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Inductive reasoning and economic behavior

Inductive reasoning and economic behavior

Journal of Institutional Studies, , vol.6 (no.3),
p. 6-12

20 years have passed since Brian Arthur’s "Inductive Reasoning and Bounded Rationality" was published. However, the issues raised by B. Arthur have not lost their relevance and importance. In the present paper various approaches to economic behavior in modern economic theory are outlined, in the context of perfect - deductive - rationality and inductive reasoning. To illustrate the importance of inductive reasoning, in addition to a bar problem the effect of traffic jams is considered. It is emphasized that the studies of economic behavior in complex adaptive systems should take into account the fact that regularity of social interactions inevitably generates experience that is to be reflected in actors’ understanding the essence of social interactions. This experience forms the behavioral patterns that are used by the actors to structure the social reality. To ensure the regularity of structured social interactions, embedded evolutionary mechanisms must exist, to “regulate” the incidence of relevant and irrelevant behavior models and, consequently, of local rules, ethical (moral) norms and institutions.

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Institutional matrices theory, or X&Y theory: the main provisions and applications

Institutional matrices theory, or X&Y theory: the main provisions and applications

Journal of Institutional studies, , Vol.6 (no.3),
p. 14-33

The main provisions of the institutional matrices theory (or X&Y theory) and its applications, which are discussed on the pages of the book “Institutional Matrices and Development in Russia. An Introduction to the X&Y Theory” (third edition), are presented in the paper . Earlier editions of the book first appeared in 2000 and 2001. And, the 2001 edition still benefits from brisk demand by Russian social scientists and their university students. According to data from the Scientific Electronic Library ELIBRARY.RU, the 2001 edition registers as the book most frequently cited by Russian sociologists, and as the third book most frequently cited by economists. At a host of universities throughout Russia, institutional matrices theory is currently included in the curricula in sociology, political science, and institutional economics. This new edition offers some improvements; by clarifying key theoretical points, offering new empirical data, and juxtaposing the author’s forecasts to empirical evidence. This reviewing edition is more comprehensive and better designed in order that the reader might readily access and quickly comprehend the X&Y-theory advanced by an author.

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Institutional-Structural Impediments to National Innovation Systems in Latin America: A Veblenian Perspective

Institutional-Structural Impediments to National Innovation Systems in Latin America: A Veblenian Perspective

Journal of Institutional studies, , Vol. 6 (no.3),
p. 34-53

This paper presents a Veblenian-Institutionalist analysis of the evolutionary path of endogenous innovation capacities, emphasizing the current era. While the primary focus is on Latin America, particularly Brazil in recent decades, Veblen’s highly original understanding of “Technik” provides a point of departure. Contemporary contributions to his theory of institutional change inform the analysis of Latin America. Technology is analyzed in as an institution as well as a factor of production. Technological determinism is alien to the Veblenian perspective. National Innovation Systems are complex weavings of institutional strands first emerging in Germany and the U.S. Veblen presented an important proto-analysis of these systems. Neo-Schumpeterians have carried-forward this analysis, but only within a more restricted theoretical framework. Using these theoretical strands to advance the understanding of the political economy of Latin America has not been a focus of the Eurocentric National Innovation Systems research agenda. In Latin America during the Second Technological Revolution (1870¬1913), due to its pre-industrial structure, no significant transfers of the massive new technological capacities developed in Germany and the U.S. occurred. With proto¬industrialization and later the onset of the era of Import Substitution Industrialization (1930-1980), Latin America entered its second of three periods of institutional-structural transformation. During this period of shallow industrialization promotion of autonomous innovation capacities was rarely pursued. The third structural transformation, Neoliberalism, has, in many respects, opened the way for adverse path dependent processes, particularly with regard to endogenous technological capabilities. Latin American has shifted further away from the frontiers of science and innovation. Annual Total Factor Productivity growth is near zero, tied with that of Sub-Saharan Africa at the world’s lowest rate. Only Brazil has seriously pursued the construction of a National Innovation System.

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Metamorphoses of satisficing optimal consumption-leisure choice: inequality aversion, risk aversion, and family altruism

Metamorphoses of satisficing optimal consumption-leisure choice: inequality aversion, risk aversion, and family altruism

Journal of Institutional studies, , Vol. 6 (no.3),
p. 54-66

The paper discovers attitudes towards risk and inequality under satisficing optimal consumption-leisure choice. The search for satisficing price that equalizes marginal costs of search with its marginal benefit, matches risk aversion with inequality seeking behavior. The risk neutrality could happen under the decreasing marginal utility of money that creates the unstable equilibrium. This unstable equilibrium could result either in the waste of money under the Veblen effect, or in the mathematical “fold” catastrophe of family altruism. The paper argues that the move from risk aversion to risk seeking happens when the consumer begins to invest in children.

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Sustainable consumer lending: local communities, rationality, and economic policy

Sustainable consumer lending: local communities, rationality, and economic policy

Journal of Institutional studies, , Vol. 6 (no.3),
p. 67-82

As recent studies on issues related to sustainable local development in context of financial inclusion have shown, a research gap exists showing the lack of attention to retail product and service development aimed at harmonization of interests among all the parties involved in consumer lending system. Discussed in terms of financial inclusion, sustainable consumer lending is proposed to start with development and introduction of new, rational, consumer loans and credit practices. A sustainable consumer lending model is suggested as involving, in institutional perspective, local communities as its essential element, rational consumer loan being considered as a feature of the model. Regional and municipal economic policies aimed at alignment of the interests of borrowers and lenders, along with sustainable territorial development priorities, are proposed to induce community-oriented product development in retail banking. Small mono-industrial towns of the Russian Federation are viewed as the testing areas for regional or municipal authorities to support practical implementation and replication of such sustainable practices.

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Modernization and economic development: institutional factors of the social welfare growth

Modernization and economic development: institutional factors of the social welfare growth

Journal of Institutional studies, , Vol. 6 (no.3),
p. 83-95

Over the last few decades the theoretical views on the development process have greatly changed in response to changes in the historical reality of the development process, strengthening the relationship between developed and developing countries. The paper presents a brief analysis of the theoretical foundations of the modernization theory. The relationship between economic growth, modernization and institutions is investigated in the paper. In the analysis of this relationship the author considers three sets of issues: first, whether the institutions contribute borrowed from developed countries, the development of developing countries; second, what determinants determine the development level of the country; third, why some countries can not get out of the vicious circle of poverty. The author concludes that the answer to the first question can not be in the affirmative, the other two issues are largely debatable. The author examines the impact of institutional factors on the social welfare in the Third World countries based on a review of the theories of modernization, economic development, dependency and world-system approach. The emphasis is on the need for collective action to address the vulnerabilities of "global" governance, which is a consequence of the borrowing institutions from developed countries without traditional structures and norms are implemented in the community.

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The political economy of institutions: the problem of defining the subject of research

The political economy of institutions: the problem of defining the subject of research

Journal of Institutional studies, , Vol. 6 (no.3),
p. 96-121

The subject and the central theme of the paper is not only institutions as the institutional theory, or more precisely, the theory of institutions. Central questions, the answers to which we want to get, are as follows. First, define boundaries of the subject domain in the institutional theory framework. Second, to answer the question, is it possible to exist any particular theory in the framework of the boundary or it will be only a kind of "branch of knowledge" or "head" in the framework of a more general theory (as the theme costs in microeconomics)? Third, if such a theory is possible, what is a private research methodology in this area and whether there is an independent a "tool box" to explore institutions?

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Analysis of the heterogeneity unconventional monetary policy easing

Analysis of the heterogeneity unconventional monetary policy easing

Journal of Institutional studies, , Vol. 6 (no.3),
p. 122-131

The paper is an attempt to systematize the modern practice of the unconventional monetary policy. Special attention is paid to the unconventional easing measures that have become the main tool CB to overcome the crisis. Based on analysis of the experience unconventional monetary policy of the Fed conclusions are made about the heterogeneity of this measures, which are sometimes called the term "quantitative easing", classified types of easing policies, allocated their distinctive features, the direction of action, used tools.

Views: 2011

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Public-private partnership as a subject of institutional analysis: to the problem of formal institutions systematization

Public-private partnership as a subject of institutional analysis: to the problem of formal institutions systematization

Journal of Institutional studies, , Vol. 6 (no.3),
p. 132-145

In the paper the approaches to the content of the "public-private partnership" category and the classification of the PPP, existing in domestic and foreign literature are discussed. The institutional nature of this phenomenon from the point of view of asset specificity and the protection to the opportunism threat is detected. The basic institutions, that governing PPP at the federal level (both active and draft legislation), are considered and their tier character is shown. The authors compare the current law in the field of PPP by subjects characteristic, the object of regulation, the type of contract, the rights and obligations of the partners. The prevalence in the law of interests and benefits of the public side is mentioned.

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Institutional factors of chronic poverty formation in modern Russia

Institutional factors of chronic poverty formation in modern Russia

Journal of Institutional studies, , Vol. 6 (no.3),
p. 146-159

The paper deals with the institutional factors of chronic poverty - a new specific subgroup of modern Russian poverty, which becomes very similar to a classic European and American underclass. There are market (level of education, labor activity, specifics of employment, including professional affiliation, etc.) and non-market (the type of locality of residence, gender and age composition of the group, marital status of its members, etc.) characteristics of the group provided in the paper. The paper also includes the detailed analysis of all households of the group investigated - the size and composition of households, as well as the specifics of kinship ties between its members.

Views: 3074

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