Papers by natsuka tokumaru
Evolutionary economics and social complexity science, 2017
In the 1927 manuscript of Institutional Economics, John R. Commons explicitly referenced Menger’s... more In the 1927 manuscript of Institutional Economics, John R. Commons explicitly referenced Menger’s functional analysis of the human–goods relationship developed in Grundsatze der Volkswirtschaftslehre. By chronologically scrutinizing the Menger–Commons link in the writing of Institutional Economics, this chapter aims to show the methodological inheritance that influenced the value theory of Commons. Commons had been inspired by Austrian value theory during his youth via interpretations of Clark and Smart, especially with regard to the ideas of human volition and social power. After obtaining rich working experiences in the legal and political fields, but encountering setbacks in his attempts to theorize those experiences, Commons began to scrutinize Menger’s functional analysis in Grundsatze, and this scrutiny informed the construction of his volitional theory of “reasonable value.” Menger’s functional analysis was important for Commons because it proposed the conditional logic that drives the value determination process in a power relationship between human subjective evaluation and the objective conditions of goods. Additionally, Commons was inspired by the revised portions of the second edition of Grundsatze, especially the distinction between the “economizing” and “technological” directions within the economy, and the explanation of the process through which institutions emerge from the resolution of “conflicts of interest.” Criticizing the value theory of Menger for being restricted to the field of scarcity, Commons attempted to develop it by introducing other social powers in production, bargaining and legislation. Commons’ theory of reasonable value can be understood as an extension of Menger’s subjectivist value theory based on conditional logic, because it describes human volitional actions under social situations that involve collective action.
Evolutionary and Institutional Economics Review
Political Economy Quarterly, 2016
Political Economy Quarterly, 2015
Journal of Globalization and Development, 2021
Research indicates that the labor share of the aggregate income has decreased steadily since the ... more Research indicates that the labor share of the aggregate income has decreased steadily since the mid-1970s, i.e. when the globalization process began. This paper discusses the ways in which qualitative changes in globalization, coupled with increased offshoring, have changed industrial relationships. In our analysis, we consider a simple Nash bargaining model between employers and employees. Our model proposes the hypotheses that employees gain the power to increase their wages when employers do not have the option of offshoring. However, employees typically lose this power when employers possess an offshoring threat, culminating in wage deduction. Leveraging a panel set of data obtained from 18 OECD countries during the period 1975–2017, we have empirically confirmed these hypotheses by comparing the first phase of globalization—not characterized by an offshoring threat—with the second phase, which entails an offshoring threat. Our findings reveal that workers’ bargaining power, po...
Friedrich von Wieser was a student of law when he read Carl Menger‟s Grundsätze der Volkswirthsch... more Friedrich von Wieser was a student of law when he read Carl Menger‟s Grundsätze der Volkswirthschaftslehre (Principle of Economics) (Menger 1871), for the first time. As a result of this reading young Wieser got much interested in economics. In Grundsätze Menger repeatedly uses the phrase “experience teaches (shows; tells)” (Menger 1871 pp. 81; 82; 100 ;102; 124; 141; 153; 162; 170; 193; 254; 278; 279), and in the preface of that book claims the following:
Declines in labor wage rate accompanied with increases in dividend or stocks are worldwide tenden... more Declines in labor wage rate accompanied with increases in dividend or stocks are worldwide tendencies since 1980s that designates significant change in functional income distribution between capital and labor. Whereas some empirical studies in macro-level analyzes these changes are caused by institutional changes in recent decades such as financialization, studies on micro-level analysis on functional income distributions are few. However, how workers and investors consider distribution justice may have significant importance for explaining recent changes in functional distribution. If both of workers and investors contributed to a production process in different ways, what is ‘fair’ share for each of them? In this paper we have performed economic experiments, consisting of investment stage, production stage and distribution stage and examined fairness ideals in functional income distribution. In our experiment each subject is pair-matched to constitute a two-player’s team consistin...
Evolutionary and Institutional Economics Review, 2019
Establishing effective institutions to promote renewable energy (RE) is an urgent battle in the w... more Establishing effective institutions to promote renewable energy (RE) is an urgent battle in the war against global warming. The RE program Kuni Umi Solar Power Plant with Resident Participation (KSPP) on Awaji Island in Japan has succeeded in large-scale RE deployment in the short term. This paper regards the KSPP as an example of institutional change and examines it from four perspectives-(1) path dependency and exogenous shock, (2) institutions as mediating micro-and macrofactors, (3) residents as micro-actors, and (4) macro-and micro-outcomes-and provides empirical research using a survey of residents. First, institutional change in Awaji has occurred with its rich social and natural capital resources and the crisis it has faced due to depopulation and a mega-earthquake as contrasting backdrops. Second, KSPP had an effective institutional design that integrates different actors-the feed-in-tariff (FIT) system at a national level, the NPO Kuni Umi Association that builds and manages the KSPP, and the Awaji residents who financed the project. Third, Awaji residents were key micro-actors in supporting the KSPP project. Our questionnaire survey shows that the initial period of living in Awaji significantly affects people's willingness to invest in socially responsible investments, whether for environmental protection or regional activation, because of their attachment to the region. Finally, we show that KSPP is achieving RE deployment and local activation as macro-outcomes of institutional change. Further, the prefectural resident survey shows that residents' attachments were significantly enhanced after the KSPP. From the case study, we conclude that a key to institutional change in achieving sustainable development goals is an institutional scheme that matches the specific conditions of a region, promotes cooperation among private and public actors, and integrates goals that bring a dynamic evolutionary process of micro-actors and macro-outcomes.
Evolutionary and Institutional Economics Review, 2019
Production experiments in a simulated firm consisting of an investor and two workers were perform... more Production experiments in a simulated firm consisting of an investor and two workers were performed to examine how different incentives of self-interest, wage inequality, employeremployee inequality, or collective benefit affect worker performance. The findings indicate that workers with information on unequal wages performed significantly lower than equally waged workers for impaired cooperation. Equally paid workers undertake a boycott due to enhanced aversion to employer-employee inequality. However, workers given collective information on total wages and firm revenue showed the highest productivity in response to enhanced incentives for collective benefit, regardless of wage and employer-employee inequality.
Evolutionary Economics and Social Complexity Science, 2016
Since the 1980s, declines in labor wage rates accompanied by increases in dividend yields or stoc... more Since the 1980s, declines in labor wage rates accompanied by increases in dividend yields or stock prices have become a global tendency and denote significant changes in functional income distributions between capital and labor. In this research, I performed economic experiments involving investment, production, and distribution and examined fairness ideals in functional income distributions. All participants are pair matched to form two-player teams, each comprising a worker and an investor, where each team member is required to present a proposal for the division of team earnings. The findings of this research are threefold: First, a few libertarian proposals were made, meaning proposals for dividing production according to ownership of the means of production. Second, labor-value theory seems to significantly impact individuals’ fairness ideals: in the with-labor treatment, both investors and workers tend to be unselfish, whereas in the without-labor treatment, investors do not need to work and both investors and workers tend to exhibit take-all behavior. Third, investors show a significant tendency to favor income-based egalitarian proposals, which enable them to hold the rest of their investment funds as an asset, whereas workers show a significant tendency to favor radical egalitarian proposals, which enable them to redistribute investors’ assets. The experimental results partly explain recent declines in labor wage rates that have accompanied institutional changes.
Evolutionary Economics and Social Complexity Science, 2016
This paper aims to identify the significance of the emergence of experimental methods in economic... more This paper aims to identify the significance of the emergence of experimental methods in economics, by reviewing behavioral theory in the history of economic thought. Economists have adopted numerous approaches in their attempts to resolve what is called das Adam Smith Probleme (the Adam Smith problem)—how to theoretically explain human behaviors driven by social and selfish incentives. For example, Menger separated economic aspects from social aspects, Mises or Weber established a comprehensive concept of purposive behavior, and Keynes strategically avoided micro-foundations for macroanalysis. Moreover, Popper attempted to solve the problem by introducing situational logic that understands human behaviors as appropriate responses to given social conditions. Meanwhile, institutional economists such as Commons attempted to understand humans as acting according to rules in given social institutions. Based on these historical discussions, this paper proposes three meanings of experimental methods: (1) such methods enrich micro-foundations of economics, by enabling the testing of behavioral hypotheses regarding human action under social institutions; (2) such methods serve to create micro-foundations for macro-theory, based on assumptions regarding a “behavioral trend”; and (3) such methods enable the reexamination of the behavioral assumptions of past theories.
Social Preference, Institution, and Distribution, 2016
In this chapter, I have attempted to show how empirical behavioral theories given by laboratory e... more In this chapter, I have attempted to show how empirical behavioral theories given by laboratory experiments contribute to theories of institutional evolution by scrutinizing interactive relationships between humans and institutions. According to this chapter, humans are “institutionalized” and hold a set of behavioral patterns specified by the “going concerns” (organizations) to which they belong. Additionally, humans “institutionalize” working rules of going concerns by coordinating conflicts of interest among individuals. By providing observations of behaviors under a controlled institutional environment, laboratory experiments let us analyze mechanisms and complementarities of existing institutions and also show appropriate directions for institutional reformulations. I discuss that sound institutional evolution should occur through piecemeal social engineering that respects existing social institutions formed through historical processes and that institutional evolution should occur step by step. A goal of institutional evolution is “reasonable value,” which can be achieved based on social norms or working rules that stem from people’s social preferences.
Evolutionary Economics and Social Complexity Science, 2016
In this research, I have attempted to reformulate Wieser’s empiricism based on gedankenexperiment... more In this research, I have attempted to reformulate Wieser’s empiricism based on gedankenexperiment as a micro-foundation for his social economics and thus to derive implications for the application of behavioral theories examined by laboratory experiments to social theories. In his attempt to improve Menger’s economics, Wieser claims that economics should be an empirical science and develops an original scientific methodology based on experience. By analyzing his method, this research proposes that Wieser’s concept of “experience” is divided into four levels: “experience” as stored in language, as obtained via introspection, as derived from gedankenexperiment, and as observation of society. According to this research, Wieser’s experiences are hierarchical and constitute the empirical basis of each dimension from the micro- to macro-levels in the social sciences. This research discusses that Wieser’s method has implications for modern behavioral theories in the sense that it is based on the subjective rationality of humans, which is empirically based. Wieser’s method contains situational analysis of social institutions as preconditions of human behaviors, performs empirical tests via gedankenexperiment on causal explanations linking human’s preferences and social conditions, and involves methodological motivationalism that defines social units as a driving force of social fact. Although his methods had the limitation of being psychological, his method is important as it showed a way to derive social theories from assumptions of behaviors and institutions that are empirically examined.
Evolutionary Economics and Social Complexity Science, 2016
Evolutionary Economics and Social Complexity Science, 2016
Economic experiments have shown that human incentives are not only limited to the profit-maximizi... more Economic experiments have shown that human incentives are not only limited to the profit-maximizing principle but also motivated by fairness. Those studies presuppose that individuals commit to fixed value systems and that experimental institutions invoke fairness ideals. This paper shows that participants strategically select fairness ideals advantageous for self-distribution. Participants whose relative earnings are higher than those of their pairs adhere to a liberalist fairness ideal, whereas those with lower relative earnings prefer an egalitarian distribution of money. This reflects that individuals commit opportunistic behavior as a result of resolving a cognitive dissonance between material utility and fairness.
The History of Economic Thought, 2010
Untersuchungen über die Methode der Sozialwissenschaften, und der politischen Ökonomie insbesonde... more Untersuchungen über die Methode der Sozialwissenschaften, und der politischen Ökonomie insbesondere Menger 1883 Zur Methodologie der Staats-und Sozialwissenschaften
Evolutionary Economics and Social Complexity Science, 2016
The last decade has witnessed growing public and academic attention being paid to socially respon... more The last decade has witnessed growing public and academic attention being paid to socially responsible investment (SRI) as a new way of enhancing corporate governance and bringing institutional changes in financial markets. However, few studies have focused on interactions between investors and companies or the institutional settings that promote SRI. In this research, the author performed economic experiments that artificially recreate a financial market comprising investors and companies to observe which institutional settings of SRI—information disclosure, reward, and punishment—are effective for governing corporate activities that can harm or benefit society. The results of experiments showed that disclosure of information related to a company’s social value somewhat reduces harmful corporate activities in relation to investor social preferences. However, it cannot exclude free-riding strategies of companies and investors and higher payment gaps among participants that result from such strategies. A rule of rewarding the company most beneficial to the public in addition to information disclosure had a significant effect in limiting public losses and narrowing payment gaps among participants. However, punishing the most harmful company had a stronger and stabilizing effect in limiting public losses and narrowing payment gaps. These experimental results imply that a combination of voluntary information disclosure to appeal to investor social preferences and compulsory punishment of harmful companies is a condition for successful SRI.
Evolutionary Economics and Social Complexity Science, 2016
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Papers by natsuka tokumaru