Pragmatic Economist

De Economist

We analyze the dynamic behaviour of firms that locally interact through price competition in a social environment in an evolutionary game-theoretic model. These firms update their prices according to the behavioural rule ‘Win Cooperate, Lose Defect’ ~WCLD!, which is often observed in experimental economics. It can be regarded as a generalized Tit-for-Tat strategy. The model can explain the simu...

Adam Smith , Behavioral Economist

The Economist as Plumber

Adam Smith, Behavioral Economist

I n The Wealth of Nations, published in 1776, Adam Smith famously argued that economic behavior was motivated by self-interest. But 17 years earlier in 1759, Smith had proposed a theory of human behavior that looks anything but selfinterested. In his first book, The Theory of Moral Sentiments, Smith argued that behavior was determined by the struggle between what Smith termed the “passions” and...

The Main Street Economist

New technologies, products, and services are brought to market every year by small entrepreneurs. The heart valve, safety razor, and soft contact lens are just a few examples. One common thread ties all successful entrepreneurs together—innovation. Innovation brings something new or unusual to the marketplace, and in the process sharpens competitiveness and creates wealth. New firms, new produc...