Shaun Hargreaves Heap

Should we worry when economists misremember their history? 

Adam Smith, David Ricardo and John Stuart Mill made different but, effectively, complementary arguments in support of the idea that economic and social life could be positive-sum when guided by the right institutions. The right institutions were the liberal ones of competitive markets and the rule of law that enabled well-defined property rights and freedom of expression. In the context of the prevailing zero-sum ideas of Mercantilism at the time Smith wrote The Wealth of Nations, this was a potential ‘big picture’ contribution to the subsequent development of these institutions in today’s rich countries. This, however, is not how these Classical economists are now remembered. With the rise of zero-sum thinking and the related populist challenge to liberalism, this misremembering is especially worrying. Such memories matter for how economists think about what they do now and this is dangerous moment for them to forget that they were once champions of liberalism.

Patricia Rich 

The Ecological Rationality of Ambiguity (Joint work with Paolo Galeazzi)

People regularly face decisions in which there is ambiguity; that is, the true probabilities of decision-relevant events are not given. In such cases, there are different possible ways to respond. The agent could form and use a specific, subjective probability function, for example maximizing their expected utility. Alternatively, they could retain a less specific belief, represented for example by a set of probability functions. For this latter case, various decision rules have been studied, such as maxmin, regret minimization, and the Hurwicz criterion. Ambiguous beliefs and the associated decision rules have been thoroughly discussed and studied from the perspective of classical rationality, primarily by considering which axioms agents conform to or violate. We know very little about the ecological rationality of ambiguity, however. Ecological rationality pertains to the expected real-world outcomes, and especially how a decision rule’s performance depends on the context in which it is used. I report on a research program that investigates the ecological rationality of ambiguity, aiming to provide a better understanding of when ambiguous beliefs and simple decision heuristics lead to better results than expected utility maximization, and when expected utility maximization is best. I highlight the results of two simulation studies. The first focuses on simple heuristics for ambiguity, while the second focuses on strategic interaction. Both simulation studies reveal important contexts in which ambiguous beliefs and associated decision rules are ecologically rational. 

Jack Vromen

What evaluation criteria should be invoked in welfare economics when stakeholders have social preferences?

Social preference (aka other-regarding preference) models in behavioral economics posit that many people care not only about what they themselves have but also about what others have and do (Fehr and Charness 2025). The implications of this for normative behavioral welfare economics have barely been discussed. The reason for this lack of attention might well be that it is believed that standard welfare economics (and in particular its Social Welfare Function – SWF – framework) has no problem with accounting for social preferences of stakeholders. That belief might be well-taken, and it seems scholars more or less take for granted that their own view on how standard welfare economics should account for social preferences is the standard and correct one. But on closer inspection different scholars seem to have different ideas about how standard welfare economics can and should accommodate the presence of other-regarding concerns of stakeholders. There are scholars who hold that if stakeholders have social preferences, their satisfaction contributes to their own individual well-being (in just the same way as the satisfaction of their self-regarding preferences contribute to their own well-being). But there are others who disagree, arguing that while the satisfaction of someone’s social preferences does not affect that person’s own individual well-being, it might affect the individual well-beings of others. The latter scholars typically also argue that including social preferences of stakeholders in the evaluation of their individual well-beings can lead to undesirable double counting. What is striking about this disagreement is that this is not often noticed, let alone explicitly discussed. One might be inclined to argue that the disagreement is inconsequential in that it does not affect the social welfare evaluations that are eventually reached. But it is easy to point out that this might be incorrect; the decision to include or exclude social preferences in evaluations of individual well-beings (of the stakeholders having them) might lead to different and even opposite social welfare evaluations. In my talk I will point out that the flexibility and versatility of the prevailing SWF framework in standard welfare economics goes well beyond the above disagreement. I will show not only that the framework allows for still other interpretations and specifications of the framework, but also that there have been scholars actually promoting such interpretations and specifications. Stopping short of conceding that “anything goes” with the SWF framework, however, I also suggest that some headway can be made with a principled discussion of what sorts of preferences of stakeholders to defer to (if any) in welfare economics. The key idea here is one of purpose-dependency. I submit that the SWF framework can be, and actually has been, put to use to fulfil two different purposes: either to address the issue of what allocation of scarce resources can be called fair and efficient, or to address the issue of how social (or collective) decisions ought to be made. Depending on its purpose, I will argue that while it might be reasonable not to defer to social preferences of stakeholders (and even not to defer to any of their preferences) for the first purpose, it seems reasonable if not mandatory to defer to their social preferences for the second purpose.    

Emrah Aydinont 

Economic Models as Argumentative Devices

As the story goes, Arthur Laffer drew a curve (now known as the Laffer curve) on a napkin during a dinner to discuss a proposal to increase taxes, which cast doubt on the benefits of higher taxes and has been used to justify major tax cuts. Similarly, highly idealised models of efficient markets helped justify the financial deregulation that precipitated the 2008 crisis. Currently, as the world faces major environmental and societal challenges, economic models remain at the heart of arguments that will define our collective future. Yet, despite their profound influence, the way these models are used in policy arguments often goes unexamined. My aim in this talk is to convince you that we should pay closer attention to how economic models are used in policy arguments to support policy claims. I will first show, with examples, that models function as argumentative devices: they do not merely inform policy but are used to do persuasive work. Representation-focused accounts in philosophy of economics illuminate much about what models are and what they can (and cannot) do, but such accounts cannot fully capture this argumentative function. I will then argue that taking this view seriously pays off twice over: it sheds new light on long-standing methodological disputes within economics, and it clarifies the roles models play once they leave the seminar room and enter public debate. Finally, I’ll propose a simple framework for exposing the gaps and unwarranted leaps such arguments often conceal.

Catherine Herfeld

Awakening Sleeping Beauties in Economics: The Role of Model Transfer

Model transfer—the use of models developed in one domain to address problems in another—is widespread in science. Yet it remains underexplored, both empirically and philosophically. In this talk, I ask whether, and in what ways, model transfer can shape the impact trajectory of “sleeping beauty” papers in economics. Sleeping beauty papers are papers that go unnoticed for a long time and then, almost suddenly, attract significant attention (van Raan 2004). To address those questions, I present results from a co-citation analysis of a case of model transfer from economics to psychology, focusing on the uptake of economic models of temporal discounting, which we conducted using computational methods. This analysis shows how model transfer, in this specific case, contributed to the eventual surge in impact of a sleeping beauty paper in economics by helping to prepare what we call a “landing site” in which the model developed in the sleeping beauty paper could become applicable.

Antoinette Baujard 

Scrutinizing welfarism to revisit welfare economics

Because the marginal process of scientific research is by construction blind to broad perspectives, it may fail to identify relevant issues and solutions. I claim that history of economic thought and philosophy of economics are likely to provide such broader perspectives and to offer one necessary and primary step to imagine salutary improvement of economics per se. I here illustrate and defend this double claim by leveraging the history of the term “welfarism” to revisit welfare economics. “Welfarism” is a focus on utility (or more generally on welfare) to assess social states and help public decision making, but the exact meaning of the term evolves alongside welfare economics and its criticism. First, I show that some relevant tensions – e.g., regarding the articulation between positive and normative levels of analysis, or paternalism – can only be identified when considering and contrasting different historical moments, different disciplines, different perspectives, whether from public action or theory. Second, I highlight that two distinct categories of criticism were initially raised in Sen’s original definition: the information used in welfarist evaluations and the formal framework itself. I show that that welfare economics has gradually incorporated the informational issue, and is now potentially compatible with focusing on other values but utility – such as freedom, or multiple dimensions –, but that it continues to overlook major problems raised by the framework – such as the neglect of agency and individualism. I conclude by commenting the epistemic challenges raised by broad narratives.

Alessandra Basso 

Measurement in Economics

Measurement is pervasive in economics. By quantifying variables such as GDP, inequality, well-being, inflation, and unemployment, measurement enables comparisons, the monitoring of trends over time, and the generation of precise predictions. This lecture offers an account of what economic measurement is, examining the functions it serves and the distinctive features that characterize it across a wide variety of practices in the field. The lecture continues with an overview of the key questions philosophers have raised about measurement, and then focuses on one in particular: what counts as a good measurement. This question is especially relevant in economics, where the same variable can often be measured in multiple ways. The lecture examines different accounts of why this is so, exploring both the negative and positive connotations of this plurality. On the negative side, the coexistence of multiple measures of the same variable leaves measurement unsettled, casts doubt on its reliability, and complicates the drawing of coherent conclusions. On the positive side, plurality offers an enriching diversity of perspectives and can deepen our understanding of complex economic phenomena. The lecture concludes by examining the descriptive and normative implications of this discussion.

Guilhem Lecouteux

Welfare or well-being: which objective for public policy?

‘Welfare’ is a central notion in normative economics, whereas ‘well-being’ is a more common term in public policy. However, although the two terms are often used synonymously in economic philosophy, they correspond to different concepts within each discipline and have notably different approaches to measurement. Furthermore, as most scholars in both economics and public policy have not received formal training in philosophy, they may contribute to a semantic confusion between different approaches to welfare/well-being. This lecture aims to provide a methodological appraisal of both concepts, highlighting the confusion within economics regarding their proper interpretation and normative implications — particularly in the context of behavioural economics, where individuals’ ‘preferences’ are not necessarily coherent. Finally, I will propose a semantic clarification of the terms used in the debate, which I hope will better reflect current practices in economics and in public policy.