Spring 2003 Colloquia

Colloquia during Spring 2003:

Monday, January 13, 2003

What Could Foresight Have Done?

Presented by Rafael Reuveny and David Good, Associate Professors at the School of Public and Environmental Affairs, Indiana University, Bloomington

Abstract:Many scholars argue that renewable resources such as fresh water, forests, rangelands, fisheries, and the atmosphere are imposing growing limits on contemporary economic development. This view was first stated formally by Malthus (1798) who argued that population growth would eventually lead to environmental and economic decline, starvation, wars, and a fall in population - so called, the Malthusian trap. In this context, Easter Island is an interesting place to study since it remained isolated for nearly 1400 years. By the time Europeans arrived in the eighteenth century, its once thriving civilization had all but disappeared, the island experienced a total depletion of what was once a lush forest, and it had periods of brutal tribal warfare and cannibalism.

For a long time, scholars have been puzzled by what caused the Easter Island collapse. Recently, Brander and Taylor (1998) applied formal economic and biological modeling to the problem by characterizing the island as a Predator-Prey system: the human population, dependent on the island's resources, over-exploited them, which led to a rapid population decline. Brander and Taylor assume that agents are myopic. We modify Brander and Taylor's assumption that agents are myopic in order to examine what difference modern institutional arrangements would have had on the island's history. We then address the relevance of our work to contemporary societies.

Many have suggested that the appropriate solution to the Malthusian Trap is institutional through the assignment of property rights. Standard economic growth models approach the mathematics of institutions by assuming that agents have an infinite time horizon. Agents are assumed to solve an optimal control problem in order to maximize the sum of their appropriated discounted utilities over time and optimal harvesting rules are developed, which must then be enforced by property right institutions through incentives or sanctions on the members of society. In these models population growth is determined exogenously, and typically is assumed either to be constant or to grow exponentially. The standard approach focuses on equilibrium conditions and comparative statics analysis. The transition path to the equilibrium is only studied in the close vicinity to the steady state, using such methods as Jacobean analysis or phase diagrams.

Given the relatively primitive nature of the Easter Island civilization, it seems plausible to ignore, as Brander and Taylor do, institutional reforms in this case. Yet, as stated earlier, the possible solutions to the "Malthusian Trap" involve precisely institutional reforms. Accordingly, we have three goals. First, hypothetically, we wish to understand what foresight would have done to the Easter Islanders. Second, we want to see how these varying degrees of foresight would have meshed with the enforcement capabilities of modern institutions. Our last goal is to evaluate the applicability of our findings to contemporary societies.

We borrow much of our model from the dynamic predator-prey model of Brander and Taylor. The model includes a composite manufactured good and a composite harvested renewable resource. In contrast to the usual assumption of exogenous population growth that is employed in the growth literature, we assume that fertility rises with per capita income. A representative agent maximizes his/her sum of discounted utilities, where utility rises with the harvested good. The model yields an optimal control system that, to the best of our knowledge, has no analytical solution. In contrast to the growth literature, we focus on the full transition path of this optimal control model, from initial condition to transversality condition.

We study the system with numerical solutions based on two methods: optimal control theory from Pontryagin and parametric variation of extremals. The system is parameterized using the numbers employed by Brander and Taylor for Easter Island. We examine different time horizons, ranging from quite short, 10 or 20 years, to rather long, 2000 years, along with different reasonable levels of discounting. We find that even with no discounting, the level of foresight required to avert the disastrous history of Easter Island would have had to have been on the order of 1000 years. With even a modest real discount rate of only one percent, no level of foresight would have helped the Easter Islanders.

Of course, our results fall short of predicting death and destruction for all of mankind. We are, however, able to describe some key characteristics of environmental and resource problems where modern institutional arrangements probably will not work

There will not be a formal paper for this session.

Thursday 23, 2003

Non Self-Interest, the Moral Point of View, and the Arrow Problem

Presented by Norman Frohlich, Professor at the I.H. Asper School of Business and Senior Researcher at the Manitoba Centre for Health Policy at the University of Manitoba, Winnipeg, and Joe Oppenheimer, Professor at the Department of Government and Politics and Director of the University of Maryland Collective Choice Center, University of Maryland, College Park.

Abstract: Arrow showed that there is no general solution to the aggregation of ordinal preferences nor of individual welfares into either a sensible social choice or a welfare measure. The standard solution to this problem has been to consider 'spatial models' that are built on spatially restricted preferences (or welfares). We show that an alternative family of solutions exists: one that may in fact be far more attractive. By replacing self-interest with a simple form of other-regarding preferences, coupled with a sense of justice, we establish the possibility of sensible aggregate choice. We do this by establishing conditions for a Condorcet winner in a problem of pure redistribution: one that has been used to establish the plausibility of cyclic outcomes. Given that all societies are based on some attributes of other-regardingness, how frequently democratic choice finds itself faced with the theoretical problems Arrow uncovered must be answered empirically. The fact that few such cycles have been uncovered leads one to suspect that humanity's 'modal forms' of other-regarding behavior prevents them from occurring.


Norman Frohlich - has an Honours Bachelor Degree in Mathematics from the University of Manitoba (1963), a MS from Rutgers University (1965), and a Doctoral degree in Politics from Princeton University (1971). He taught in the Department of Government at the University of Texas at Austin from 1970-1975, served with the Treasury Board of the Province of Manitoba until 1979 at which time he joined the Faculty of the Asper School. His main field of expertise is public choice theory, and he has research interests that include distributive justice, collective action/social dilemmas, ethics, experimental economics, and health care policy. He has co-authored (with Joe Oppenheimer) several books in the field. Their most recent book Choosing Justice: An Experimental Approach to Ethical Theory (1992) addresses two perennial questions: What is justice? And how can we come to know it?

Joe Oppenheimer - A number of high school teachers whet his appetite for theoretical work including Markowitz, Kruger, Wright, Rock, and Warneke. After getting a degree from Cornell in 1963 (where he was fortunate to have guidance and help from Professors Lowi, Hacker, Shibley and Lewis) Oppenheimer went for his MA in Economics to the University of Michigan and, after serving in the military from 1965 to 1967, received his Ph.D. from Princeton University in 1971. He has taught in the Government and Politics Department at the University of Maryland since 1976, arriving here from a tenured position at the University of Texas. He is also the director of the University of Maryland Collective Choice Center.

Monday, January 27, 2003

Bridging the Gap between Rationality and Adaptation in Social Explanation

Presented by Professor Werner Güth, Director, Strategic Interaction Group, Max Planck Institute for Research into Economic Systems, Jena, Germany (coauthors: Siegfried Berninghaus and Hartmut Kliemt)

Abstract: This paper focuses on the uneasy alliance of rational choice and evolutionary explanations in modern economics. While direct evolutionary explanations of "optimality" rule out "purposeful" rational choice by assuming "zero-intelligence" and pure rational choice explanations leave no room for "selective" adaptation the indirect evolutionary approach integrates both perspectives. Subsequently we go stepwise "from teleology to evolution" and thereby study the model spectrum ranging from pure rational choice over indirect to direct evolutionary approaches. We believe that knowledge of this spectrum can help to choose more adequate models of economic behavior that incorporate both teleological and evolutionary elements.

BIO: Werner Güth has studied economics at the University of Münster (1965 - 1970) where he also received his doctoral degree (1972) and habilitation (1976). He was professor for economic theory of the University of Cologne (1977 - 1986), the University of Frankfurt (Main) (1986 - 1994) and Humboldt-University of Berlin (1994 - 2001) before becoming the director of the Strategic Interaction Unit in 2001. His main fields of research are game theory, experimental and micro-economics although he considers himself more as a social scientist with strong interests in psychology, philosophy, (evolutionary) biology and the political sciences.

Paper in PDF format

Monday, February 3, 2003

Reinventing Majority Rule

Presented by Michel Regenwetter, Assistant Professor with the Quantitative Division of the Department of Psychology, University of Illinois at Urbana-Champaign

Abstract: Two of the most profound conceptual distinctions in the decision sciences are (1) the distinction between normative and descriptive theories of decision making, and (2) the distinction between individual decision making and social choice. The presentation provides a status report on a multi-year, multi-disciplinary, and multi-researcher project, led by Michel Regenwetter, on reconciling individual and social choice from both a descriptive as well as a normative point of view. Much of this project has been published in a variety of scientific journals and a synthesis is under book contract with Cambridge University Press.

The talk will focus on the example of majority rule decision making. It will lay out how social choice theorists have been preoccupied with the wrong questions, such as, e.g., the likelihood of majority cycles, and how textbooks continue to promote incorrect policy implications from social choice research on majority rule. It will also lay out reasons why majority rule decision making has hardly been investigated empirically and descriptively.

The paper will then argue for a paradigm shift in social choice research by addressing two important questions about majority decision making:

1. What is the likelihood that group decision making under majority rule will yield an INCORRECT majority winner?

2. Given that virtually no empirical ballot or survey data provide the data necessary to compute majority outcomes, how do models of individual preference and choice in psychology help to empirically and descriptively investigate majority rule?

BIO: Dr. Regenwetter received his Ph.D. in Mathematical Behavioral Sciences from the University of California at Irvine in 1995. He has been a Postdoctoral Fellow at McGill University (Psychology, 1995-1997) and an Assistant Professor of Business Administration at Duke University (Decision Sciences, 1997-2001), before joining the Psychology (Quantitative Division) and Political Science Departments at the University of Illinois at Urbana-Champaign. He has received numerous grants and awards, including the 1999 Young Investigator Award of the Society for Mathematical Psychology.

Regenwetter's research interests embrace the interdisciplinary decision sciences and are founded on the simple insight that individual preferences fluctuate over time and differ among people. Few models of utility and decision making attempt to capture this fundamental fact explicitly. Regenwetter's primary goal is to model, measure, and predict preference and choice behavior when it is allowed to vary. He uses so-called `random utility' models as a modeling language to capture and quantify the ubiquitous variability in choice and preference behavior. Regenwetter's primary interests can be categorized as falling within three paradigms: probabilistic measurement, social choice, and preference evolution over time.

There will not be a formal paper for this session. However, two background papers, “On the (Sample) Condorcet Efficiency of Majority Rule” and “On the Probabilities of Correct or Incorrect Majority Preference Relations,” will be made available. Since one of the background papers has been published and the other will soon be published, the papers will not be added to our website. Hard copies of the papers will be available at the Workshop.

Monday, February 10, 2003

A Historical Perspective

Presented by Okwudiba NnoliCoordinator-General, Pan African Centre for Research on Peace and Conflict Resolution, Enugu, Nigeria

Abstract: The state in Nigeria is an instrument of coercion that has historically engaged in an aggressive accumulation and projection of political power. Its coercive unilateralism typically generates conflict along ethnic, class, and gender lines, among others. Processes of state penetration have destabilized independent communities, deprived them of their autonomy, and appropriated their resources. Structural changes in Nigeria's economy, especially those associated with unfavorable terms of trade, have also exposed large numbers of Nigerians to external shocks. State power structures perceived to be illegitimate by ordinary people were eventually challenged by competitive opposition in processes in which the reckless projection of power accumulated a critical mass of desperate enemies: labor unions, ethnic groups, counter elites, students, women, and businessmen. Ethnic identities became primary identities embraced in resisting the coercive violence of the colonial state. Unfortunately, the static and totalistic character of such identities makes them unsuitable for framing serious initiatives to challenge state violence in ways appropriate for attaining democracy. Employed as instruments against state oppression, they have targeted the wrong enemies, i.e., other ethnic groups rather than the rampaging undemocratic state. Transcending such tendency becomes a significant challenge in the establishment of participatory democracy in Nigeria.

BIO: Professor Okwudiba Nnoli received all his university education at Stanford University, Stanford, California, obtaining the B.A., M.A., and Ph.D. degrees there. He then taught at the University of Chicago, University of Dar es Salaam Tanzania, and University of Nigeria, before founding and heading a private think tank on Peace and Conflict Resolution. During the course of his academic career, he has held the post of Head of Department, Dean of Faculty, President of the Nigerian Political Science Association, President of the African Association of Political Science, Member of the Executive Committee of the International Peace Research Association. He is presently the Coordinator-General of the Pan African Centre for Research on Peace and Conflict Resolution based in Enugu, Nigeria. He is the author and editor of numerous books, journal articles, and book chapters including: Self Reliance and Foreign Policy in Tanzania, Ethnic Politics in Nigeria, Government and Politics in Africa, Ethnic Conflict in Africa, Path to Nigerian Development, Dead-end to Nigerian Development, Ethnicity and Development in Nigeria, etc.

Paper in PDF format

Monday, February 17, 2003


Presented by Alex Gboyega, Chair, Department of Political Science, University of Ibadan, Oyo State, Nigeria

Abstract: Representative local government is only about fifty years old in Nigeria. It started when Nigerian politicians assumed leadership of regional legislatures under colonial reforms that led to regional self-government in the 1950s. They instituted reforms that gradually transferred local government authority from traditional rulers to elected representatives. In the process, they created space for political participation for local elites, especially western educated elites, who hitherto played little or no role in local governance. Their model was the British local government system with its tiered structure and committee system. The main incentives for the rapid transition to representative local government were to prove to colonial authorities the readiness of Nigerian politicians to assume higher political and administrative responsibilities and to enhance their own capacity to mobilize the rural communities behind the struggle for national independence. This was understandable as decentralization was a strategy of political mobilization in Africa during the period of decolonization (Kasfir, 1983).

BIO: Professor Alex Gboyega studied political science at the University of Ghana, Legon (1969-72), where he obtained a BA (Hons.) Political Science degree in 1972. He completed his Ph.D. program at the University of Ibadan, Ibadan, in 1975. He has been teaching in the Department of Political Science, University of Ibadan since then. He was a Commonwealth Research Fellow at the Institute of Local Government Studies, Birmingham University, UK in 1982-83. He has published widely on local government administration in Nigeria. Among his publications is Political Values and Local Government in Nigeria (1987). He is the current chair of Political Science at the University of Ibadan.

Paper in PDF format

Monday, February 24, 2003

The Case of the Mano River Basin Area

Presented by Amos Sawyer, Co-Associate Director and Research Scholar, Workshop in Political Theory and Policy Analysis, Indiana University, Bloomington.

Abstract: In West Africa, sustained failure of governance arrangements has led to the development of a system of violent conflicts in the Mano River basin area of Guinea, Liberia, and Sierra Leone. Liberia is the epicenter of this conflict system and a bridge to other conflicts in the wider West African sub-region. Fueled and sustained by a supportive international environment, this system of conflicts and its corresponding governance challenges have been largely addressed through state-specific responses which have, at best, yielded short-term successes but have typically failed to foster long-term solutions. What are needed are new approaches that can address regional scale conflicts and the challenges of reconstituting order at multiple levels of governance.

BIO: Amos Sawyer is research scholar and co-associate director of the Workshop. He holds a Ph.D in political science from Northwestern University and taught for many years at the University of Liberia, becoming dean of the College of Social Sciences and Humanities in 1981. He was chairman of the Liberian constitution commission in 1981 and president of the Interim Government during Liberia’s civil war. He is actively involved in peacebuilding and conflict resolution initiatives in Africa and frequently serves in advisory capacities to African regional organizations and the UN on questions of African governance and conflict resolution. He has published extensively on such issues.

Paper in PDF format.

Monday, March 3, 2003


Presented by Laurence J. Kotlikoff, Professor and Chairman of the Department of Economics, Boston University, and Research Associate at The National Bureau of Economic Research, Cambridge, Massachusetts (coauthors: Jagadeesh Gokhale, The Federal Reserve Bank of Cleveland, and Alexi Sluchynsky, consultant)

Abstract:Does it pay to work? Given the number and complexity of federal and state tax and transfer systems, this is a tough question to answer. The problem is greatly compounded by the fact that what one earns in one year alters not just current taxes and transfer payments in that year, but in future years as well. There are five dynamic linkages here. First, earning more in the present typically alters current saving and, therefore, future levels of capital income and capital income taxes. Second, earning more in the present generally alters not just current, but also future levels of consumption, and, therefore, future consumption taxes. Third, changing future levels of income and assets affect the receipt of income- and asset-tested transfer benefits. Fourth, the most important transfer program, Social Security, explicitly links future transfer payments to current earnings. Fifth, income taxes in retirement can depend on past labor earnings because Social Security benefits depend on past earnings and these benefits can be subject to federal income taxation.

Thus, understanding the net effective tax on work and the changes in this taxation associated with policy reforms requires an intertemporal model capable of carefully determining tax and transfer payments at each stage of the life cycle. This study uses ESPlanner, a financial planning software program developed by Economic Security Planning, Inc., to study the net-work tax levied on workers with different earnings capacities. ESPlanner smooths households' living standards subject to their capacities to borrow. In so doing, it makes highly detailed, year-by-year federal and state income tax and Social Security benefit calculations. To produce a comprehensive work tax measure, we added to ESPlanner all other major transfer programs, specifically Food Stamps, TAFDC, Medicaid, Medicare, Housing Assistance, SSI, WIC, and LIHEAP.

We focus on lifetime average and marginal net work-tax rates, which are measured by comparing the present values of lifetime spending from working through retirement both in the presence and in the absence of all tax-transfer programs. We form these tax rates for young stylized married workers. We report eight findings. First, our fiscal system is highly progressive. Couples working full time and earning the minimum wage receive 32 cents in benefits net of taxes for every dollar they earn. In contrast, households with million dollar salaries pay 51 cents in taxes net of benefits per dollar earned. Second, net subsidies are provided only at the very bottom end of the income distribution. Average net-work tax rates of couples earning 1.5 times the minimum wage (32,100 per year) are a positive 14 percent. For working couples earning 5 times the minimum wage ($107,100), the net tax rate is 38 percent. Third, while the poor face negative average taxes, they, like the middle class and the rich, face positive marginal net taxes on working that exceed 50 percent. Moreover, certain low- and moderate-income households face substantially higher marginal net work-tax rates than those faced by the rich. Fourth, low-wage workers face confiscatory tax rates on switching from part-time to fulltime work. Fifth, the same is true of secondary earning spouses in low-wage households. Sixth, the marginal net tax on working is particularly high for young households with low incomes. Seventh, average and marginal net-work tax rates are relatively insensitive to the assumed rate of real wage growth and the discount rate. And eighth, major tax reforms, such as switching from income to consumption taxation, can have a significant effect on the fiscal system's overall progressivity.

BIO: Professor Kotlikoff received his Ph.D. from Harvard University. He is Professor and Chairman of the Department of Economics at Boston University.

In addition to his presentation at the Workshop, Professor Kotlikoff has been invited to give the Patten Lectures.

Tuesday, March 4: "The Coming Generational Storm: The Emperor's New Clothes," Swain West 119, 7:30 p.m.

Thursday, March 6: "The Coming Generational Storm: Do Cry for Me Argentina," Woodburn 101, 7:30 p.m.

Monday, March 10, 2003


Presented by Roger Lagunoff, Professor of Economics at Georgetown University, Washington, DC

Abstract: This paper examines the mechanics of intertemporal information provision in dynastic governments. It has been suggested that "horizontal accountability," i.e., a system of governance where auditing functions lie outside the executive branch, can ensure credible disclosure of information. The results here suggest a cautious approach to that view.

Government is modeled as a dynastic sequence of regimes. Each regime rules for one period, chooses an expenditure level, then relinquishes power to its successor.

When information about past policy choices comes exclusively from the reports of previous regimes, each regime has an incentive to choose its (suboptimal) one shot expenditure policy, and then misrepresent its choice to its successor.

I examine the credible communication equilibria taking into account the reporting incentives of an auditor who can independently verify the information each period. In an environment where "liberal" (i.e., those preferring larger government expenditures) and "conservative" (those preferring smaller expenditures) regimes and auditors evolve over time, it is shown that: "conservative" ("liberal") auditors are not credible when the current regime is also "conservative" ("liberal"). Moreover, because information transmission stops when the auditor's and the regime's biases coincide, effective deterrents even in the "good" periods (when the auditor's and the regime's biases differ) are difficult to construct. In all periods the equilibrium requirement of auditor neutrality constrains the dynamic incentives for efficient policy choices. The main result shows that these constraints typically bind away from optimal policies in standard constructions of equilibrium.

BIO: Roger Lagunoff is Professor of Economics at Georgetown University. He received his Ph.D. in Economics from the University of Minnesota in 1989, and has held faculty positions at the University of Pennsylvania, the Virginia Polytechnic Institute and State University, and Bell Laboratories. His research includes topics in game theory, microeconomic theory, political economy, and public economics. It specifically focuses on models of endogenous institutional arrangements. These arrangements include formal structures such as constitutions and voting mechanisms, as well as informal ones such as social norms for cooperation in collective action problems. In 2002, he received a National Science Foundation Grant to study the design of optimal local interaction systems.

A copy of the paper can be found on Professor Lagunoff's website at:

Monday, March 24, 2003


Presented by Michael Wade, Professor, Department of Biology, Indiana University, Bloomington

Abstract: The genetic architecture of a phenotype consists of the genes, the interactions among them (epistasis), and the interactions among genes and environments (G x E) that affect the phenotype’s expression. For a phenotype with a “complex” genetic architecture, epistasis and G x E account for a significant portion of the phenotypic variation. In contrast, for a phenotype with a “simple” architecture, interactions are unimportant. Epistasis contributes to inbreeding depression, developmental homeostasis, plasticity of response to environmental change, evolution of sex and recombination, mating system evolution, speciation, and interdemic selection. For example, in speciation, epistasis contributes to reproductive isolation because genes that function well in the genetic background of one species function poorly when genetic backgrounds are combined in hybrids. Such a change in the sign of a gene’s effect on the phenotype, from positive to negative, requires gene interaction. In the same way, gene interactions are essential to understanding developmental homeostasis (or canalization), in which alleles at one locus diminish allelic effects at other loci.

Within evolutionary theory, the role of epistasis has long been controversial. Sewall Wright considered epistasis to be “ubiquitous” and stated that “The inadequacy of any evolutionary theory that treats genes as if they had constant effects, favorable or unfavorable, irrespective of the rest of the genome, seems clear” (Wright, 1969, p. 88). He emphasized that the “…existence [of epistasis] must be taken as a major premise in any serious discussion of population genetics and evolution” (Wright, 1969, p. 105). Wright (1931) developed his “adaptive landscape” as a way of illustrating non-linearities in the map between two-locus gene combinations and fitness, although he found it inadequate for representing gene interactions of higher dimensionality. Wright’s views have been criticized, in part because the effects of epistasis in micro-evolutionary processes within a single population often can be minimized by transformation. Speciation theory is a good example of how the epistasis can be minimized in microevolution and yet be essential to macroevolution. Genetic epistasis causes a reduction in fitness of inter-population hybrids (macroevolution), yet it plays no role at all in adaptation within populations preceding the speciation event (microevolution) The “meaningful” simplicity of “beanbag genetics” suffices for within-population evolutionary theory but the beans become magic, enchanted with epistasis, in explanations of the origin of species. I will discuss the controversy its genetic underpinnings.

BIO: Michael Wade received his doctoral degree in Theoretical Biology from the University of Chicago in 1975. Between 1975 and 1987, he moved through the ranks from Assistant to Full Professor in Chicago’s Department of Ecology and Evolution, where he also served as chair from 1991 to 1998. He joined the faculty of the Department of Biology as Full Professor at Indiana University in 1998. His research in evolutionary genetics and selection combines theoretical models with experimental investigations of laboratory and field populations. He is best known for his research on measuring the strength of different kinds of selection, including group selection, kin selection, and sexual selection.

There will not be a formal paper for this session. However, two background papers are available: “Perspective: The Theories of Fisher and Wright in the Context of Metapopulations: When Nature Does Many Small Experiments” and “A Gene’s View of Epistasis, Selection, and Speciation,” which can be found on our website.

Monday, March 31, 2003


Presented by Jeffrey Isaac, James H. Rudy Professor, Department of Political Science, Indiana University, Bloomington

Abstract: Times of war present moral challenges to all conscientious individuals, but especially to liberals, because liberalism is above all a philosophy of legality, toleration, and rights. In this talk, I will address some of the distinctive moral and practical difficulties confronting liberal intellectuals in a time of war. My discussion will draw in part on the example of liberal intellectuals, most especially the debate between John Dewey and Randolph Bourne, during World War I. It will also focus on some of the distinctive challenges confronting contemporary liberal intellectuals in the face of imminent war in Iraq.

My comments are very much motivated by concerns about the current course of events. They grow out of my ongoing activities as a contributor to Dissent magazine and as a participant in broader discussions of "civility." And they also draw from the book that I currently am writing, entitled Fighting Like a Liberal.

My talk will both reflect upon and exemplify certain problems of political judgment. These problems are practical problems of politics. They are also the topic of much discussion among political theorists. Beyond the general theme of "judgment," they have bearing on the kinds of theoretical defenses of liberal democracy that are most appropriate to the intellectual and political challenges of the twenty-first century.

BIO: Jeffrey C. Isaac is James H. Rudy Professor of Political Science at Indiana University, where he also directs the Center for the Study of Democracy. His books include The Poverty of Progressivism: The Future of American Democracy in a Time of Liberal Decline (Rowman & Littlefield, 2003), Democracy in Dark Times (Cornell, 1998), and Arendt, Camus and Modern Rebellion (Yale, 1992). He also writes regularly for Dissent magazine, on whose editorial board he serves.

There will not be a formal paper for this session. However, three background papers are available:

"Supporting the War: Thoughts On Doing Things With Words" [war in question here was Afghanistan]

"Ends, Means, and Politics" (

"Rethinking the Cultural Cold War" (

Monday, April 7, 2003

SMART HEURISTICS, An Adaptive Intelligence of the Unconscious?

Presented by Professor Gerd Gigerenzer, Director, Center for Adaptive Behavior and Cognition (ABC), Max Planck Institute for Human Development, Berlin, Germany

Abstract: How do people make decisions when there is little time, knowledge limited, and the future uncertain? For many economists, the answer is that people optimize under constraints, such as information costs. For many psychologists, in contrast, the answer is that people systematically commit serious reasoning fallacies, due to constraints such as limited cognitive capacities. These two views make an odd couple, one promoting rationality, the other irrationality. One analyzes constraints in the environment, the other constraints in the mind-each treating the two sets of constraints as independent. In this lecture, I propose an alternative view of cognition based on Herbert Simon's view of bounded rationality. He compared human rationality to a pair of scissors, one blade is the environment, the other cognition. The two pairs of constraints are dependent on each other: one cannot understand how a scissor cuts by looking only at one blade.

I provide examples of fast and frugal heuristics and discuss the concept of human intelligence as an adaptive toolbox, where adaptive means that heuristics are designed for specific environments. Heuristics rely on the power of simplicity, such as ignoring much of the available information and focusing on the few relevant pieces. Simplicity can help to make decisions fast, transparent, and robust. The adaptive toolbox provides a Darwinian perspective of cognition. Its rationality is ecological, not logical: heuristics enable people to make good decisions with little information by exploiting structures in the environment.


Gigerenzer, G., Todd, P. M. & the ABC Research Group (1999). Simple Heuristics That Make Us Smart. New York: Oxford University Press.

Gigerenzer, G. & Selten, R. (Eds.) (2001). Bounded Rationality: The Adaptive Toolbox. Cambridge, MA: MIT Press.

BIO: Gerd Gigerenzer is Director of the Center for Adaptive Behavior and Cognition (ABC) at the Max Planck Institute for Human Development, Berlin; former Professor of Psychology at the University of Chicago, and John M. Olin Distinguished Visiting Professor, School of Law, University of Virginia. His books include Simple Heuristics That Make Us Smart (with Peter Todd & the ABC Research Group, Oxford UP 1999), Adaptive Thinking: Rationality In The Real World (Oxford UP 2000), Bounded Rationality: The Adaptive Toolbox (with Reinhard Selten, MIT Press 2001), and Calculated Risks: How To Know When Numbers Deceive You (Simon & Schuster 2002). He is the winner of the 1987 Association of American Publishers Prize for the best book in the Social and Behavioral Sciences (The Probabilistic Revolution, MIT Press), the 1991 American Association for the Advancement of Science (AAAS) Prize for Behavioral Science Research, and the 2002 German Book of the Year Prize for Science.

There will not be a formal paper for this session. However, a background paper is available: "Rationality the Fast and Frugal Way," which can be found on our website.

Co-sponsored by the Cognitive Science Program

In addition to his presentation at the Workshop, Professor Gigerenzer has been invited to give a presentation for the Cognitive Science Program.


Monday, April 14, 2003


Presented by David Chavalarias, Ph.D. Student, Center for Research in Applied Epistemology (CREA) of the Ecole Polytechnique, Paris, France

Abstract: Much attention has been given in the last several years to the modeling of social systems in economy as well as in anthropology and political science. Among the phenomena considered as having a structuring power for social systems, imitation processes play a central role, completing and sometime competing with a more traditional economic approach based on the rational choice theory.

But the diversity of mimetic rules employed by modelers proves that the introduction of mimetic processes into formal models cannot avoid the traditional problem of endogenization of all the choices, including the one of the mimetic rules. This article addresses this question starting from the remark that Human's meta-cognitive and reflexive capacities are the ground for a new class of mimetic rules. This leads us to propose a formal framework, meta-mimetic games, which have the advantage of endogenizing mimetic processes while being Human specific.

With a first example of such meta-mimetic game, we show how this framework can give a comprehensive description of a heterogeneous population structure at the behavioral level as well as at the level of the choices of mimetic rules.

BIO: David Chavalarias is a Ph.D. student at the Center for Research in Applied Epistemology (CREA) of the Ecole Polytechnique (Paris). After studies in mathematics and computer sciences at the Ecole Normale Supérieure, he got involved in cognitive sciences at the Ecole Polytechnique. Financed by the French National Center for the Scientific Research (CNRS), he is now doing his research on social cognition and evolution of social systems. He particularly focuses his work on the problem of endogenous preferences and social network formation, developing a new framework based on complex systems, multi-agents modeling, and mathematical analysis. These researches have various applications in the social sciences in fields like economy, collective discovery, emergence of cooperation, and cultural evolution. See

Paper in PDF format

Thursday, April 17, 2003


Presented by Petre Paul Fudulu, Professor of Economics, Faculty for Political Studies, and Senior Researcher at the Center for Compared and Consensual Economics, University of Bucharest, Romania

Abstract: In countries like Romania, successful economic reforms have to overcome not only the difficulty of adopting, but also the weak institutions syndrome: the adopted institutions do not work properly and systematic corruption emerges. To cope with this problem, an institutional choice model incorporating cultural preferences is developed. The inconsistency between national cultural preferences and the adopted institutions is suggested as the key explanatory variable.

Keywords: cultural preferences, institutional choice, corruption, enforcement mechanism, PD game

BIO: Paul Fudulu is a professor of economics at the Faculty for Political Study, University of Bucharest and, simultaneously, is a Senior Researcher at the Center for Compared and Consensual Economics within the Romanian Academy. He has taken part in many international research programs and conferences. For two academic years, he was a visiting scholar at the Center for Study of Public Choice, George Mason University, Virginia, an academic place he feels closely associated with. He wrote studies, books, and booklets on the theory of justice, international exchange and monetary theory, economics of education, culture and economic growth. Ideas from his book Metamaximization: Wealth and Justice were published in JEBO. Currently he is writing a book on externalities and education.

Paper in PDF format

Monday, April 21, 2003


Presented by John Maxwell, Associate Professor, Business Economics and Public Policy, Kelley School of Business, and Affiliated Faculty, Workshop in Political Theory and Policy Analysis, Indiana University, Bloomington (Coauthor: Thomas Lyon, Associate Professor, Business Economics and Public Policy, Kelley School of Business, and Affiliated Faculty, Workshop in Political Theory and Policy Analysis)


: We study three corporate non-market strategies designed to influence the lobbying behavior of other special interest groups: 1) “astroturf,” in which the firm covertly subsidizes a group with similar views to lobby when it normally would not, 2) the “bearhug,” in which the firm overtly subsidizes the lobbying activities of another interest group, and 3) self-regulation, in which the firm voluntarily limits the potential social harm from its activities. All three strategies can be used to reduce the informativeness of lobbying, and all reduce the welfare of the public decision maker. We show that the decision maker would benefit by requiring the public disclosure of funds spent on astroturf lobbying, but the availability of alternative influence strategies limits the impact of such a policy.

BIO :John W. Maxwell is an Associate Professor of Business Economics and Public Policy in the Kelley School of Business, Indiana University. He received his PhD from Queen's University (Canada) in 1993. Professor Maxwell is also a Senior Fellow at the Center for European Integration Studies (ZEI) at the University of Bonn, and an Adjunct Professor in the Department of Economics, Peking University, where he is assisting in the establishment of a degree program in environmental economics. Professor Maxwell's research has focused on the political economy of regulation and self-regulation with a particular focus on the role of voluntary corporate environmental actions. He is currently coauthoring a book (with Thomas P. Lyon) entitled Corporate Environmentalism and Public Policy, which is a compilation of their joint work in the area. The book will be published in 2003 by Cambridge University Press. His other research interests include insurance economics and the economics of conflict over scarce resources in underdeveloped societies. He teaches Business Strategy, Industrial Organization, and Public Policy in the Kelley School of Business.

Paper in PDF format

Associated figures in PDF format

Monday, April 28, 2003


Presented by Eric Rasmusen, Indiana University Foundation Professor of Business Economics and Public Policy, Kelley School of Business, and Affiliated Faculty, Workshop in Political Theory and Policy Analysis, Indiana University, Bloomington (Coauthor: Richard McAdams, Guy Raymond Jones Professor of Law, University of Illinois College of Law, Champaign)

Abstract : Social norms became a hot topic in law-and-economics in the 1990's. Everyone realizes their importance, both as a guide to behavior and as either substitute or complement for law. Coming up with a paradigm for analyzing norms, however, has been surprisingly difficult, as has systematic empirical study of them. In this chapter of the Handbook of Law and Economics, edited by A. Mitchell Polinsky and Steven Shavell and forthcoming in 2004, we will try to survey what has been written.

This paper is at an early stage. We are particularly interested in suggestions for its organization and in links to literatures in other disciplines.

BIO : Eric Rasmusen is Indiana University Foundation Professor of Business Economics and Public Policy at Indiana University's Kelley School of Business. Born and raised in Urbana, Illinois, he received his training at Yale and the Massachusetts Institute of Technology, and held positions at UCLA, Yale, and the University of Chicago before joining the faculty at Indiana. He specializes in the analysis of strategic behavior and the application of economic methods to law, and his widely used graduate text, Games and Information: An Introduction to Game Theory, has been translated into Italian, Spanish, and Japanese. He has published some forty articles on topics ranging from anti-trust law to social norms, and his book with J. Mark Ramseyer, Measuring Judicial Independence: The Political Economy of Judging in Japan, was published in 2003.

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