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Rostow's stages of growth Below is an outline of Rostow's six stages of growth: Rostow claimed that these stages of growth were designed to tackle a number of issues, some of which he identified himself, writing: "Under what impulses did traditional, agricultural societies begin the process of their modernization? When and how did regular growth become a built-in feature of each society? What forces drove the process of sustained growth along and determined its contours? What common social and political features of the growth process may be discerned at each stage? What forces have determined relations between the more developed and less developed areas; and what relation if any did the relative sequence of growth bear to outbreak of war? And finally where is compound interest taking us? Is it taking us to communism; or to the affluent suburbs, nicely rounded out with social overhead capital; to destruction; to the moon; or where?" Rostow asserts that countries go through each of these stages fairly linearly, and set out a number of conditions that were likely to occur in investment, consumption, and social trends at each state. Not all of the conditions were certain to occur at each stage, however, and the stages and transition periods may occur at varying lengths from country to country, and even from region to region. Rostow's model is a part of the liberal school of economics, laying emphasis on the efficacy of modern concepts of free trade and the ideas of Adam Smith | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth It disagrees with Friedrich List's argument which states that economies which rely on exports of raw materials may get "locked in", and would not be able to diversify, regarding this Rostow's model states that economies may need to depend on raw material exports to finance the development of industrial sector which has not yet of achieved superior level of competitiveness in the early stages of take-off. Rostow's model does not disagree with John Maynard Keynes regarding the importance of government control over domestic development which is not generally accepted by some ardent free trade advocates. The basic assumption given by Rostow is that countries want to modernize and grow and that society will agree to the materialistic norms of economic growth. An economy in this stage has a limited production function which barely attains the minimum level of potential output. This does not entirely mean that the economy's production level is static. The output level can still be increased, as there was often a surplus of uncultivated land which can be used for increasing agricultural production. Modern science and technology has yet to be introduced. As a result, these pre-Newtonian societies, unaware of the possibilities to manipulate the external world, rely heavily on manual labor and self-sufficiency to survive. States and individuals utilize irrigation systems in many instances, but most farming is still purely for subsistence. There have been technological innovations, but only on ad hoc basis | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth All of that this can result in increases in output, but never beyond an upper limit which cannot be crossed. Trade is predominantly regional and local, largely done through barter, and the monetary system is not well developed. Investment's share never exceeds 5% of total economic production. Countries in this stage could include Ghana and Togo. Wars, famines and epidemics like plague cause initially expanding populations to halt or shrink, limiting the single greatest factor of production: human manual labor. Volume fluctuations in trade due to political instability are frequent; historically, trading was subject to great risk and transport of goods and raw materials was expensive, difficult, slow and unreliable. The manufacturing sector and other industries have a tendency to grow but are limited by inadequate scientific knowledge and a "backward" or highly traditionalist frame of mind which contributes to low labour productivity. In this stage, some regions are entirely self-sufficient. In settled agricultural societies before the Industrial Revolution, a hierarchical social structure relied on near-absolute reverence for tradition, and an insistence on obedience and submission. This resulted in concentration of political power in the hands of landowners in most cases; everywhere, family and lineage, and marriage ties, constituted the primary social organization, along with religious customs, and the state only rarely interacted with local populations and in limited spheres of life | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth This social structure was generally feudalistic in nature. Under modern conditions, these characteristics have been modified by outside influences, but the least developed regions and societies fit this description quite accurately.. In the second stage of economic growth the economy undergoes a process of change for building up of conditions for growth and take off. Rostow said that these changes in society and the economy had to be of fundamental nature in the socio-political structure and production techniques. This pattern was followed in Europe, parts of Asia, the Middle East and Africa. There is also a second or third pattern in which he said that there was no need for change in socio-political structure because these economies were not deeply caught up in older, traditional social and political structures. The only changes required were in economic and technical dimensions. The nations which followed this pattern were in North America and Oceania (New Zealand and Australia). There are three important dimensions to this transition: firstly, the shift from an agrarian to an industrial or manufacturing society begins, albeit slowly. Secondly, trade and other commercial activities of the nation broaden the market's reach not only to neighboring areas but also to far-flung regions, creating international markets | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth Lastly, the surplus attained should not be wasted on the conspicuous consumption of the land owners or the state, but should be spent on the development of industries, infrastructure and thereby prepare for self-sustained growth of the economy later on. Furthermore, agriculture becomes commercialized and mechanized via technological advancement; shifts increasingly towards cash or export-oriented crops; and there is a growth of agricultural entrepreneurship. The strategic factor is that investment level should be above 5% of the national income. This rise in investment rate depends on many sectors of the economy. According to Rostow capital formation depends on the productivity of agriculture and the creation of social overhead capital. Agriculture plays a very important role in this transition process as the surplus quantity of the produce is to be utilized to support an increasing urban population of workers and also becomes a major exporting sector, earning foreign exchange for continued development and capital formation. Increases in agricultural productivity also lead to expansion of the domestic markets for manufactured goods and processed commodities, which adds to the growth of investment in the industrial sector. Social overhead capital creation can only be undertaken by government, in Rostow's view | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth Government plays the driving role in development of social overhead capital as it is rarely profitable, it has a long gestation period, and the pay-offs accrue to all economic sectors, not primarily to the investing entity; thus the private sector is not interested in playing a major role in its development. All these changes effectively prepare the way for "take-off" only if there is basic change in attitude of society towards risk taking, changes in working environment, and openness to change in social and political organisations and structures. According to Rostow, the preconditions to take-off begins from an external intervention by more developed and advanced societies, which "set in motion ideas and sentiments which initiated the process by which a modern alternative to the traditional society was constructed out of the old culture." The pre-conditions of take-off closely track the historic stages of the (initially) British Industrial Revolution. Referring to the graph of savings and investment, notably, there is a steep increase in the rate of savings and investment from the stage of "Pre Take-off" till "Drive to Maturity:" then, following that stage, the growing rate of savings and investment moderates. This initial and accelerating steep increase in savings and investment is a pre-condition for the economy to reach the "Take-off" stage and far beyond. This stage is characterized by dynamic economic growth | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth As Rostow suggests, all is premised on a sharp stimulus (or multiple stimuli) that is/are any or all of economic, political and technological change. The main feature of this stage is rapid, self-sustained growth. Take-off occurs when sector led growth becomes common and society is driven more by economic processes than traditions. At this point, the norms of economic growth are well established and growth becomes a nation's "second nature" and a shared goal. In discussing the take-off, Rostow is noted to have adopted the term "transition", which describes the process of a traditional economy becoming a modern one. After take-off, a country will generally take as long as fifty to one hundred years to reach the mature stage according to the model, as occurred in countries that participated in the Industrial Revolution and were established as such when Rostow developed his ideas in the 1950s. Per Rostow there are three main requirements for take-off:1. The rate of productive investment should rise from approximately 5% to over 10% of national income or net national product2. The development of one or more substantial manufacturing sectors, with a high rate of growth;3. The existence or quick emergence of a political, social and institutional framework which exploits the impulses to expansion in the modern sector and the potential external economy effects of the take-off | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth The third requirement implies that the needed capital must be mobilized from domestic resources and steered into the economy, rather than into domestic or state consumption. Industrialization becomes a crucial phenomenon as it helps to prepare the basic structure for structural changes on a massive scale. Rostow says that this transition does not follow a set trend as there are a variety of different motivations or stimulus which began this growth process. Take off requires a large and sufficient amount of loanable funds for expansion of the industrial sector which generally come from two sources which are: The take-off also needs a group of entrepreneurs in the society who pursue innovation and accelerate the rate of growth in the economy. For such an entrepreneurial class to develop, firstly, an ethos of "delayed gratification", a preference for capital accumulation over expenditure, and high tolerance of risk must be present. Secondly, entrepreneurial groups typically develop because they can not secure prestige and power in their society via marriage, via participating in well-established industries, or through government or military service (among other routes to prominence) because of some disqualifying social or legal attribute; and lastly, their rapidly changing society must tolerate unorthodox paths to economic and political power | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth The ability of a country to make it through this stage depends on the following major factors: An example of a country in the Take-off stage of development is Equatorial Guinea. It has the largest increases in GDP growth since 1980 and the rate of productive investment has risen from 5% to over 10% of income or product. In the table note that Take-off periods of different countries are the same as the industrial revolution in those countries. After take-off, there follows a long interval of sustained growth known as the stage of drive to maturity. Rostow defines it "as the period when a society has effectively applied the range of modern technology to the bulk of its resources." Now regularly growing economy drives to extend modern technology over the whole front of its economic activity. Some 10-20% of the national income is steadily invested, permitting output regularly to outstrip the increase in population. The makeup of the economy changes unceasingly as technique improves, new industries accelerate, older industries level off. The economy finds its place in the international economy: goods formerly imported are produced at home; new import requirements develop, and new export commodities to match them. The leading sectors in an economy will be determined by the nature of resource endowments and not only by technology. On comparing the dates of take-off and drive to maturity, these countries reached the stage of maturity in approximately 60 years | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth The structural changes in the society during this stage are in three ways: During this stage a country has to decide whether the industrial power and technology it has generated is to be used for the welfare of its people or to gain supremacy over others, or the world "in toto". A prime example of a country in the Drive to Maturity stage is South Africa. It is developing a world-class infrastructure- including a modern transport network, widely available energy, and sophisticated telecommunications facilities. Additionally, the commercial farm sector shed 140,000 jobs, a decline of roughly 20%, in the eleven-year period from 1988 to 1998. This diversity leads to reduction in poverty rate and increasing standards of living, as the society no longer needs to sacrifice its comfort in order to build up certain sectors. The age of high mass-consumption refers to the period of contemporary comfort afforded by many western nations, wherein consumers concentrate on durable goods, and hardly remember the subsistence concerns of previous stages. Rostow uses the Buddenbrooks dynamics metaphor to describe this change in attitude. In Thomas Mann's 1901 novel, "Buddenbrooks", a family is chronicled for three generations. The first generation is interested in economic development, the second in its position in society. The third, already having money and prestige, concerns itself with the arts and music, worrying little about those previous, earthly concerns | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth So too, in the age of high mass-consumption, a society is able to choose between concentrating on military and security issues, on equality and welfare issues, or on developing great luxuries for its upper class. Each country in this position chooses its own balance between these three goals. There is a desire to develop an egalitarian society and measures are taken to reach this goal. According to Rostow, a country tries to determine its uniqueness and factors affecting it are its political, geographical and cultural structure and also values present in its society. Historically, the United States is said to have reached this stage first, followed by other western European nations, and then Japan in the 1950s. When proposed, this step is more of a theoretical speculation by Rostow rather than an analytical step in the process by Rostow. Individuals begin having larger families and do not value income as a pre-requisite for more vacation days. Consumer products become more durable and more diverse. New Americans will behave in a way where the high economic security and level mass consumption is considered normal. Rostow does make the point that it is possible with the large baby boom it could either cause economic issues or dictate an even larger diffusion of consumer goods. With increasing urban and suburban population there will be undoubtedly an increase in consumer goods and services as well | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth This stage was later discussed in Rostow's book "Politics and the Stages of Growth" published in 1971, in which he called the stage "the search for quality". Rostow's thesis is biased towards a western model of modernization, but at the time of Rostow the world's only mature economies were in the west, and no controlled economies were in the "era of high mass-consumption." The model de-emphasizes differences between sectors in capitalistic vs. communistic societies, but seems to innately recognize that modernization can be achieved in different ways in different types of economies. Another assumption that Rostow took is of trying to fit economic progress into a linear system. This assumption is questioned due to empirical evidence of many countries making 'false starts' then reaching a degree of progress and change and then slipping back. E.g.: In the case of contemporary Russia slipping back from high mass-consumption to a country in transition. Another criticism of Rostow's work is that it considers large countries with a large population (Japan), with natural resources available at just the right time in its history (Coal in Northern European countries), or with a large land mass (Argentina). He has little to say and indeed offers little hope for small countries, such as Rwanda, which do not have such advantages. Neo-liberal economic theory to Rostow, and many others, does offer hope to much of the world that economic maturity is coming and the age of high mass-consumption is nigh | https://en.wikipedia.org/wiki?curid=739974 |
Rostow's stages of growth This does leave a potential "grim meathook future" for the outliers, which do not have the resources, political will, or external backing to become competitive with already developed economies. (See Dependency theory) | https://en.wikipedia.org/wiki?curid=739974 |
Backwardness is a lack of progress by a person or group to some perceived cultural norm of advancement, such as for example traditional societies relative to modern scientific and technologically advanced industrialized societies. The Model is a theory of economic growth created by Alexander Gerschenkron. The model postulates that the more backward an economy is at the outset of economic development, the more likely certain conditions are to occur: The backwardness model is often contrasted with the Rostovian take-off model developed by W.W. Rostow, which presents a more linear and structuralist model of economic growth, planning it out in defined stages. The two models are not mutually exclusive, however, and many countries appear to follow both models rather adequately. Thorstein Veblen's 1915 "Imperial Germany and the Industrial Revolution" is an extended essay comparing the United Kingdom and Germany, and concluding that the slowing of growth in Britain and the rapid advances in Germany were due to the "penalty of taking the lead". British industry worked out, in a context of small competing firms, the best ways to produce efficiently. Germany's backwardness gave it an advantage in that the best practice could be adopted in large-scale firms. | https://en.wikipedia.org/wiki?curid=744176 |
Market fundamentalism Market fundamentalism, also known as free-market fundamentalism, is a term applied to a strong belief in the ability of unregulated "laissez-faire" or free-market capitalist policies to solve most economic and social problems. Palagummi Sainath believes Jeremy Seabrook, a journalist and campaigner, first used the term. The term was used by Jonathan Benthall in an "Anthropology Today" editorial in 1991 and by John Langmore and John Quiggin in their 1994 book "Work for All". According to economist John Quiggin, the standard features of economic fundamentalist rhetoric are dogmatic assertions combined with the claim that anyone who holds contrary views is not a real economist. However, Kozul-Wright states in his book "The Resistible Rise of Market Fundamentalism" that the "ineluctability of market forces" neoliberals and conservative politicians tend to stress and their confidence on a chosen policy rest on a "mixture of implicit and hidden assumptions, myths about the history of their own countries' economic development, and special interests camouflaged in their rhetoric of general good". The sociologists Fred L. Block and Margaret Somers use the label "because the term conveys the quasi-religious certainty expressed by contemporary advocates of market self-regulation" | https://en.wikipedia.org/wiki?curid=744849 |
Market fundamentalism Joseph Stiglitz used the term in his autobiographical essay in acceptance of Nobel Memorial Prize in Economic Sciences to criticize some International Monetary Fund policies, arguing: "More broadly, the IMF was advocating a set of policies which is generally referred to alternatively as the Washington consensus, the neo-liberal doctrines, or market fundamentalism, based on an incorrect understanding of economic theory and (what I viewed) as an inadequate interpretation of the historical data". Critics of "laissez-faire" policies have used the term to denote what they perceive as a misguided belief or deliberate deception that capitalist free markets provide the greatest possible equity and prosperity, or the view that any interference with the market process decreases social well being. Users of the term include adherents of interventionist, mixed economy and protectionist positions as well as billionaires such as George Soros; economists such as Nobel Laureates Joseph Stiglitz and Paul Krugman; and Cornell University historian Edward E. Baptist. Soros suggests that market fundamentalism includes the belief that the best interests in a given society are achieved by allowing its participants to pursue their own financial self-interest with no restraint or regulatory oversight | https://en.wikipedia.org/wiki?curid=744849 |
Market fundamentalism Critics claim that in modern society with worldwide conglomerates, or even merely large companies, the individual has no protection against fraud nor harm caused by products that maximize income by imposing externalities on the individual consumer as well as society. Historian Edward E. Baptist contends that "unrestrained domination of market forces can sometimes amplify existing forms of oppression into something more horrific" such as slavery and that "market fundamentalism doesn't always provide the best solution for every economic or social problem". | https://en.wikipedia.org/wiki?curid=744849 |
Generalized game In computational complexity theory, a generalized game is a game or puzzle that has been generalized so that it can be played on a board or grid of any size. For example, generalized chess is the game of chess played on an "n×n" board, with 2"n" pieces on each side. Generalized Sudoku includes Sudokus constructed on an "n×n" grid. Complexity theory studies the asymptotic difficulty of problems, so generalizations of games are needed, as games on a fixed size of board are finite problems. For many generalized games which last for a number of moves polynomial in the size of the board, the problem of determining if there is a win for the first player in a given position is PSPACE-complete. Generalized hex and reversi are PSPACE-complete. For many generalized games which may last for a number of moves exponential in the size of the board, the problem of determining if there is a win for the first player in a given position is EXPTIME-complete. Generalized chess, go and checkers are EXPTIME-complete. | https://en.wikipedia.org/wiki?curid=746550 |
Dependency theory is the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former. It is a central contention of dependency theory that poor states are impoverished and rich ones enriched by the way poor states are integrated into the "world system". This theory was officially developed in the late 1960s following World War II, as scholars searched for the root issue in the lack of development in Latin America The theory arose as a reaction to modernization theory, an earlier theory of development which held that all societies progress through similar stages of development, that today's underdeveloped areas are thus in a similar situation to that of today's developed areas at some time in the past, and that, therefore, the task of helping the underdeveloped areas out of poverty is to accelerate them along this supposed common path of development, by various means such as investment, technology transfers, and closer integration into the world market. rejected this view, arguing that underdeveloped countries are not merely primitive versions of developed countries, but have unique features and structures of their own; and, importantly, are in the situation of being the weaker members in a world market economy. no longer has many proponents as an overall theory , though some writers have argued for its continuing relevance as a conceptual orientation to the global division of wealth | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Dependency theorists typically divides into two different categories surrounding the theory: liberal reformists and neo-Marxists. Those that align with liberal reformists typically believe that targeted policy intervention is the most effective approach to improving lives. Comparatively, neo-Marxists believe a command centered economy is the more effective approach to improving lives. originates with two papers published in 1949 – one by Hans Singer, one by Raúl Prebisch – in which the authors observe that the terms of trade for underdeveloped countries relative to the developed countries had deteriorated over time: the underdeveloped countries were able to purchase fewer and fewer manufactured goods from the developed countries in exchange for a given quantity of their raw materials exports. This idea is known as the Prebisch–Singer thesis. Prebisch, an Argentine economist at the United Nations Commission for Latin America (UNCLA), went on to conclude that the underdeveloped nations must employ some degree of protectionism in trade if they were to enter a self-sustaining development path. He argued that import-substitution industrialisation (ISI), not a trade-and-export orientation, was the best strategy for underdeveloped countries. The theory was developed from a Marxian perspective by Paul A. Baran in 1957 with the publication of his "The Political Economy of Growth" | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory shares many points with earlier, Marxist, theories of imperialism by Rosa Luxemburg and Vladimir Lenin, and has attracted continued interest from Marxists. Some authors identify two main streams in dependency theory: the Latin American Structuralist, typified by the work of Prebisch, Celso Furtado, and Aníbal Pinto at the United Nations Economic Commission for Latin America (ECLAC, or, in Spanish, CEPAL); and the American Marxist, developed by Paul A. Baran, Paul Sweezy, and Andre Gunder Frank. Using the Latin American dependency model, the Guyanese Marxist historian Walter Rodney, in his book "How Europe Underdeveloped Africa", described in 1972 an Africa that had been consciously exploited by European imperialists, leading directly to the modern underdevelopment of most of the continent. The theory was popular in the 1960s and 1970s as a criticism of modernization theory, which was falling increasingly out of favor because of continued widespread poverty in much of the world. At that time the assumptions of liberal theories of development were under attack. It was used to explain the causes of overurbanization, a theory that urbanization rates outpaced industrial growth in several developing countries | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory The Latin American Structuralist and the American Marxist schools had significant differences but agreed on some basic points:[B]oth groups would agree that at the core of the dependency relation between center and periphery lays [lies] the inability of the periphery to develop an autonomous and dynamic process of technological innovation. Technology – the Promethean force unleashed by the Industrial Revolution – is at the center of stage. The Center countries controlled the technology and the systems for generating technology. Foreign capital could not solve the problem, since it only led to limited transmission of technology, but not the process of innovation itself. Baran and others frequently spoke of the international division of labour – skilled workers in the center; unskilled in the periphery – when discussing key features of dependency. Baran placed surplus extraction and capital accumulation at the center of his analysis. Development depends on a population's producing more than it needs for bare subsistence (a surplus). Further, some of that surplus must be used for capital accumulation – the purchase of new means of production – if development is to occur; spending the surplus on things like luxury consumption does not produce development. Baran noted two predominant kinds of economic activity in poor countries | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory In the older of the two, plantation agriculture, which originated in colonial times, most of the surplus goes to the landowners, who use it to emulate the consumption patterns of wealthy people in the developed world; much of it thus goes to purchase foreign-produced luxury items –automobiles, clothes, etc. – and little is accumulated for investing in development. The more recent kind of economic activity in the periphery is industry—but of a particular kind. It is usually carried out by foreigners, although often in conjunction with local interests. It is often under special tariff protection or other government concessions. The surplus from this production mostly goes to two places: part of it is sent back to the foreign shareholders as profit; the other part is spent on conspicuous consumption in a similar fashion to that of the plantation aristocracy. Again, little is used for development. Baran thought that political revolution was necessary to break this pattern. In the 1960s, members of the Latin American Structuralist school argued that there is more latitude in the system than the Marxists believed. They argued that it allows for partial development or "dependent development"–development, but still under the control of outside decision makers. They cited the partly successful attempts at industrialisation in Latin America around that time (Argentina, Brazil, Mexico) as evidence for this hypothesis | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory They were led to the position that dependency is not a relation between commodity exporters and industrialised countries, but between countries with different degrees of industrialisation. In their approach, there is a distinction made between the economic and political spheres: economically, one may be developed or underdeveloped; but even if (somewhat) economically developed, one may be politically autonomous or dependent. More recently, Guillermo O'Donnell has argued that constraints placed on development by neoliberalism were lifted by the military coups in Latin America that came to promote development in authoritarian guise (O'Donnell, 1982). The importance of multinational corporations and state promotion of technology were emphasised by the Latin American Structuralists. Fajnzybler has made a distinction between systemic or authentic competitiveness, which is the ability to compete based on higher productivity, and spurious competitiveness, which is based on low wages. The third-world debt crisis of the 1980s and continued stagnation in Africa and Latin America in the 1990s caused some doubt as to the feasibility or desirability of "dependent development". The "sine qua non" of the dependency relationship is not the difference in technological sophistication, as traditional dependency theorists believe, but rather the difference in financial strength between core and peripheral countries–particularly the inability of peripheral countries to borrow in their own currency | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory He believes that the hegemonic position of the United States is very strong because of the importance of its financial markets and because it controls the international reserve currency – the US dollar. He believes that the end of the Bretton Woods international financial agreements in the early 1970s considerably strengthened the United States' position because it removed some constraints on their financial actions. "Standard" dependency theory differs from Marxism, in arguing against internationalism and any hope of progress in less developed nations towards industrialization and a liberating revolution. Theotonio dos Santos described a "new dependency", which focused on both the internal and external relations of less-developed countries of the periphery, derived from a Marxian analysis. Former Brazilian President Fernando Henrique Cardoso (in office 1995–2002) wrote extensively on dependency theory while in political exile during the 1960s, arguing that it was an approach to studying the economic disparities between the centre and periphery. Cardoso summarized his version of dependency theory as follows: The analysis of development patterns in the 1990s and beyond is complicated by the fact that capitalism develops not smoothly, but with very strong and self-repeating ups and downs, called cycles. Relevant results are given in studies by Joshua Goldstein, Volker Bornschier, and Luigi Scandella | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory With the economic growth of India and some East Asian economies, dependency theory has lost some of its former influence. It still influences some NGO campaigns, such as Make Poverty History and the fair trade movement. Two other early writers relevant to dependency theory were François Perroux and Kurt Rothschild. Other leading dependency theorists include Herb Addo, Walden Bello, Ruy Mauro Marini, Enzo Faletto, Armando Cordova, Ernest Feder, Pablo González Casanova, Keith Griffin, Kunibert Raffer, Paul Israel Singer, and Osvaldo Sunkel. Many of these authors focused their attention on Latin America; the leading dependency theorist in the Islamic world is the Egyptian economist Samir Amin. Tausch, based on works of Amin from 1973 to 1997, lists the following main characteristics of periphery capitalism: The American sociologist Immanuel Wallerstein refined the Marxist aspect of the theory and expanded on it, to form world-systems theory. World Systems Theory is also known as WST and aligns closely with the idea of the "rich get richer and the poor get poorer" Wallerstein states that the poor and peripheral nations continue to get more poor as the developed core nations use their resources to become richer. Wallerstein developed the World Systems Theory utilizing the Dependence theory along with the ideas of Marx and the Annales School. This theory postulates a third category of countries, the "semi-periphery", intermediate between the core and periphery | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Wallerstein believed in a tri-modal rather than a bi-modal system because he viewed the world-systems as more complicated than a simplistic classification as either core or periphery nations. To Wallerstein, many nations do not fit into one of these two categories, so he proposed the idea of a semi-periphery as an in between state within his model. In this model, the semi-periphery is industrialized, but with less sophistication of technology than in the core; and it does not control finances. The rise of one group of semi-peripheries tends to be at the cost of another group, but the unequal structure of the world economy based on unequal exchange tends to remain stable. Tausch traces the beginnings of world-systems theory to the writings of the Austro-Hungarian socialist Karl Polanyi after the First World War, but its present form is usually associated with the work of Wallerstein. has also been associated with Johan Galtung's structural theory of imperialism. Dependency theorists hold that short-term spurts of growth notwithstanding, long-term growth in the periphery will be imbalanced and unequal, and will tend towards high negative current account balances. Cyclical fluctuations also have a profound effect on cross-national comparisons of economic growth and societal development in the medium and long run. What seemed like spectacular long-run growth may in the end turn out to be just a short run cyclical spurt after a long recession. Cycle time plays an important role | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Giovanni Arrighi believed that the logic of accumulation on a world scale shifts over time, and that the 1980s and beyond once more showed a deregulated phase of world capitalism with a logic, characterized - in contrast to earlier regulatory cycles - by the dominance of financial capital. It is argued that, at this stage, the role of unequal exchange in the entire relationship of dependency cannot be underestimated. Unequal exchange is given if double factorial terms of trade of the respective country are < 1.0 (Raffer, 1987, Amin, 1975). The former ideological head of the Blekingegade Gang and political activist Torkil Lauesen argues in his book "The Global Perspective" that political theory and practice stemming from dependency theory are more relevant than ever. He postulates that the conflict between countries in the core and countries in the periphery has been ever-intensifying and that the world is at the onset of a resolution of the core-periphery contradiction – that humanity is "in for an economic and political rollercoaster ride". Economic policies based on dependency theory have been criticized by free-market economists such as Peter Bauer and Martin Wolf and others: Market economists cite a number of examples in their arguments against dependency theory. The improvement of India's economy after it moved from state-controlled business to open trade is one of the most often cited ("see also" economy of India, "The Commanding Heights") | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory India's example seems to contradict dependency theorists' claims concerning comparative advantage and mobility, as much as its economic growth originated from movements such as outsourcing – one of the most mobile forms of capital transfer. South Korea and North Korea provide another example of trade-based development vs. autocratic self-sufficiency. Following the Korean War, North Korea pursued a policy of import substitution industrialization as suggested by dependency theory, while South Korea pursued a policy of export-oriented industrialization as suggested by comparative advantage theory. In 2013, South Korea's per capita GDP was 18 times that of North Korea. In Africa, states which have emphasized import-substitution development, such as Zimbabwe, have typically been among the worst performers, while the continent's most successful non-oil based economies, such as Egypt, South Africa, and Tunisia, have pursued trade-based development. According to economic historian Robert C. Allen, dependency theory's claims are "debatable" and that the protectionism that was implemented in Latin America as a solution ended up failing. The countries incurred too much debt and Latin America went into a recession. One of the problems was that the Latin American countries simply had too small national markets to be able to efficiently produce complex industrialized goods, such as automobiles. A large argument opposing the Dependency Theory is the subjectivity in the theory and the terms that are often used | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Worlds such as developed and underdeveloped that construct the argument of dependency theory are subjective and different people will view these different terms in different lights. Many nations have been affected by both the positive and negative effects of the Dependency Theory. The idea of national dependency on another nation is not a relatively new concept even though the dependency theory itself is rather new. Dependency is perpetuated by using capitalism and finance. The dependent nations come to owe the developed nations so much money and capital that it is not possible to escape the debt, continuing the dependency for the foreseeable future. An example of the dependency theory is that during the years of 1650 to 1900 Britain and other European nations took over or colonialized other nations. They used their superior military technology and naval strength at the time to do this. This began an economic system in America, Africa, and Asia to then export the natural materials from their land to Europe. After shipping the materials to Europe, Britain and the other European countries made products with these materials and then sent them back to colonized parts of America, Africa, and Asia. This resulted in the transfer of wealth from these regions’ products to Europe for taking control of the products. is considered rather controversial and many say it is not still in effect. Some scholars and politicians claim that with the decline of colonialism, dependency has been erased | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Other scholars counter this approach, and state that our society still has national powerhouses such as the United States, European Nations such as Germany and Britain, China, and rising India that hundreds of other nations rely on for military aid, economic investments, etc. An example of this is the Land of Israel that in years 1946-2017 the United States has assisted in 228.7 billion dollars towards their Department of Defense. The continuous funding for Israel and other nations is not pure generosity, it is pure strategy from the nations that have the funds to indebt developing nations for control and colonization. This strategy is what develops weaker nations into dependent and peripheral nations with little to no chance for growth or improvement. Aid dependency is an economic problem described as the reliance of less developed countries (LDCs) on more developed countries (MDCs) for financial aid and other resources. More specifically, aid dependency refers to the proportion of government spending that is given by foreign donors. Having an aid dependency ratio of about 15%-20% or higher will have negative effects on the country. What causes dependency is the inhibition of development and economic/political reform that results from trying to use aid as a long-term solution to poverty-ridden countries. Aid dependency arose from long term provisions of aid to countries in need in which the receiving country became accustomed to and developed a dependency syndrome | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Aid dependency is most common today in Africa. The top donors as of 2013 were the United States, the United Kingdom, and Germany while the top receivers were Afghanistan, Vietnam, and Ethiopia. International development aid became widely popularized post World-War Two due to first-world countries trying to create a more open economy as well as cold war competition. In 1970, the United Nations agreed on 0.7% of Gross National Income per country as the target for how much should be dedicated for international aid. In his book “Ending Aid Dependence”, Yash Tondon describes how organizations like the International Monetary Fund (IMF) and the World Bank (WB) have driven many African countries into dependency. During the economic crisis in the 1980s and the 1990s, a great deal of Sub-Saharan countries in Africa saw an influx of aid money which in turn resulted in dependency over the next few decades. These countries became so dependent that the President of Tanzania, Benjamin W. Mkapa, stated that “Development aid has taken deep root to the psyche of the people, especially in the poorer countries of the South. It is similar to drug addiction.” While the widespread belief is that aid is motivated only by assisting poor countries, and this is true in some cases, there is substantial evidence that suggests strategic, political, and welfare interests of the donors are driving forces behind aid. Maizels and Nissanke (MN 1984), and McKinlay and Little (ML, 1977) have conducted studies to analyze donors’ motives | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory From these studies they found that US aid flows are influenced by military as well as strategic factors. British and French aid is given to countries that were former colonies, and also to countries in which they have significant investment interest and strong trade relations. A main concern revolving around the issue of foreign aid is that the citizens in the country that is benefiting from aid lose motivation to work after receiving aid. In addition, some citizens will deliberately work less, resulting in a lower income, which in turn qualifies them for aid provision. Aid dependent countries are associated with having a lowly motivated workforce, a result from being accustomed to constant aid, and therefore the country is less likely to make economic progress and the living-standards are less likely to be improved. A country with long-term aid dependency remains unable to be self-sufficient and is less likely to make meaningful GDP growth which would allow for them to rely less on aid from richer countries. Food aid has been criticized heavily along with other aid imports due to its damage to the domestic economy. A higher dependency on aid imports results in a decline in the domestic demand for those products. In the long-run, the agricultural industry in LDC countries grows weaker due to long-term declines in demand as a result from food aid. In the future when aid is decreased, many LDC countries's agricultural markets are under-developed and therefore it is cheaper to import agricultural products | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory This occurred in Haiti, where 80% of their grain stocks come from the United States even after a large decrease in aid. In countries where there is a primary-product dependency on an item being imported as aid, such as wheat, economic shocks can occur and push the country further into an economic crisis. Political dependency occurs when donors have too much influence in the governance of the receiving country. Many donors maintain a strong say in the government due to the country’s reliance on their money, causing a decrease in the effectiveness and democratic-quality of the government. This results in the receiving country’s government making policy that the donor agrees with and supports rather than what the people of the country desire. Government corruptibility increases as a result and inhibits reform of the government and political process in the country. These donors can include other countries or organizations with underlying intentions that may not be in favor of the people. Political dependency is an even stronger negative effect of aid dependency in countries where many of the problems stem from already corrupt politics and a lack of civil rights. For example, Zimbabwe and the Democratic Republic of the Congo both have extremely high aid dependency ratios and have experienced political turmoil. The politics of the Democratic Republic of the Congo have involved civil war and changing of regimes in the 21st century and have one of the highest aid dependency ratios in Africa | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory As aid dependence can shift accountability away from the public and to being between state and donors, “presidentialism” can arise. Presidentialism is when the president and the cabinet within a political system have the power in political decision-making. In a democracy, budgets and public investment plans are to be approved by parliament. It is common for donors to fund projects outside of this budget and therefore go without parliament review. This further reinforces presidentialism and establishes practices that undermine democracy. Disputes over taxation and use of revenues are important in a democracy and can lead to better lives for citizens, but this cannot happen if citizens and parliaments don’t know the complete proposed budget and spending priorities. Aid dependency also compromises ownership which is marked by the ability of a government to implement its own ideas and policies. In aid dependent countries, the interests and ideas of aid agencies start to become priority and therefore erode ownership. Aid dependent countries rank worse in terms of level of corruption than in countries that are not dependent. Foreign aid is a potential source of rents, and rent seeking can manifest as increased public sector employment. As public firms displace private investment, there is less pressure on the government to remain accountable and transparent as a result of the weakened private sector. Aid assists corruption which then fosters more corruption and creates a cycle | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Foreign aid provides corrupt governments with free cash flow which further facilitates the corruption. Corruption works against economic growth and development, holding these poor countries down. Since 2000, aid dependency has decreased by about ⅓. This can be seen in countries like Ghana, whose aid dependency decreased from 47% to 27%, as well as in Mozambique, where the aid dependency decreased from 74% to 58%. Target areas to decrease aid dependence include job creation, regional integration, and commercial engagement and trade. Long-term investment in agriculture and infrastructure are key requirements to end aid dependency as it will allow the country to slowly decrease the amount of food aid received and begin to develop its own agricultural economy and solve the food insecurity problem. Political corruption has been a strong force associated with maintaining dependency and being unable to see economic growth. During the Obama administration, congress claimed that the anti-corruption criteria The Millennium Challenge Corporation (MCC) used was not strict enough and was one of the obstacles to decreasing aid dependence. Often, in countries with a high corruption perception index the aid money is taken from government officials in the public sector or taken from other corrupt individuals in the private sector | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory Efforts to disapprove aid to countries where corruption is very prevalent have been a common tool used by organizations and governments to ensure funding is used properly but also to encourage other countries to fix the corruption. It has been proven that foreign aid can prove useful in the long-run when directed towards the appropriate sector and managed accordingly. Specific pairing between organizations and donors with similar goals has produced more success in decreasing dependency than the tradition form of international aid which involves government to government communication. Botswana is a successful example of this. Botswana first began receiving aid in 1966. In this case, Botswana decided which areas needed aid and found donors accordingly rather than simply accepting aid from other countries whose governments had a say in where the money would be distributed towards. Recipient-led cases such as Botswana are more effective partially because it negates the donor’s desirability to report numbers on the efficiency of their programs (that often include short-term figures such as food distributed) and instead focuses more on long-term growth and development that may be directed more towards infrastructure, education, and job development. Africa is far more aid dependent than other regions which makes it the most important to look at when examining the impact of aid. Over $1 trillion in aid has been given to Africa from rich countries in the past fifty years | https://en.wikipedia.org/wiki?curid=747259 |
Dependency theory A study by the World Bank cited that up to 85% of aid flows were used in ways other than the original intention. In the most aid-dependent countries there has been a growth rate of negative 0.2%, and poverty rates in Africa increased from 11% to 66% when aid flows were at their peak. There are certainly other factors at play when assessing the corruption and poverty rampant in Africa, but with all of the information available about the damaging effects of aid dependency, Africa becomes a prime example of them. | https://en.wikipedia.org/wiki?curid=747259 |
Anchoring (cognitive bias) Anchoring or focalism is a cognitive bias where an individual depends too heavily on an initial piece of information offered (considered to be the "anchor") when making decisions. Anchoring occurs when, during decision making, an individual depends on an initial piece of information to make subsequent judgments. Those objects near the anchor tend to be assimilated toward it and those further away tend to be displaced in the other direction. Once the value of this anchor is set, all future negotiations, arguments, estimates, etc. are discussed in relation to the anchor. This bias occurs when interpreting future information using this anchor. For example, the initial price offered for a used car, set either before or at the start of negotiations, sets an arbitrary focal point for all following discussions. Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer, even if said prices are still relatively higher than the actual market value of the car. The original description of the anchoring effect came from psychophysics. When judging stimuli along a continuum, it was noticed that the first and last stimuli were used to compare the other stimuli (this is also referred to as "end anchoring". This was applied to attitudes by Sherif et al. in 1958 in their article "Assimilation and contrast effects of anchoring stimuli on judgments". Anchoring and adjustment is a psychological heuristic that influences the way people intuitively assess probabilities | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) According to this heuristic, people start with an implicitly suggested reference point (the "anchor") and make adjustments to it to reach their estimate. A person begins with a first approximation (anchor) and then makes incremental adjustments based on additional information. These adjustments are usually insufficient, giving the initial anchor a great deal of influence over future assessments. The anchoring and adjustment heuristic was first theorized by Amos Tversky and Daniel Kahneman. In one of their first studies, participants were asked to compute, within 5 seconds, the product of the numbers one through eight, either as formula_1 or reversed as formula_2. Because participants did not have enough time to calculate the full answer, they had to make an estimate after their first few multiplications. When these first multiplications gave a small answer – because the sequence started with small numbers – the median estimate was 512; when the sequence started with the larger numbers, the median estimate was 2,250. (The correct answer is 40,320.) In another study by Tversky and Kahneman, participants observed a roulette wheel that was predetermined to stop on either 10 or 65. Participants were then asked to guess the percentage of the United Nations that were African nations. Participants whose wheel stopped on 10 guessed lower values (25% on average) than participants whose wheel stopped at 65 (45% on average). The pattern has held in other experiments for a wide variety of different subjects of estimation | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) As a second example, in a study by Dan Ariely, an audience is first asked to write the last two digits of their social security number and consider whether they would pay this number of dollars for items whose value they did not know, such as wine, chocolate and computer equipment. They were then asked to bid for these items, with the result that the audience members with higher two-digit numbers would submit bids that were between 60 percent and 120 percent higher than those with the lower social security numbers, which had become their anchor. Various studies have shown that anchoring is very difficult to avoid. For example, in one study students were given anchors that were obviously wrong. They were asked whether Mahatma Gandhi died before or after age 9, or before or after age 140. Clearly neither of these anchors can be correct, but when the two groups were asked to suggest when they thought he had died, they guessed significantly differently (average age of 50 vs. average age of 67). Other studies have tried to eliminate anchoring much more directly. In a study exploring the causes and properties of anchoring, participants were exposed to an anchor and asked to guess how many physicians were listed in the local phone book. In addition, they were explicitly informed that anchoring would "contaminate" their responses, and that they should do their best to correct for that. A control group received no anchor and no explanation | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) Regardless of how they were informed and whether they were informed correctly, all of the experimental groups reported higher estimates than the control group. Thus, despite being expressly aware of the anchoring effect, participants were still unable to avoid it. A later study found that even when offered monetary incentives, people are unable to effectively adjust from an anchor. Several theories have been put forth to explain what causes anchoring, and although some explanations are more popular than others, there is no consensus as to which is best. In a study on possible causes of anchoring, two authors described anchoring as easy to demonstrate, but hard to explain. At least one group of researchers has argued that multiple causes are at play, and that what is called "anchoring" is actually several different effects. In their original study, Tversky and Kahneman put forth a view later termed anchoring-as-adjustment. According to this theory, once an anchor is set, people adjust away from it to get to their final answer; however, they adjust insufficiently, resulting in their final guess being closer to the anchor than it would be otherwise. Other researchers also found evidence supporting the anchoring-and-adjusting explanation. However, later researchers criticized this model, because it is only applicable when the initial anchor is outside the range of acceptable answers. To use an earlier example, since Mahatma Gandhi obviously did not die at age 9, then people will adjust from there | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) If a reasonable number were given, though, there would be no adjustment. Therefore, this theory cannot, according to its critics, explain the anchoring effect. Another study found that the anchoring effect holds even when the anchor is subliminal. According to Tversky and Kahneman's theory, this is impossible, since anchoring is only the result of conscious adjustment. Because of arguments like these, anchoring-and-adjusting has fallen out of favor. In the same study that criticized anchoring-and-adjusting, the authors proposed an alternate explanation regarding selective accessibility, which is derived from a theory called "confirmatory hypothesis testing". In short, selective accessibility proposes that when given an anchor, a judge (i.e. a person making some judgment) will evaluate the hypothesis that the anchor is a suitable answer. Assuming it is not, the judge moves on to another guess, but not before accessing all the relevant attributes of the anchor itself. Then, when evaluating the new answer, the judge looks for ways in which it is similar to the anchor, resulting in the anchoring effect. Various studies have found empirical support for this hypothesis. This explanation assumes that the judge considers the anchor to be a plausible value so that it is not immediately rejected, which would preclude considering its relevant attributes. For example, an online-experiment showed that ratings of previous members of the crowd could act as an anchor | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) When displaying the results of previous ratings in the context of business model idea evaluation, people incorporate the displayed anchor into their own decision making process, leading to a decreasing variance of ratings. More recently, a third explanation of anchoring has been proposed concerning attitude change. According to this theory, providing an anchor changes someone's attitudes to be more favorable to the particular attributes of that anchor, biasing future answers to have similar characteristics as the anchor. Leading proponents of this theory consider it to be an alternate explanation in line with prior research on anchoring-and-adjusting and selective accessibility. A wide range of research has linked sad or depressed moods with more extensive and accurate evaluation of problems. As a result of this, earlier studies hypothesized that people with more depressed moods would tend to use anchoring less than those with happier moods. However, more recent studies have shown the opposite effect: sad people are "more" likely to use anchoring than people with happy or neutral mood. Early research found that experts (those with high knowledge, experience, or expertise in some field) were more resistant to the anchoring effect. Since then, however, numerous studies have demonstrated that while experience can sometimes reduce the effect, even experts are susceptible to anchoring | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) In a study concerning the effects of anchoring on judicial decisions, researchers found that even experienced legal professionals were affected by anchoring. This remained true even when the anchors provided were arbitrary and unrelated to the case in question. Research has correlated susceptibility to anchoring with most of the Big Five personality traits. People high in agreeableness and conscientiousness are more likely to be affected by anchoring, while those high in extraversion are less likely to be affected. Another study found that those high in openness to new experiences were more susceptible to the anchoring effect. The impact of cognitive ability on anchoring is contested. A recent study on willingness to pay for consumer goods found that anchoring decreased in those with greater cognitive ability, though it did not disappear. Another study, however, found that cognitive ability had no significant effect on how likely people were to use anchoring. The term “anchoring” describes both a psychological-behavioural effect (known as the anchoring effect) as well as the tactical approach making use of this effect. The anchoring effect is where we set our estimation for the true value of the item at hand. In the negotiation process anchoring serves to determine an accepted starting point for the subsequent negotiations. As soon as one side states their first price offer, the (subjective) anchor is set. The counterbid (counter-anchor) is the second-anchor | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) In addition to the initial research conducted by Tversky and Kahneman, multiple other studies have shown that anchoring can greatly influence the estimated value of an object. For instance, although negotiators can generally appraise an offer based on multiple characteristics, studies have shown that they tend to focus on only one aspect. In this way, a deliberate starting point can strongly affect the range of possible counteroffers. The process of offer and counteroffer results in a mutually beneficial arrangement. However, multiple studies have shown that initial offers have a stronger influence on the outcome of negotiations than subsequent counteroffers. An example of the power of anchoring has been conducted during the Strategic Negotiation Process Workshops. During the workshop, a group of participants is divided into two sections: buyers and sellers. Each side receives identical information about the other party before going into a one-on-one negotiation. Following this exercise, both sides debrief about their experiences. The results show that where the participants anchor the negotiation had a significant effect on their success. Anchoring affects everyone, even people who are highly knowledgeable in a field. Northcraft and Neale conducted a study to measure the difference in the estimated value of a house between students and real-estate agents. In this experiment, both groups were shown a house and then given different listing prices | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) After making their offer, each group was then asked to discuss what factors influenced their decisions. In the follow-up interviews, the real-estate agents denied being influenced by the initial price, but the results showed that both groups were equally influenced by that anchor. Anchoring can have more subtle effects on negotiations as well. Janiszewski and Uy investigated the effects of precision of an anchor. Participants read an initial price for a beach house, then gave the price they thought it was worth. They received either a general, seemingly nonspecific anchor (e.g., $800,000) or a more precise and specific anchor (e.g., $799,800). Participants with a general anchor adjusted their estimate more than those given a precise anchor ($751,867 vs $784,671). The authors propose that this effect comes from difference in scale; in other words, the anchor affects not only the starting "value", but also the starting "scale". When given a general anchor of $20, people will adjust in large increments ($19, $21, etc.), but when given a more specific anchor like $19.85, people will adjust on a lower scale ($19.75, $19.95, etc.). Thus, a more specific initial price will tend to result in a final price closer to the initial one. As for the question of setting the first or second anchor, the party setting the second anchor has the advantage in that the counter-anchor determines the point midway between both anchors. Due to a possible lack of knowledge the party setting the first anchor can also set it too low, i.e | https://en.wikipedia.org/wiki?curid=751106 |
Anchoring (cognitive bias) against their own interests. Generally negotiators who set the first anchor also tend to be less satisfied with the negotiation outcome, than negotiators who set the counter-anchor. This may be due to the regret or sense that they did not achieve or rather maximise the full potential of the negotiations. However, studies suggest that negotiators who set the first offer frequently achieve economically more advantageous results. | https://en.wikipedia.org/wiki?curid=751106 |
Joan Robinson Joan Violet Robinson ("née" Maurice; 31 October 1903 – 5 August 1983) was a British economist well known for her wide-ranging contributions to economic theory. She was a central figure in what became known as post-Keynesian economics. Before leaving to fight in the Second Boer War, Joan's father, Frederick Barton Maurice, married Margaret Helen Marsh, the daughter of Frederick Howard Marsh, and the sister of Edward Marsh, at St George's, Hanover Square. Joan Maurice was born in 1903, a year after her father's return from Africa. During World War II, Robinson worked on a few different Committees for the wartime national government. During this time, she visited the Soviet Union as well as China, gaining an interest in underdeveloped and developing nations. Robinson was a frequent visitor to Centre for Development Studies (CDS), Thiruvananthapuram, India. She was a Visiting Fellow at the Centre in the mid-1970s. She instituted an endowment fund to support public lectures at the Centre. She was a frequent visitor to the Centre until January, 1982 and participated in all activities of the Centre and especially student seminars. Professor Robinson donated royalties of two of her books ("Selected Economic Writings", Bombay: Oxford University Press, 1974, "Introduction to Modern Economics" (jointly with John Eatwell), Delhi; Tata McGraw Hill, 1974) to CDS | https://en.wikipedia.org/wiki?curid=752599 |
Joan Robinson Also, Robinson made several trips to China, reporting her observations and analyses in "China: An Economic Perspective" (1958), "The Cultural Revolution in China" (1969), and "Economic Management in China" (1975; 3rd edn, 1976), in which she praised the Cultural Revolution. In October 1964, Robinson also visited North Korea, which implemented social reforms and collectivisation at the time, and wrote in her report "Korean Miracle" that the country's success was due to "the intense concentration of the Koreans on national pride" under Kim Il-sung, "a messiah rather than a dictator." She also stated in reference to the division of Korea that "[o]bviously, sooner or later the country must be reunited by absorbing the South into socialism." During her last decade, she became more and more pessimistic about the possibilities of reforming economic theory, as expressed, for example, in her essay "Spring Cleaning." She studied economics at Girton College, Cambridge, and immediately after graduation in 1925, she married the economist Austin Robinson. In 1937, she became a lecturer in economics at the University of Cambridge. She joined the British Academy in 1958 and was elected a fellow of Newnham College in 1962. In 1965 she assumed the position of full professor and fellow of Girton College. In 1979, just four years before she died, she became the first female honorary fellow of King's College | https://en.wikipedia.org/wiki?curid=752599 |
Joan Robinson As a member of "the Cambridge School" of economics, Robinson contributed to the support and exposition of Keynes' General Theory, writing especially on its employment implications in 1936 and 1937 (it attempted to explain employment dynamics in the midst of the Great Depression). In 1933 her book "The Economics of Imperfect Competition", Robinson coined the term "monopsony," which is used to describe the buyer converse of a seller monopoly. Monopsony is commonly applied to buyers of labour, where the employer has wage setting power that allows it to exercise Pigouvian exploitation and pay workers less than their marginal productivity. Robinson used monopsony to describe the wage gap between women and men workers of equal productivity. In 1942 Robinson's "An Essay on Marxian Economics" famously concentrated on Karl Marx as an economist, helping to revive the debate on this aspect of his legacy. In 1956 Robinson published her magnum opus, "The Accumulation of Capital", which extended Keynesianism into the long-run. In 1962 she published "Essays in the Theory of Economic Growth", another book on growth theory, which discussed Golden Age growth paths. Afterwards she developed the Cambridge growth theory with Nicholas Kaldor. She was elected a Foreign Honorary Member of the American Academy of Arts and Sciences in 1964. Near the end of her life she studied and concentrated on methodological problems in economics and tried to recover the original message of Keynes' General Theory | https://en.wikipedia.org/wiki?curid=752599 |
Joan Robinson Between 1962 and 1980 she wrote many economics books for the general public. Robinson suggested developing an alternative to the revival of classical economics. "The Cultural Revolution in China" is written from the perspective of trying to understand the thinking that lay behind the revolution, particularly Mao Zedong's preoccupations. Mao is seen as aiming to recapture a revolutionary sense in a population that had known only, or had grown used to, stable Communism, so that it could "re-educate the Party" (pp. 20, 27); to instill a realisation that the people needed the guidance of the Party and much as the other way round (p. 20); to re-educate intellectuals who failed to see that their role in society, like that of all other groups, was to 'Serve the People' (pp. 33, 43); and finally to secure a succession, not stage-managed by the Party hierarchy or even by Mao himself but the product of interaction between a revitalised people and a revitalised Party (p. 26). On the whole, the book emphasises the positive aspects of Mao's "moderate and humane" intentions (p. 19) rather than the "violence and disorder" that broke out, we are told, "from time to time", occurrences "strongly opposed" (ibid.) to Mao's wishes | https://en.wikipedia.org/wiki?curid=752599 |
Joan Robinson Robinson recognises and appears to endorse a revision to classical Marxism in Mao's view of the relation of base to superstructure: "On the classical view, there is one-way determination between base and superstructure but Mao shows how the superstructure may react upon the base: Ideas may become a material force" (p. 12). She acknowledges that "Old-fashioned Marxists might regard this as a heresy, but that is scarcely reasonable" (ibid.). In June 2019, the United States Supreme Court used Robinson's monopsony theory in its decision for "Apple vs Pepper". Justice Brett Kavanaugh delivered the majority opinion, stating Apple can be sued by application developers, "on a monopsony theory." In 1948 she was appointed the first economist member of the Monopolies and Mergers Commission. In 1949 she was invited by Ragnar Frisch to become the Vice-President of the Econometric Society but declined by saying she that could not be part of the editorial committee of a journal that she could not read. During the 1960s, she was a major participant in the Cambridge capital controversy alongside Piero Sraffa. At least two students who studied under her have won the Nobel Prize in Economic Sciences: Amartya Sen and Joseph Stiglitz. In his autobiographical notes for the Nobel Foundation, Stiglitz described their relationship as "tumultuous" and Robinson as unused to "the kind of questioning stance of a brash American student"; after a term, Stiglitz therefore "switched to Frank Hahn" | https://en.wikipedia.org/wiki?curid=752599 |
Joan Robinson In his own autobiography notes, Sen described Robinson as "totally brilliant but vigorously intolerant." She also influenced Prime Minister Manmohan Singh which altered his approach towards economic policies. Joan's father was Frederick Barton Maurice, her mother was Margaret Helen Marsh. Joan Maurice married fellow economist Austin Robinson in 1926. They had two daughters. The distinguished London surgeon and Cambridge academic Howard Marsh was Joan Robinson's maternal grandfather. In 2016 the Council of the University of Cambridge approved the use of Robinson's name to mark a physical feature within the North West Cambridge Development. | https://en.wikipedia.org/wiki?curid=752599 |
American system of watch manufacturing The is a set of manufacturing techniques and best-practices to be used in the manufacture of watches and timepieces. It is derived from the American system of manufacturing techniques (also called "armory practices"), a set of general techniques and guidelines for manufacturing that was developed in the 19th century. The system calls for using interchangeable parts, which is made possible by a strict system of organization, the extensive use of the machine shop, and quality control systems utilizing gauges to ensure precise and uniform dimensions. It was developed by Aaron Lufkin Dennison, a watch repairman who was inspired by the manufacturing techniques of the United States Armory at Springfield, Massachusetts, which manufactured identical parts, allowing rapid assembly of the final products. He proposed using similar techniques for the manufacture of watches. Before the was developed, watchmaking was primarily a European business. It involved making certain parts under the roof of a factory while obtaining other parts from piece workers who used their own cottages as workshops. Henry Pitkin and his brother James were jewelry makers in Hartford, Connecticut in the mid-1830s before their business failed as a result of the panic of 1837 and they turned their attention to the manufacture of watches. The brothers were able to construct crude machinery for the production of watches, particularly for the manufacture of pallets | https://en.wikipedia.org/wiki?curid=758111 |
American system of watch manufacturing Their first complete movement was completed in 1838; a total of between 800 and 900 watches were completed through 1845. Surviving examples of Pitkin watches showed that the parts were, in fact, interchangeable. In 1850 Aaron Dennison partnered with Edward Howard, a reputable clockmaker. The two formed plans to construct a line of watches with interchangeable parts based on Dennison’s visit to the Springfield armory. They built a factory in Roxbury, with financial backing provided by Samuel Curtis and DP Davis (a partner of Howard in his clock business). This company initially operated under the name American Horologe Company but was quickly changed to the Warren Manufacturing Company to hide its purpose from foreign suppliers. The company’s initial focus was on the production of an 8-day watch, though this proved to be too expensive and not very accurate. Instead, the attention was turned to a 30-hour watch designed very similarly to what ultimately became the standard for an American 18 size watch. The first such watch was completed in 1852; it carried the serial number of 18, and was marked "Warren." Approximately 80 "Warren" watches were produced, followed by about 900 marked "Samuel Curtis", and a further 4000 marked "Dennison, Howard, and Davis". The factory was moved to Waltham, Massachusetts around 1857 and named the Waltham Watch Company. The basic design of this watch was used for several years as the 1857 model Waltham | https://en.wikipedia.org/wiki?curid=758111 |
American system of watch manufacturing Applying armory practices to the manufacturing of watches carried both opportunity and risk for the Waltham Watch Company. The generally high price of watches allowed for a large investment in research and development, which was aimed toward the reduction of labor costs. At the time, labor costs were a major factor contributing to the high cost of watches; any system that significantly reduced labor costs would provide a substantial increase in profit. Substantial reduction in labor costs proved elusive, however. In 1910, after 40 years of manufacturing improvements, labor still accounted for 80% of the cost of watches, based on data from the Elgin National Watch Company. Watches require very strict production tolerances and very few manufacturing defects, making labor cost reduction difficult. Other products made via armory practices, such as firearms and sewing machines, generally have much looser tolerances than are necessary for watchmaking, which involves numerous tiny gears that must fit together precisely. The intent of applying armory practices to watchmaking was to emphasize tight tolerances in the manufacturing of the component parts, so that final assembly could be done by lesser-skilled workers without the need for an expert watchmaker to personally oversee each step of manufacture. In order to achieve strict tolerances, watch manufacturers largely manufactured their own machine tools and machine parts. Elgin, for example, manufactured almost two drill bits for each watch it manufactured | https://en.wikipedia.org/wiki?curid=758111 |
American system of watch manufacturing The knowledge of how to manufacture machines that could manufacture watches spread: from Waltham to Elgin and then to dozens of other American watch companies and manufacturers of other products. Techniques such as jigs, stops, and measuring devices on machines were not just refined, but other techniques were also developed. Statistical methods of parts classification was one example used to reduce waste. If a gear staff (axle) and a jewel bearing hole were designed to be a given size, then the parts that most closely met those design goals were used in the highest grade watches. Accordingly, staffs that were too large would be matched to watch jewels with holes that were too large, and together they would be used on lower grade watches. | https://en.wikipedia.org/wiki?curid=758111 |
Marginal product In economics and in particular neoclassical economics, the marginal product or marginal physical productivity of an input (factor of production) is the change in output resulting from employing one more unit of a particular input (for instance, the change in output when a firm's labor is increased from five to six units), assuming that the quantities of other inputs are kept constant. The marginal product of a given input can be expressed as: where formula_2 is the change in the firm's use of the input (conventionally a one-unit change) and formula_3 is the change in quantity of output produced (resulting from the change in the input). Note that the quantity formula_4 of the "product" is typically defined ignoring external costs and benefits. If the output and the input are infinitely divisible, so the marginal "units" are infinitesimal, the marginal product is the mathematical derivative of the production function with respect to that input. Suppose a firm's output "Y" is given by the production function: where "K" and "L" are inputs to production (say, capital and labor). Then the marginal product of capital ("MPK") and marginal product of labor ("MPL") are given by: In the "law" of diminishing marginal returns, the marginal product initially increases when more of an input (say labor) is employed, keeping the other input (say capital) constant. Here, labor is the variable input and capital is the fixed input (in a hypothetical two-inputs model) | https://en.wikipedia.org/wiki?curid=762043 |
Marginal product As more and more of variable input (labor) is employed, marginal product starts to fall. Finally, after a certain point, the marginal product becomes negative, implying that the additional unit of labor has "decreased" the output, rather than increasing it. The reason behind this is the diminishing marginal productivity of labor. The marginal product of labor is the slope of the total product curve, which is the production function plotted against labor usage for a fixed level of usage of the capital input. In the neoclassical theory of competitive markets, the marginal product of labor equals the real wage. In aggregate models of perfect competition, in which a single good is produced and that good is used both in consumption and as a capital good, the marginal product of capital equals its rate of return. As was shown in the Cambridge capital controversy, this proposition about the marginal product of capital cannot generally be sustained in multi-commodity models in which capital and consumption goods are distinguished. Relationship of marginal product (MPP) with the total product (TPP) The relationship can be explained in three phases- (1) Initially, as the quantity of variable input is increased, TPP rises at an increasing rate. In this phase, MPP also rises. (2) As more and more quantities of the variable inputs are employed, TPP increases at a diminishing rate. In this phase, MPP starts to fall. (3) When the TPP reaches its maximum, MPP is zero | https://en.wikipedia.org/wiki?curid=762043 |
Marginal product Beyond this point, TPP starts to fall and MPP becomes negative. | https://en.wikipedia.org/wiki?curid=762043 |
Diminishing returns In economics, diminishing returns is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant. The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant (""ceteris paribus""), will at some point yield lower incremental per-unit returns. The law of diminishing returns does not imply that adding more of a factor will decrease the "total" production, a condition known as negative returns, though in fact this is common. A common example is adding more people to a job, such as the assembly of a car on a factory floor. At some point, adding more workers causes problems such as workers getting in each other's way or frequently finding themselves waiting for access to a part. In all of these processes, producing one more unit of output per unit of time will eventually require increasingly more usage of the input, due to the input being used less effectively. Another well-studied example is throwing more headcount at software development, yielding Brooks's law. The law of diminishing returns is a fundamental principle of economics. It plays a central role in production theory | https://en.wikipedia.org/wiki?curid=762048 |
Diminishing returns The concept of diminishing returns can be traced back to the concerns of early economists such as Johann Heinrich von Thünen, Jacques Turgot, Adam Smith, James Steuart, Thomas Robert Malthus, and David Ricardo. However, classical economists such as Malthus and Ricardo attributed the successive diminishment of output to the decreasing quality of the inputs. Neoclassical economists assume that each "unit" of labor is identical. are due to the disruption of the entire productive process as additional units of labor are added to a fixed amount of capital. The law of diminishing returns remains an important consideration in farming. An example is a factory that has a fixed stock of capital, or tools and machines, and a variable supply of labor. As the firm increases the number of workers, the total output of the firm grows but at an ever-decreasing rate. This is because after a certain point, the factory becomes overcrowded and workers begin to form lines to use the machines. The long-run solution to this problem is to increase the stock of capital, that is, to buy more machines and to build more factories. There is an inverse relationship between returns of inputs and the cost of production, although other features such as input market conditions can also affect production costs. Suppose that a kilogram of seed costs one dollar, and this price does not change. Assume for simplicity that there are no fixed costs. One kilogram of seeds yields one ton of crop, so the first ton of the crop costs one dollar to produce | https://en.wikipedia.org/wiki?curid=762048 |
Diminishing returns That is, for the first ton of output, the marginal cost as well as the average cost of the output is $1 per ton. If there are no other changes, then if the second kilogram of seeds applied to land produces only half the output of the first (showing diminishing returns), the marginal cost would equal $1 per half ton of output, or $2 per ton, and the average cost is $2 per 3/2 tons of output, or $4/3 per ton of output. Similarly, if the third kilogram of seeds yields only a quarter ton, then the marginal cost equals $1 per quarter ton or $4 per ton, and the average cost is $3 per 7/4 tons, or $12/7 per ton of output. Thus, diminishing marginal returns imply increasing marginal costs and increasing average costs. Cost is measured in terms of opportunity cost. In this case the law also applies to societies – the opportunity cost of producing a single unit of a good generally increases as a society attempts to produce more of that good. This explains the bowed-out shape of the production possibilities frontier. | https://en.wikipedia.org/wiki?curid=762048 |
Self-ownership Self-ownership, also known as sovereignty of the individual or individual sovereignty, is the concept of property in one's own person, expressed as the moral or natural right of a person to have bodily integrity and be the exclusive controller of one's own body and life. is a central idea in several political philosophies that emphasize individualism, such as libertarianism, liberalism, and anarchism. Discussion of the boundary of self with respect to ownership and responsibility has been explored by legal scholar Meir Dan-Cohen in his essays on "The Value of Ownership" and "Responsibility and the Boundaries of the Self". The emphasis of this work illuminates the phenomenology of ownership and our common usage of personal pronouns to apply to both body and property—this serves as the folk basis for legal conceptions and debates about responsibility and ownership. Another view holds that labor is alienable because it can be contracted out, thus alienating it from the self. In this view, the choice of a person to voluntarily sell oneself into slavery is also preserved by the principle of self-ownership. For anarcho-socialist political philosopher L. Susan Brown: "Liberalism and anarchism are two political philosophies that are fundamentally concerned with individual freedom yet differ from one another in very distinct ways. Anarchism shares with liberalism a commitment to individual freedom while rejecting liberalism's competitive property relations" | https://en.wikipedia.org/wiki?curid=766834 |
Self-ownership Scholar Ellen Meiksins Wood says that "there are doctrines of individualism that are opposed to Lockean individualism... and non-Lockean individualism may encompass socialism". Libertarian capitalist conceptions of self-ownership extend the concept to include control of private property as part of the self. According to Gerald Cohen, "the libertarian principle of self–ownership says that each person enjoys, over himself and his powers, full and exclusive rights of control and use, and therefore owes no service or product to anyone else that he has not contracted to supply". Philosopher Ian Shapiro says that labor markets affirm self-ownership because if self-ownership were not recognized, then people would not be allowed to sell the use of their productive capacities to others. He says that the individual sells the use of his productive capacity for a limited time and conditions but continues to own what he earns from selling the use of that capacity and the capacity itself, thereby retaining sovereignty over himself while contributing to economic efficiency. A common view within classical liberalism is that sovereign-minded individuals usually assert a right of private property external to the body, reasoning that if a person owns themselves, they own their actions, including those that create or improve resources, therefore they own their own labour and the fruits thereof | https://en.wikipedia.org/wiki?curid=766834 |
Self-ownership In "Human Action", Austrian School economist Ludwig von Mises argues that labor markets are the rational conclusion of self-ownership and argues that collective ownership of labor ignores differing values for the labor of individuals: Of course, people believe that there is an essential difference between the tasks incumbent upon the comrades of the socialist commonwealth and those incumbent upon slaves or serfs. The slaves and serfs, they say, toiled for the benefit of an exploiting lord. But in a socialist system the produce of labor goes to society of which the toiler himself is a part; here the worker works for himself, as it were. What this reasoning overlooks is that the identification of the individual comrades and the totality of all comrades with the collective entity pocketing the produce of all work is merely fictitious. Whether the ends which the community's officeholders are aiming at agree or disagree with the wishes and desires of the various comrades, is of minor importance. The main thing is that the individual's contribution to the collective entity's wealth is not requited in the shape of wages determined by the market. Nevertheless, there can be defense of self-ownership which can be critical of the idea of private property, specifically within the socialist branch of anarchism. The anarchist Oscar Wilde said: For the recognition of private property has really harmed Individualism, and obscured it, by confusing a man with what he possesses. It has led Individualism entirely astray | https://en.wikipedia.org/wiki?curid=766834 |
Self-ownership It has made gain not growth its aim. So that man thought that the important thing was to have, and did not know that the important thing is to be. The true perfection of man lies, not in what man has, but in what man is...With the abolition of private property, then, we shall have true, beautiful, healthy Individualism. Nobody will waste his life in accumulating things, and the symbols for things. One will live. To live is the rarest thing in the world. Most people exist, that is all". Within anarchism, the concept of wage slavery refers to a situation perceived as quasi-voluntary slavery, where a person's livelihood depends on wages, especially when the dependence is total and immediate. It is a negatively connoted term used to draw an analogy between slavery and wage labor by focusing on similarities between owning and renting a person. The term "wage slavery" has been used to criticize economic exploitation and social stratification, with the former seen primarily as unequal bargaining power between labor and capital (particularly when workers are paid comparatively low wages, e.g. in sweatshops) and the latter as a lack of workers' self-management, fulfilling job choices and leisure in an economy. With the advent of the Industrial Revolution, thinkers such as Pierre-Joseph Proudhon and Karl Marx elaborated the comparison between wage labor and slavery in the context of a critique of societal property not intended for active personal use while Luddites emphasized the dehumanization brought about by machines | https://en.wikipedia.org/wiki?curid=766834 |
Self-ownership Emma Goldman famously denounced "wage slavery" by saying: "The only difference is that you are hired slaves instead of block slaves". Within left-libertarianism, scholars such as Hillel Steiner, Peter Vallentyne, Philippe Van Parijs, Michael Otsuka and David Ellerman root an economic egalitarianism in the classical liberal concepts of self-ownership and land appropriation, combined with geoist or physiocratic views regarding the ownership of land and natural resources (e.g. those of John Locke and Henry George). Left-libertarians "maintain that the world's natural resources were initially unowned, or belonged equally to all, and it is illegitimate for anyone to claim exclusive private ownership of these resources to the detriment of others. Such private appropriation is legitimate only if everyone can appropriate an equal amount, or if those who appropriate more are taxed to compensate those who are thereby excluded from what was once common property". This position is articulated in contrast to the position of other libertarians who argue for a right to appropriate parts of the external world based on sufficient use, even if this homesteading yields unequal results. Some left-libertarians of the Steiner–Vallentyne type support some form of income redistribution on the grounds of a claim by each individual to be entitled to an equal share of natural resources. John Locke wrote in his "Two Treatises on Government" that "every man has a Property in his own Person" | https://en.wikipedia.org/wiki?curid=766834 |
Self-ownership Locke also said that the individual "has a right to decide what would become of himself and what he would do, and as having a right to reap the benefits of what he did". Josiah Warren was the first who wrote about the "sovereignty of the individual". | https://en.wikipedia.org/wiki?curid=766834 |
Penalty interest In money lending and in sales contracts, penalty interest, also called penalty APR (penalty annual percentage rate), default interest, interest for/on late payment, statutory interest for/on late payment, interest on arrears, or penal interest, is punitive interest charged by a lender to a borrower if installments are not paid according to the loan terms. If an installment is not received according to the repayment terms, sometimes if not received by the end of the month, the borrower/buyer is charged penalty interest on the delayed installment/payment. | https://en.wikipedia.org/wiki?curid=770350 |
Agorism is a social philosophy that advocates creating a society in which all relations between people are voluntary exchanges by means of counter-economics, engaging with aspects of peaceful revolution. It was first proposed by American libertarian philosopher Samuel Edward Konkin III (1947–2004) at two conferences, CounterCon I in October 1974 and CounterCon II in May 1975. The term was coined by Samuel Edward Konkin III and comes from the word "agora" (), referring to an open place for assembly and market in a "polis" (; city-state). According to Konkin, agorism and counter-economics were originally fighting concepts forged in the revolutionary atmosphere of 1972 and 1973. Konkin credits the Austrian School and particularly Ludwig von Mises as the base of economic thought leading to agorism and counter-economics. In the 1960–1970s, there was an abundance of political alienation in the United States, particularly for those in favor of libertarian ideologies. Whereas Murray Rothbard chose to create political alliances between the Old Right and the New Left, Robert LeFevre and his West Coast followers pursued a non-participatory form of civil disobedience. Ultimately, LeFevre's anti-collaboration methods lost favor and faded away. After the creation of the Libertarian Party in 1971, the debate shifted from anarchy vs. minarchism to partyarchy vs. agorism. Konkin characterized agorism as a form of left-libertarianism and generally that agorism is a strategic branch of left-wing market anarchism | https://en.wikipedia.org/wiki?curid=770975 |
Agorism Although this term is non-standard usage, agorists identify as part of left-wing politics in the general sense and use the term left-libertarian as defined by Roderick T. Long, i.e. as "an integration, or I'd argue, a reintegration of libertarianism with concerns that are traditionally thought of as being concerns of the left. That includes concerns for worker empowerment, worry about plutocracy, concerns about feminism and various kinds of social equality". The concept of counter-economics is the most critical element of agorism. It can be described as such: believes gradual withdrawal of state support through what Konkin described as "Profitable Civil Disobedience". Starving the state of its revenue and purpose by transferring these responsibilities over to decentralized institutions is the most feasible way to achieve free markets according to agorism: does not support political engagement in the form of political party promotion as a means to transition to a free-market anarchism. The methods of the Libertarian Party are not compatible with agorist principles. Konkin referred to these attempts to fight for free markets through state approved channels of operation as "partyarchy": As with voluntaryists, agorists typically oppose electoral voting and political reform and instead they stress the importance of alternative strategies outside political systems to achieve a free society | https://en.wikipedia.org/wiki?curid=770975 |
Agorism Agorists claim that such a society could be freed more readily by employing methods such as education, direct action, alternative currencies, entrepreneurship, self sufficiency, civil disobedience and counter-economics. Konkin developed a class theory which includes entrepreneurs, non-statist capitalists and statist capitalist: Konkin claimed that while agorists see these three classes differently, anarcho-capitalists tend to conflate the first and second types while "Marxoids and cruder collectivists" conflate all three. The agorists prefer the term "free market" to "capitalism", mostly because it bears no ties to the implications the latter term has in history. The term "capitalism" originally referred to mercantilism, the use of public chartering and corporations to let the political class dominate and plunder important industries. It was first used by Louis Blanc in "Organisation du Travail" (1851), later in 1861 by anarchist Pierre Proudhon and notably making it popular in 1867 by Karl Marx in a more specific sense to refer to control of industry by the political class. It only later came to be conflated with actual free markets. The favoritism of the government towards determined corporations is seen by agorists as the characteristic that renders much more illegitimate the intervention of the state in various sectors. According to agorists, state-imposed restrictions in favor of certain companies distort the market, making the aforementioned businesses less responsible and less capable | https://en.wikipedia.org/wiki?curid=770975 |
Agorism The agorists claim that the debts of businesses cannot be cleared through a government's decree and that every manager has to be responsible for every act taken. Konkin opposed the concept of intellectual property and wrote in an article entitled "Copywrongs" in support of such a thesis. J. Neil Schulman criticized this thesis in "Informational Property: Logorights". Whereas Konkin was opposed to the laws of the state in the cases of patents and copyright, seen as creators of monopolies and distortion, Schulman agreed with Konkin that the state could not be a foundation for any class of rightful property yet sought to demonstrate that exclusive ownership rights could apply to what he ultimately termed "Media Carried Property"—created objects that exist independent of the subjective human mind yet are not themselves made of atoms or molecules. Konkin's treatise "New Libertarian Manifesto" was published in 1980. Previously, the philosophy had been presented in J. Neil Schulman's science fiction novel "Alongside Night" in 1979. Ayn Rand's example, presenting her ideas in the form of a work of fiction in "Atlas Shrugged", had inspired Schulman to do likewise. Konkin's afterword to the novel, "How Far Alongside Night?", credited Schulman with integrating the "science of counter-economics" with Konkin's basic economic philosophy. J. Neil Schulman adapted "Alongside Night" as a feature film released in 2014 as "J. Neil Schulman's Alongside Night The Graphic Novel" and as an unabridged audiobook. | https://en.wikipedia.org/wiki?curid=770975 |
Super-iron battery The is a moniker for a proposed class of rechargeable electric battery. Such batteries feature cathodes composed of ferrate salts, either potassium ferrate () or barium ferrate (). One attraction to the proposed device is that the spent cathode would consist of a rust-like material, which is preferable to batteries based on cadmium, manganese and nickel. | https://en.wikipedia.org/wiki?curid=772301 |
Social planner In welfare economics, a social planner is a decision-maker who attempts to achieve the best result for all parties involved. In neo-classical welfare economics, this means the maximization of a social welfare function. In modern welfare economics, there is a greater emphasis on Pareto optimality, in which no one's economic status can be improved without worsening someone else's. Pareto-optimal solutions are not unique, and according to the Second Fundamental Theorem of Welfare Economics, a social planner can achieve any Pareto-optimal outcome by an appropriate redistribution of wealth by means of competitive market. In practice, the social planner role is generally played by a government entity. However, real governments have multiple goals in addition to, or instead of the benefit of their people. This problem is studied in public choice economics. The close connection that exists between the social planning problem and the competitive equilibrium."The first welfare theorem" tells us that if an allocation and a set of prices constitute a competitive equilibrium, then the allocation ·will be Pareto efficient . This tells us that the competitive equilibrium is efficient; the only option we have is to redistribute endowments in order to achieve a different point on the contract curve, but there is noting more we can do. "The second welfare theorem", tells us that any social planning problem can be decentralized as a competitive equilibrium | https://en.wikipedia.org/wiki?curid=773434 |
Social planner The welfare theorems establish a connection between the competitive equilibrium and the social planning problem. The welfare theorems also have practical implications. Instead of looking at a decentralized exchange process, let the economy assume the existence of a benevolent social planner who makes all the decisions in the economy. The social planner is benevolent because he only cares about the welfare of the consumer. Therefore, instead of having prices to guide the economy to equilibrium, it is allowed the social planner to decide how the consumer's time will be allocated between leisure and labor. The only constraints the planner faces are the consumer's time endowment and the state of technology. Obviously, the social planning problem gives us the highest possible utility level for the consumer. It is assumed, in particular, that information is costless and readily available to the social planner. The benevolent social planner solves: "max u(c,R) s.t. c = f(l)" "l + R = T" We can observe the absence of the planning problem. The planning problem is an assignement or allocation problem that arises because the consumer faces a tradeoff in the way he allocates his time. It is important to notice that time, in the form of leisure gives direct utility, but that consumption of leisure leaves less time for labor and, therefore, reduces the agent's consumption opportunities. In other words, the opportunity cost of leisure is foregone consumption | https://en.wikipedia.org/wiki?curid=773434 |
Social planner The planner looks for the best way to allocate the consumer's time endowment by balancing labor and leisure. Best means that the planner maximizes the consumer's utility function. In this problem, best is unambiguous. However, when there are more that two agents the planners allocation will depend on what the welfare function that is used. The benevolent social planner is an all-knowing, all-powerful, well-intentioned dictator. The planner wants to maximize the economic well-being of everyone in society. What should this planner do? Should he just leave buyers and sellers at the equilibrium that they reach naturally on their own? Or can he increase economic well-being by altering the market outcome in some way?" To answer this question, the planner must first decide how to measure the economic well-being of a society. One possible measure is the sum of consumer and producer surplus, which is called total surplus. Consumer surplus is the benefit that buyers receive from participating in a market, and producer surplus is the benefit that sellers receive. It is therefore natural to use total surplus as a measure of society's economic well-being. This is professional planning work in the areas of social services planning and/or city-wide recreation planning in a multidisciplinary team environment | https://en.wikipedia.org/wiki?curid=773434 |
Social planner Employees of this class are responsible for providing community based agencies with social consultative and monitoring services as it relates to the development and administration of preventive social services programs or low income and social housing, and/or conducting socioeconomic evaluations, planning and developing innovative strategies for city-wide social and. Working as social planner has an emphasis on the development of social policy documents and the management of preventive social service funding programs based on the results of community needs assessments and evaluation studies. Work involves collaboration and partnership with diverse community groups. Employees work with considerable independence and initiative in the funding, consultation and implementation of service initiatives consistent with municipal priorities and/or provincial requirements. Work involves the effective long-range planning and co-ordination of programs and projects to meet the social needs and aspirations of community services provided throughout the city. Incumbents may be required to act as a Project/Team Leader or Contract Manager and provide advice and direction to consultants or other professional staff. Work can be performed under strategic guidance; results can be evaluated through consultation with a superior for conformance with municipal policy and procedures, and through the implementation of reports and recommendations. | https://en.wikipedia.org/wiki?curid=773434 |
Evolutionary game theory (EGT) is the application of game theory to evolving populations in biology. It defines a framework of contests, strategies, and analytics into which Darwinian competition can be modelled. It originated in 1973 with John Maynard Smith and George R. Price's formalisation of contests, analysed as strategies, and the mathematical criteria that can be used to predict the results of competing strategies. differs from classical game theory in focusing more on the dynamics of strategy change. This is influenced by the frequency of the competing strategies in the population. has helped to explain the basis of altruistic behaviours in Darwinian evolution. It has in turn become of interest to economists, sociologists, anthropologists, and philosophers. Classical non-cooperative game theory was conceived by John von Neumann to determine optimal strategies in competitions between adversaries. A contest involves players, all of whom have a choice of moves. Games can be a single round or repetitive. The approach a player takes in making his moves constitutes his strategy. Rules govern the outcome for the moves taken by the players, and outcomes produce payoffs for the players; rules and resulting payoffs can be expressed as decision trees or in a payoff matrix. Classical theory requires the players to make rational choices. Each player must consider the strategic analysis that his opponents are making to make his own choice of moves | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory started with the problem of how to explain ritualized animal behaviour in a conflict situation; "why are animals so 'gentlemanly or ladylike' in contests for resources?" The leading ethologists Niko Tinbergen and Konrad Lorenz proposed that such behaviour exists for the benefit of the species. John Maynard Smith considered that incompatible with Darwinian thought, where selection occurs at an individual level, so self-interest is rewarded while seeking the common good is not. Maynard Smith, a mathematical biologist, turned to game theory as suggested by George Price, though Richard Lewontin's attempts to use the theory had failed. Maynard Smith realised that an evolutionary version of game theory does not require players to act rationally —– only that they have a strategy. The results of a game shows how good that strategy was, just as evolution tests alternative strategies for the ability to survive and reproduce. In biology, strategies are genetically inherited traits that control an individual's action, analogous with computer programs. The success of a strategy is determined by how good the strategy is in the presence of competing strategies (including itself), and of the frequency with which those strategies are used. Maynard Smith described his work in his book "Evolution and the Theory of Games". Participants aim to produce as many replicas of themselves as they can, and the payoff is in units of fitness (relative worth in being able to reproduce). It is always a multi-player game with many competitors | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Rules include replicator dynamics, in other words how the fitter players will spawn more replicas of themselves into the population and how the less fit will be culled, in a replicator equation. The replicator dynamics models heredity but not mutation, and assumes asexual reproduction for the sake of simplicity. Games are run repetitively with no terminating conditions. Results include the dynamics of changes in the population, the success of strategies, and any equilibrium states reached. Unlike in classical game theory, players do not choose their strategy and cannot change it: they are born with a strategy and their offspring inherit that same strategy. encompasses Darwinian evolution, including competition (the game), natural selection (replicator dynamics), and heredity. has contributed to the understanding of group selection, sexual selection, altruism, parental care, co-evolution, and ecological dynamics. Many counter-intuitive situations in these areas have been put on a firm mathematical footing by the use of these models. The common way to study the evolutionary dynamics in games is through replicator equations. These show the growth rate of the proportion of organisms using a certain strategy and that rate is equal to the difference between the average payoff of that strategy and the average payoff of the population as a whole. Continuous replicator equations assume infinite populations, continuous time, complete mixing and that strategies breed true | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory The attractors (stable fixed points) of the equations are equivalent with evolutionarily stable states. A strategy which can survive all "mutant" strategies is considered evolutionarily stable. In the context of animal behavior, this usually means such strategies are programmed and heavily influenced by genetics, thus making any player or organism's strategy determined by these biological factors. Evolutionary games are mathematical objects with different rules, payoffs, and mathematical behaviours. Each "game" represents different problems that organisms have to deal with, and the strategies they might adopt to survive and reproduce. Evolutionary games are often given colourful names and cover stories which describe the general situation of a particular game. Representative games include hawk-dove, war of attrition, stag hunt, producer-scrounger, tragedy of the commons, and prisoner's dilemma. Strategies for these games include Hawk, Dove, Bourgeois, Prober, Defector, Assessor, and Retaliator. The various strategies compete under the particular game's rules, and the mathematics are used to determine the results and behaviours. The first game that Maynard Smith analysed is the classic Hawk Dove game. It was conceived to analyse Lorenz and Tinbergen's problem, a contest over a shareable resource. The contestants can be either Hawk or Dove. These are two subtypes or morphs of one species with different strategies | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory The Hawk first displays aggression, then escalates into a fight until it either wins or is injured (loses). The Dove first displays aggression, but if faced with major escalation runs for safety. If not faced with such escalation, the Dove attempts to share the resource. Given that the resource is given the value V, the damage from losing a fight is given cost C: The actual payoff however depends on the probability of meeting a Hawk or Dove, which in turn is a representation of the percentage of Hawks and Doves in the population when a particular contest takes place. That in turn is determined by the results of all of the previous contests. If the cost of losing C is greater than the value of winning V (the normal situation in the natural world) the mathematics ends in an ESS, a mix of the two strategies where the population of Hawks is V/C. The population regresses to this equilibrium point if any new Hawks or Doves make a temporary perturbation in the population. The solution of the Hawk Dove Game explains why most animal contests involve only ritual fighting behaviours in contests rather than outright battles. The result does not at all depend on good of the species behaviours as suggested by Lorenz, but solely on the implication of actions of so-called selfish genes. In the Hawk Dove game the resource is shareable, which gives payoffs to both Doves meeting in a pairwise contest | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Where the resource is not shareable, but an alternative resource might be available by backing off and trying elsewhere, pure Hawk or Dove strategies are less effective. If an unshareable resource is combined with a high cost of losing a contest (injury or possible death) both Hawk and Dove payoffs are further diminished. A safer strategy of lower cost display, bluffing and waiting to win, is then viable – a Bluffer strategy. The game then becomes one of accumulating costs, either the costs of displaying or the costs of prolonged unresolved engagement. It is effectively an auction; the winner is the contestant who will swallow the greater cost while the loser gets the same cost as the winner but no resource. The resulting evolutionary game theory mathematics leads to an optimal strategy of timed bluffing. This is because in the war of attrition any strategy that is unwavering and predictable is unstable, because it will ultimately be displaced by a mutant strategy which relies on the fact that it can best the existing predictable strategy by investing an extra small delta of waiting resource to ensure that it wins. Therefore, only a random unpredictable strategy can maintain itself in a population of Bluffers. The contestants in effect choose an acceptable cost to be incurred related to the value of the resource being sought, effectively making a random bid as part of a mixed strategy (a strategy where a contestant has several, or even many, possible actions in his strategy) | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory This implements a distribution of bids for a resource of specific value V, where the bid for any specific contest is chosen at random from that distribution. The distribution (an ESS) can be computed using the Bishop-Cannings theorem, which holds true for any mixed strategy ESS. The distribution function in these contests was determined by Parker and Thompson to be: The result is that the cumulative population of quitters for any particular cost m in this "mixed strategy" solution is: as shown in the adjacent graph. The intuitive sense that greater values of resource sought leads to greater waiting times is borne out. This is observed in nature, as in male dung flies contesting for mating sites, where the timing of disengagement in contests is as predicted by evolutionary theory mathematics. In the War of Attrition there must be nothing that signals the size of a bid to an opponent, otherwise the opponent can use the cue in an effective counter-strategy. There is however a mutant strategy which can better a Bluffer in the War of Attrition Game if a suitable asymmetry exists, the Bourgeois strategy. Bourgeois uses an asymmetry of some sort to break the deadlock. In nature one such asymmetry is possession of a resource. The strategy is to play a Hawk if in possession of the resource, but to display then retreat if not in possession. This requires greater cognitive capability than Hawk, but Bourgeois is common in many animal contests, such as in contests among mantis shrimps and among speckled wood butterflies | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Games like Hawk Dove and War of Attrition represent pure competition between individuals and have no attendant social elements. Where social influences apply, competitors have four possible alternatives for strategic interaction. This is shown on the adjacent figure, where a plus sign represents a benefit and a minus sign represents a cost. At first glance it may appear that the contestants of evolutionary games are the individuals present in each generation who directly participate in the game. But individuals live only through one game cycle, and instead it is the strategies that really contest with one another over the duration of these many-generation games. So it is ultimately genes that play out a full contest – selfish genes of strategy. The contesting genes are present in an individual and to a degree in all of the individual's kin. This can sometimes profoundly affect which strategies survive, especially with issues of cooperation and defection. William Hamilton, known for his theory of kin selection, explored many of these cases using game theoretic models. Kin related treatment of game contests helps to explain many aspects of the behaviour of social insects, the altruistic behaviour in parent/offspring interactions, mutual protection behaviours, and co-operative care of offspring. For such games Hamilton defined an extended form of fitness – inclusive fitness, which includes an individual's offspring as well as any offspring equivalents found in kin | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Hamilton went beyond kin relatedness to work with Robert Axelrod, analysing games of co-operation under conditions not involving kin where reciprocal altruism comes into play. Eusocial insect workers forfeit reproductive rights to their queen. It has been suggested that Kin Selection, based on the genetic makeup of these workers, may predispose them to altruistic behaviour. Most eusocial insect societies have haplodiploid sexual determination, which means that workers are unusually closely related. This explanation of insect eusociality has however been challenged by a few highly noted evolutionary game theorists (Nowak and Wilson) who have published a controversial alternative game theoretic explanation based on a sequential development and group selection effects proposed for these insect species. A difficulty of the theory of evolution, recognised by Darwin himself, was the problem of altruism. If the basis for selection is at individual level, altruism makes no sense at all. But universal selection at the group level (for the good of the species, not the individual) fails to pass the test of the mathematics of game theory and is certainly not the general case in nature. Yet in many social animals, altruistic behaviour exists. The solution to this paradox can be found in the application of evolutionary game theory to the prisoner's dilemma game – a game which tests the payoffs of cooperating or in defecting from cooperation. It is certainly the most studied game in all of game theory | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory The analysis of prisoner's dilemma is as a repetitive game. This affords competitors the possibility of retaliating for defection in previous rounds of the game. Many strategies have been tested; the best competitive strategies are general cooperation with a reserved retaliatory response if necessary. The most famous and one of the most successful of these is tit-for-tat with a simple algorithm. procedure tit-for-tat EventBit:=Trust; do while Contest=ON; end; The pay-off for any single round of the game is defined by the pay-off matrix for a single round game (shown in bar chart 1 below). In multi-round games the different choices – Co-operate or Defect – can be made in any particular round, resulting in a certain round payoff. It is, however, the possible accumulated pay-offs over the multiple rounds that count in shaping the overall pay-offs for differing multi-round strategies such as Tit-for-Tat. Example 1: The straightforward single round prisoner's dilemma game. The classic prisoner's dilemma game payoffs gives a player a maximum payoff if he defect and his partner co-operates (this choice is known as temptation). If however the player co-operates and his partner defects, he gets the worst possible result (the suckers payoff). In these payoff conditions the best choice (a Nash equilibrium) is to defect. Example 2: Prisoner's dilemma played repeatedly. The strategy employed is Tit-for-Tat which alters behaviors based on the action taken by a partner in the previous round – i.e | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory reward co-operation and punish defection. The effect of this strategy in accumulated payoff over many rounds is to produce a higher payoff for both players co-operation and a lower payoff for defection. This removes the Temptation to defect. The suckers payoff also becomes less, although "invasion" by a pure defection strategy is not entirely eliminated. Altruism takes place when one individual, at a cost C to itself, exercises a strategy that provides a benefit B to another individual. The cost may consist of a loss of capability or resource which helps in the battle for survival and reproduction, or an added risk to its own survival. Altruism strategies can arise through: The evolutionarily stable strategy (ESS) is akin to Nash equilibrium in classical game theory, but with mathematically extended criteria. Nash Equilibrium is a game equilibrium where it is not rational for any player to deviate from his present strategy, provided that the others adhere to their strategies. An ESS is a state of game dynamics where, in a very large population of competitors, another mutant strategy cannot successfully enter the population to disturb the existing dynamic (which itself depends on the population mix). Therefore, a successful strategy (with an ESS) must be both effective against competitors when it is rare – to enter the previous competing population, and successful when later in high proportion in the population – to defend itself | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory This in turn means that the strategy must be successful when it contends with others exactly like itself. An ESS is not: The ESS state can be solved for by exploring either the dynamics of population change to determine an ESS, or by solving equations for the stable stationary point conditions which define an ESS. For example, in the Hawk Dove Game we can look for whether there is a static population mix condition where the fitness of Doves will be exactly the same as fitness of Hawks (therefore both having equivalent growth rates – a static point). Let the chance of meeting a Hawk=p so therefore the chance of meeting a dove is (1-p) Let WHawk equal the Payoff for Hawk... WHawk=Payoff in the chance of meeting a Dove + Payoff in the chance of meeting a Hawk Taking the PAYOFF MATRIX results and plugging them into the above equation: Similarly for a Dove: so... Equating the two fitnesses, Hawk and Dove ... and solving for p so for this "static point" where the Population Percent is an ESS solves to be ESS="V/C" Similarly, using inequalities, it can be shown that an additional Hawk or Dove mutant entering this ESS state eventually results in less fitness for their kind – both a true Nash and an ESS equilibrium. This example shows that when the risks of contest injury or death (the Cost C) is significantly greater than the potential reward (the benefit value V), the stable population will be mixed between aggressors and doves, and the proportion of doves will exceed that of the aggressors | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory This explains behaviours observed in nature. An evolutionary game that turns out to be a children's game is rock paper scissors. The game is simple – rock beats scissors (blunts it), scissors beats paper (cuts it), and paper beats rock (wraps it up). Anyone who has ever played this simple game knows that it is not sensible to have any favoured play – the opponent will soon notice this and switch to the winning counter-play. The best strategy (a Nash equilibrium) is to play a mixed random game with any of the three plays taken a third of the time. This, in evolutionary game theory terms, is a mixed strategy. But many lifeforms are incapable of mixed behavior – they only exhibit one strategy (known as a pure strategy). If the game is played only with the pure Rock, Paper and Scissors strategies the evolutionary game is dynamically unstable: Rock mutants can enter an all scissor population, but then – Paper mutants can take over an all Rock population, but then – Scissor mutants can take over an all Paper population – and on and on... This is easily seen on the game payoff matrix, where if the paths of mutant invasion are noted, it can be seen that the mutant "invasion paths" form into a loop. This in triggers a cyclic invasion pattern. Rock paper scissors incorporated into an evolutionary game has been used for modelling natural processes in the study of ecology. Using experimental economics methods, scientists have used RPS game to test human social evolutionary dynamical behaviors in laboratory | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory The social cyclic behaviors, predicted by evolutionary game theory, have been observed in various laboratory experiments. The side-blotched lizard ("Uta stansburiana") is polymorphic with three morphs that each pursues a different mating strategy However the blue throats cannot overcome the more aggressive orange throats. The overall situation corresponds to the Rock, Scissors, Paper game, creating a six-year population cycle. When he read that these lizards were essentially engaged in a game with rock-paper-scissors structure, John Maynard Smith is said to have exclaimed "They have read my book!" Aside from the difficulty of explaining how altruism exists in many evolved organisms, Darwin was also bothered by a second conundrum – why do a significant number of species have phenotypical attributes that are patently disadvantageous to them with respect to their survival – and should by the process of natural section be selected against – e.g. the massive inconvenient feather structure found in a peacock's tail? Regarding this issue Darwin wrote to a colleague "The sight of a feather in a peacock's tail, whenever I gaze at it, makes me sick." It is the mathematics of evolutionary game theory, which has not only explained the existence of altruism but also explains the totally counterintuitive existence of the peacock's tail and other such biological encumbrances | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory On analysis, problems of biological life are not at all unlike the problems that define economics – eating (akin to resource acquisition and management), survival (competitive strategy) and reproduction (investment, risk and return). Game theory was originally conceived as a mathematical analysis of economic processes and indeed this is why it has proven so useful in explaining so many biological behaviours. One important further refinement of the evolutionary game theory model that has economic overtones rests on the analysis of costs. A simple model of cost assumes that all competitors suffer the same penalty imposed by the Game costs, but this is not the case. More successful players will be endowed with or will have accumulated a higher "wealth reserve" or "affordability" than less successful players. This wealth effect in evolutionary game theory is represented mathematically by "resource holding potential (RHP)" and shows that the effective cost to a competitor with higher RHP are not as great as for a competitor with a lower RHP. As a higher RHP individual is more desirable mate in producing potentially successful offspring, it is only logical that with sexual selection RHP should have evolved to be signalled in some way by the competing rivals, and for this to work this signalling must be done "honestly". Amotz Zahavi has developed this thinking in what is known as the handicap principle, where superior competitors signal their superiority by a costly display | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory As higher RHP individuals can properly afford such a costly display this signalling is inherently honest, and can be taken as such by the signal receiver. Nowhere in nature is this better illustrated than in the magnificent and costly plumage of the peacock. The mathematical proof of the handicap principle was developed by Alan Grafen using evolutionary game-theoretic modelling. Two types of dynamics have been discussed so far in this article: A third, coevolutionary, dynamic combines intra-specific and inter-specific competition. Examples include predator-prey competition and host-parasite co-evolution, as well as mutualism. Evolutionary game models have been created for pairwise and multi-species coevolutionary systems. The general dynamic differs between competitive systems and mutualistic systems. In competitive (non-mutualistic) inter-species coevolutionary system the species are involved in an arms race – where adaptations that are better at competing against the other species tend to be preserved. Both game payoffs and replicator dynamics reflect this. This leads to a Red Queen dynamic where the protagonists must "run as fast as they can to just stay in one place". A number of evolutionary game theory models have been produced to encompass coevolutionary situations. A key factor applicable in these coevolutionary systems is the continuous adaptation of strategy in such arms races | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Coevolutionary modelling therefore often includes genetic algorithms to reflect mutational effects, while computers simulate the dynamics of the overall coevolutionary game. The resulting dynamics are studied as various parameters are modified. Because several variables are simultaneously at play, solutions become the province of multi-variable optimisation. The mathematical criteria of determining stable points are Pareto efficiency and Pareto dominance, a measure of solution optimality peaks in multivariable systems. Carl Bergstrom and Michael Lachmann apply evolutionary game theory to the division of benefits in mutualistic interactions between organisms. Darwinian assumptions about fitness are modeled using replicator dynamics to show that the organism evolving at a slower rate in a mutualistic relationship gains a disproportionately high share of the benefits or payoffs. A mathematical model analysing the behaviour of a system needs initially to be as simple as possible to aid in developing a base understanding the fundamentals, or “first order effects”, pertaining to what is being studied. With this understanding in place it is then appropriate to see if other, more subtle, parameters (second order effects) further impact the primary behaviours or shape additional behaviours in the system | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Following Maynard Smith's seminal work in evolutionary game theory, the subject has had a number of very significant extensions which have shed more light on understanding evolutionary dynamics, particularly in the area of altruistic behaviors. Some of these key extensions to evolutionary game theory are: Geographic factors in evolution include gene flow and horizontal gene transfer. Spatial game models represent geometry by putting contestants in a lattice of cells: contests take place only with immediate neighbours. Winning strategies take over these immediate neighbourhoods and then interact with adjacent neighbourhoods. This model is useful in showing how pockets of co-operators can invade and introduce altruism in the Prisoners Dilemma game, where Tit for Tat (TFT) is a Nash Equilibrium but NOT also an ESS. Spatial structure is sometimes abstracted into a general network of interactions. This is the foundation of evolutionary graph theory. In evolutionary game theory as in conventional Game Theory the effect of Signalling (the acquisition of information) is of critical importance, as in Indirect Reciprocity in Prisoners Dilemma (where contests between the SAME paired individuals are NOT repetitive). This models the reality of most normal social interactions which are non-kin related. Unless a probability measure of reputation is available in Prisoners Dilemma only direct reciprocity can be achieved. With this information indirect reciprocity is also supported | https://en.wikipedia.org/wiki?curid=774572 |
Evolutionary game theory Alternatively, agents might have access to an arbitrary signal initially uncorrelated to strategy but becomes correlated due to evolutionary dynamics. This is the green-beard effect or evolution of ethnocentrism in humans. Depending on the game, it can allow the evolution of either cooperation or irrational hostility. From molecular to multicellular level, a signaling game model with information asymmetry between sender and receiver might be appropriate, such as in mate attraction or evolution of translation machinery from RNA strings. Many evolutionary games have been modelled in finite populations to see the effect this may have, for example in the success of mixed strategies. | https://en.wikipedia.org/wiki?curid=774572 |
The Great Salad Oil Swindle is a book by "Wall Street Journal" reporter Norman C. Miller about Tino De Angelis, a New Jersey-based wholesaler and commodities trader who bought and sold vegetable oil futures contracts. The book was published in 1965 by Coward McCann. In 1963, De Angelis was responsible for a major financial scam, attempting to corner the market for soybean oil, which can be used in salad dressing. In the aftermath of the Salad Oil Scandal, investors in 51 banks learned that he had swindled them out of about $175 million in total (approximately $1.4 billion in 2018 dollars). Miller won a Pulitzer Prize in 1964 for his reporting on the De Angelis story in the "Wall Street Journal", on which the book is based. Notes | https://en.wikipedia.org/wiki?curid=775006 |
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