agents intend to do.While market models dominated Economic Theory for most of the 20thcentury, GameTheory subsequently captured the crown.In the last fewdecades, Economic Theory has seen another change: economic theoristshave liberated themselves from the rigid assumption of full rationality in thepursuit of materialistic goals. The Bounded Rationality literature replaced the rationality assumption with explicit reference to decision procedures, whilethe Behavioral Economics literature added realistic psychological motives topurely materialistic considerations. However, these developments left in placethe standard view of economic interactions as being resolved through prices or games.

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Ketersediaan

Informasi Detail

Judul Seri

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No. Panggil

330.01 RIC n

Penerbit

London : Open Book Publishers., 2024

Deskripsi Fisik

154 hlm

Bahasa

English

ISBN/ISSN

9781805113102

Klasifikasi

330.01

Tipe Isi

text

Tipe Media

computer

Tipe Pembawa

online resource

Edisi

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Subjek

Philosophy and Theory of Economics

Info Detail Spesifik

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Pernyataan Tanggungjawab

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Versi lain/terkait

Lampiran Berkas

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