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The article focuses on neoclassical economic theory and the realities of individual decision-making described by behavioral economics to begin to grapple with the complex problem and people enroll in health insurance policies. It mentions repeal will have a negative impact on the insurance markets and negative implications of decreased health insurance enrollment, beyond just the instability that healthy people leaving insurance markets will cause.

Transaction cost economics, neoclassical economics, and the firm capabilities literatures propose theories of the firm that typically depict firm boundaries determined by a dichotomous choice: the make or buy decision. However, none of these theories presents a satisfying explanation as to why firms would concurrently source, i.e., simultaneously make and buy the same good. This study combines these organizational economics theories and compares when firms make, buy, and concurrently source through surveying small manufacturing firms. Support was shown for aspects of all three theories, with evidence indicating that concurrent sourcing is a distinctly different choice, rather existing along a make/buy continuum. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Various authors advocate consideration of stakeholder value concerns in organizational decision making. Brenner and Cochran (1990, 1991) propose a stakeholder theory of the firm which contains several propositions and a stakeholder value matrix. In order to begin any stakeholder model validation, an approach is needed to measure stakeholder value and influence weights. We propose a multicriteria decision modeling approach, utilizing the analytic hierarchy process, to estimate stakeholder value matrix weights. This approach is illustrated using a simplified example and suggestions are made regarding the process needed to begin to validate the stakeholder theory of the firm. [ABSTRACT FROM AUTHOR]

The author reviews the literature of real estate and concludes that over time it is becoming more and more inadequate. In light of the significance of the issues facing the real estate sector, particularly when compared to the progress made in other areas of economics, there is an increasing need for advanced research and new approaches. [ABSTRACT FROM AUTHOR]

The article discusses the cost-benefit analysis (CBA) of neoclassical economics that provide detailed operational guidance for public policy. It mentions the guidelines imposed by the government of Australia that mandate the use of CBA for decision-making. It outlines the two aspects of CBA that have a major bearing on its practical application.

We use playing time in the National Basketball Association to investigate whether sunk costs affect decision making. Behavioral economics implies that teams favor players chosen in the lottery and first round of the draft because of the greater financial and psychic commitment to them. Neoclassical economics implies that only current performance matters. We build on previous work in two ways. First, we better capture potential playing time by accounting for time lost to injuries or suspension. Second, we use regression discontinuity to capture changes when a player's draft position crosses thresholds. We find that teams allocate no more time to highly drafted players. ( JEL L83, J23, D03) [ABSTRACT FROM AUTHOR]

Social valuation of ecosystem services and public policy alternatives is one of the greatest challenges facing ecological economists today. Frameworks for valuing nature increasingly include shared/social values as a distinct category of values. However, the nature of shared/social values, as well as their relationship to other values, has not yet been clearly established and empirical evidence about the importance of shared/social values for valuation of ecosystem services is lacking. To help address these theoretical and empirical limitations, this paper outlines a framework of shared/social values across five dimensions: value concept, provider, intention, scale, and elicitation process. Along these dimensions we identify seven main, non-mutually exclusive types of shared values: transcendental, cultural/societal, communal, group, deliberated and other-regarding values, and value to society. Using a case study of a recent controversial policy on forest ownership in England, we conceptualise the dynamic interplay between shared/social and individual values. The way in which social value is assessed in neoclassical economics is discussed and critiqued, followed by consideration of the relation between shared/social values and Total Economic Value, and a review of deliberative and non-monetary methods for assessing shared/social values. We conclude with a discussion of the importance of shared/social values for decision-making. [ABSTRACT FROM AUTHOR]

Aggregate structural macroeconomic analysis (ASMA) is frequently criticised for being ad hoc and justified (if at all) only as a pragmatic expedient. This paper argues instead that ASMA is consistent with the principles of well-established bodies of social theory. Appeal to these principles reveals that ASMA is adequate and likely even necessary for the successful prosecution of macroeconomic inquiry. [ABSTRACT FROM PUBLISHER]

This paper outlines the contributions of J.M. Clark to institutional economics. Clark is sometimes seen as standing between institutional and neoclassical economics, but I argue that this view is not accurate. Clark was intimately involved in the definition, promotion, and defense of institutional economics in sessions of the American Economic Association and in a variety of other forums. No other member of the institutionalist group was as much involved in the professional discussion of institutional economics as J.M. Clark. In addition, Clark made a number of key contributions to institutionalist theory in the areas of psychology and economics, the costs of decision-making, overhead costs and business-pricing behavior, the accelerator mechanism and business cycles, workable and effective competition and competition policy, and social control. These contributions, together with the graduate students he trained at the University of Chicago and Columbia University, serve to place him in the center of the institutionalist movement and not on its periphery. [ABSTRACT FROM AUTHOR]

Stakeholder theorists distinguish between normative stakeholders, those who gain moral standing by making contributions to the firm, and derivative stakeholders, those who can constrain the corporate association even though they make no contribution. The board of directors has the legal authority to distinguish among these stakeholder groups and to distribute rights and obligations among these stakeholder groups. To be sure, this stakeholder formulation appropriately seizes on the firm's voluntary, associative character. Yet, the firm's constituents contribute assets and incur risks to participate in market, economic activities. And, as such, the firm's 'stakeholders' must share an imperfect language to assist in making two key economic decisions: (1) who are the legitimate and who are the derivative stakeholders; and (2) who should sit on the board? Still, stakeholder theorists have good reason to be skeptical of neoclassical economics. Its assumptions that all act opportunistically and that all can calculate rationally and fully hardly correspond to studies on the managerial experience of corporate coordination. However, advances in behavioral law and economics now provide a cogent economic logic that readily fits into a stakeholder mode. In brief, we argue that (1) the firm's economic purpose designates legitimacy to core stakeholders, to those who add value, assume unique risk, and can incur harm; (2) the board serves as the principal who coordinates these core stakeholders to sustain competitive advantage and new wealth creation; and (3) state incorporation law, Delaware in particular, reinforces the board's function. These, in turn, supply selection criteria for board membership. We aim to synchronize concepts from behavioral law and economics with stakeholder theory. [ABSTRACT FROM AUTHOR]

In this article we argue that puzzle of tax compliance can be explained, at least in part, by recognizing the typically neglected role of ethics in individual behavior; that is, individuals do not always behave as the selfish, rational, self-interested individuals portrayed in the standard neoclassical paradigm, but rather are often motivated by many other factors that have as their main foundation some aspects of 'ethics.' We argue that it is not possible to understand fully an individual's compliance decisions without considering in some form these ethical dimensions. Specifically, we argue here that there is much direct and indirect evidence that ethics differ across individuals and that these differences matter in significant ways for their compliance decisions. We then put this in the larger context of the inability of the standard neoclassical paradigm to explain compliance of at least some individuals, and we suggest several possible avenues by which theory can be expanded to incorporate ethics. We conclude by arguing that a full house of compliance strategies is needed to combat tax evasion, strategies that include the traditional 'enforcement' paradigm suggested by and consistent with neoclassical theory, a less traditional 'service' paradigm that recognizes the important role of a 'kinder and gentler' tax administration in encouraging compliance, and, importantly, a new 'trust' paradigm that is built on the foundation of ethics, in which the tax administration must recognize that it can erode the ethics of taxpayers by its own decisions. [ABSTRACT FROM AUTHOR]

Behavioural and experimental economics are part of an increasingly pluralistic mainstream economics, sharing with other recently established research programmes the revision of fundamental assumptions of the previously dominant neoclassical economics research programme. The recent proliferation and consolidation of these new approaches creates the possibility for the emergence of a new orthodoxy of economics, i.e. a new general research programme capable of replacing neoclassicism. The goal of this paper is to investigate the potential contribution of behavioural and experimental economics to help build a general research programme capable of supplanting neoclassical economics and thereby transforming economics. To this end, it focuses on two influential applied fields of behavioural and experimental economics—choice architecture and design economics. [ABSTRACT FROM AUTHOR]

The favorite—long shot bias describes the long-standing empirical regularity that betting odds provide biased estimates of the probability of a horse winning: long shots are overbet whereas favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet long shots because of risk-love. The competing behavioral explanations emphasize the role of misperceptions of probabilities. We provide novel empirical tests that can discriminate between these competing theories by assessing whether the models that explain gamblers' choices in one part of their choice set (betting to win) can also rationalize decisions over a wider choice set, including compound bets in the exacta, quinella, or trifecta pools. Using a new, large-scale data set ideally suited to implement these tests, we find evidence in favor of the view that misperceptions of probability drive the favorite—long shot bias, as suggested by prospect theory. [ABSTRACT FROM AUTHOR]

The article focuses on the viability of the self-management system. One of the major drawbacks of the self-management firm, according to the neoclassical school, is a perverse response to changes in demand. In the discussion of the horizon problem, it has been indicated that the property rights school drew attention to an important aspect of decision making in self-managed firms. It is true that workers in a society with limited property rights cannot take a proportion of the funds they accumulated as a part of the enterprise's capital assets when they leave the job. Workers enjoy the benefits of investment in the form of larger personal incomes only as long as they remain with the firm. The claim of the neoclassical institutionalists that the self-management system is inherently inefficient due to a lack of incentives by workers to perform well and a lack of interest by management to supervise workers is strongly exaggerated. At the same time, the praise of the capitalist corporation for its hierarchical structure of control as the best form of industrial organization which has no alternative is far from convincing.

Given the pervasive influence of neoclassical economic theory on the field of business, the opposition of the standard economists to the inclusion of moral factors in economic decisions provides an intellectual resistance to the ideas of many business ethicists. Etzioni (1988) offers a theoretical alternative to the neoclassical model, an alternative that includes a moral dimension. This article: (1) highlights the differences between Etzioni's proposed model and the neoclassical economic paradigm; (2) describes and critically evaluates Etzioni's proposed theory in view of his objective of synthesizing the neoclassical paradigm with a duty-based morality and (3) discusses the implications of Etzioni's proposed paradigm for the field of business ethics. [ABSTRACT FROM AUTHOR]

The article comments on the book "Investment Under Uncertainty," by Avinash K. Dixit and Robert S. Pindyck. The book discusses modern options for analyzing individual and business decisions, particularly on investment decisions. The following decision making models are explored in the book: uncertainty models, dynamic programming, stochastic process and neoclassical investment model. Applied analyses of neoclassical investment models fall into two categories. The first follows the user cost of capital approach. The second, compares the replacement cost of a marginal investment to its capitalized value.

Irving Fisher is rightly thought of as one of the pioneers of neoclassical economics. Fisher's contributions in Modern behavioral economics is characterized by three features. First, rational choice is used as a starting point for developing theories of economic decision-making and market equilibria. Second, actual individual behavior is analyzed using a variety of data-collection methods. Third, these observations of human behavior, along with some lessons from other social scientists are used to explain and understand the ways in which the rational theories fail to describe the world we live in. Two of Fisher's favorite topics, time preference and money illusion, illustrate how he utilizes this approach. In his book "The Theory of Interest," Fisher develops what is still thought of as the modern theory of intertemporal choice. The famous Fisher diagram is still an essential element of any course on microeconomics, macroeconomics, or finance. The outcome of this analysis is that at the margin everyone has the same preferences for intertemporal substitution.

The article focuses on the book Ethical Issues in Economics: From Altruism to Cooperation to Equity. The book analyzes the standard position of mainstream neoclassical economics on some fundamental issues that have a clear "moral" content and considers the legitimacy and the implications of alternative socioeconomic or moral-economic positions on these issues. The book also discusses the link between altruism, morality, and rationality. It analyzes two standard economic approaches to altruism, putting altruism into the individual utility function or equating altruism with cooperative behavior, and the alternative socioeconomic or moral-economic approaches. The book examines the treatment of altruism in a sample of recent economic works, considers the ethical and political non-neutrality of neoclassical economics. The book further discusses the interdependence between ethics, politics, and economics, arguing for the need to reestablish the supremacy of ethics over the others. The book also examines some of the moral presuppositions and potential ethical implications of game theory and laboratory tests.