doi 10.1287/mksc.1100.0561

Research Title: The role of social, cultural and symbolic capital in generating na-tional competitive position in Sierra Leone

Much recent research in economics focuses on exploring behavioral anomalies, i.e., systematic deviations from the assumptions of the rationally self-interested model of man. Laboratory studies are used to identify seeming inconsistencies with micro-economic theory on the level of individuals. Since economics is a social science, this article proposes that the next crucial step consists in shifting the focus to the macro-level. It examines the process through which behavioral anomalies are aggregated to a societal outcome. Since individuals are reactive when they interact with others and face institutional constraints, the aggregation process may lead to different outcomes than what has been observed in individual-level studies: the respective anomalies may disappear, or they may become stronger on the macro-level. The discussion demonstrates that there are a great number of aspects to be analyzed. The paper presents fragments of what could become a more extensive field of research.

Inequality aversion and voting on redistribution

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The first impression of them was one of elevated uplift. I turned to the person seated next to me and asked, “Who is that seasoned couple over there, tall gentleman, beautiful aristocratic lady, with the circle of love radiating from them as a beacon of life? ” We were at the wedding of the son of the late Pentti Kouri, a mutual dear friend, and I had spotted the Phelpses. They were obviously in love after decades together. Once the ceremony was over, I went up to them, and we started a conversation on the subject of love and lasting relationship, continuing well into the night over the wedding dinner. How relevant is the subject of love from the point of view of individual values, human pursuits, self-realization and becoming, the themes of this conference? Fundamental. Economics? Hardly relevant at all, if you take the dominant standard position. But from the point of view of Phelpsian Good Economy, I will propose, love is where the action is, the action of elevation and connectivity.

The Great Economic Thinkers, Robert Heilbroner gave an inspirational account of what economists do, an account that was assigned as supplemental reading to countless beginning economics students over decades. Heilbroner wrote that he chose the term “worldly philosophers ” because of the breadth and moral depth of economists ’ inquiry. The appellation stuck, and for many years it was common to refer to economists as worldly philosophers. The inspiration of that book has contributed to the desire for many to go on to become economists, and to productive lives as researchers. But, while the volume of research turned out by economists is most impressive, there are questions whether “worldly ” and “philosophical ” are represented as much as they should be in economic research. Has economics as a profession substantially lost sight of the idealism that existed in earlier decades? Has the strong impulse to pursue narrow specialization in order to propel research to the frontier led to some loss of moral perspective? The financial crisis that started in 2007 and that continues today is widely taken in the popular press as evidence of a lapse, moral or otherwise, in the wisdom and judgment of the economics profession. Why was it that the profession as a whole failed to anticipate and raise any warning about the biggest financial crisis in the better part of a century? Countless critics

We study the effect of frequent trading opportunities and categorization on pricing of a risky asset. Frequent opportunities to trade can lead to large distortions in prices if some agents forecast future prices using a simplified model of the world that fails to distinguish between some states. In the limit as the period length vanishes, these distortions take a particular form: the price must be the same in any two states that a positive mass of agents categorize together. Price distortions therefore tend to be large when different agents categorize states in different ways, even if each individual’s categorization is not very coarse. Similar results hold if, instead of using a simplified model of the world, some agents overestimate the likelihood of small probability events, as in prospect theory.

g it in ng, in They d tability re than xperim ’ (Luca t the d the es in about the future state of the global economy. A theory of individual expectations or market beliefs is therefore a crucial part of economic theory. Markets are expectations feedback systems and any dynamic economic model depends crucially