Selected publications [1] “Game Theory to the Rescue?” Contributions to Political Economy (1994) vol. 13, pp. 1-28. [2] “The Microfoundations Project in General Equilibrium Theory.” Cambridge Journal of Economics (1994) vol. 18, pp. 357-77. [3] “Responses to Arbitrariness in Contemporary Economics.” History of Political Economy (1997) vol. 29, pp. 273-88. [4] “Novelty, Imitation and Habits in a Scitovskian Model of Consumption” (with Rajiv Sethi). In Marina Bianchi, ed., The Active Consumer: Novelty and Surprise in Consumer Choice ( Routledge, 1998), pp. 198-211. [5] “Rationality.” In Heinz Kurz and Neri Salvadori, eds., Elgar Companion to Classical Economics (Northampton, MA: Edward Elgar, 1998) vol. 2, pp. 256-58. [6] “Utility.” In Heinz Kurz and Neri Salvadori, eds., Elgar Companion to Classical Economics (Northampton, MA: Edward Elgar, 1998) vol. 2, pp. 488-92. [7] “Utility.” In John B. Davis, D. Wade Hands and Uskali Mäki, eds., The Handbook of Economic Methodology (Northhampton, MA: Edward Elgar, 1998), pp. 516-25. [8] “Philip Mirowski as a Historian of Economic Thought.” In Steven G. Medema and Warren J. Samuels, eds., Historians of Economic Thought: The Construction of Disciplinary Memory (Routledge, 2001), pp. 214-227. [9] “Preference Formation and the Axioms of Choice.” Review of Political Economy (2001) vol. 13, pp. 141-59. [10] “Adam Smith’s Sympathy: Towards a Normative Economics.” In Edward Fullbrook, ed., Intersubjectivity in Economics: Agents and Structures (Routledge, 2002), pp. 241-53. [11] “Postwar Neoclassical Microeconomics.” In Warren J. Samuels, Jeff E. Biddle and John B. Davis, eds., Blackwell Companion to the History of Economic Thought (Blackwell, 2003), pp. 377-394 [12] “Deception and Game Theory.” In Caroline Gerschlager, ed., Deception in Markets: An Economic Analysis (Palgrave , 2004), pp. 25-49. [13] “Experimentation, General Equilibrium and Games.” In Philippe Fontaine and Robert J. Leonard, eds., The Experiment in the History of Economics (Routledge, 2005), pp. 50-70. [14] “Pluralism in Economics.” Paper presented at the American Economics Association meeting, Philadelphia, PA, January 8, 2005. [15] "The Sonnenschein-Mantel-Debreu Results after 30 Years." Paper presented at the "Agreement on Demand" conference, Duke University, April 22-24, 2005, and at the History of Economics Society annual meeting, University of Puget Sound, June 24-27, 2005. [16] Poverty, Work and Freedom: Political Economy and the Moral Order, with David P. Levine (Cambridge University Press, 2005).

Research Statement In his Theory of Political Economy (1871), William Stanley Jevons held that “the general form of the laws of economics is the same in the case of individuals and the nations.” For Jevons, there was no problem of combining the actions of individuals to see if the aggregated result resembled the posited individual behavior. He simply asserted his view and did not derive it from the microeconomic theory of individual behavior. Yet his stance persisted in economics. As late as 1939, John Hicks wrote in Value and Capital that the transition from individual to aggregate behavior makes use of the “simple principle…that the behaviour of a group of individuals, or a group of firms, obeys the same laws as the behaviour of a single unit.” Following the demonstration that competitive equilibria exist in economic models, the ambitions of economists changed. From the 1950’s well into the 1980’s, economists tended to agree with statements such as this one by Allan Drazen, who wrote in 1980 that “Explanations of macroeconomic phenomena will be complete only when such explanations are consistent with microeconomic choice theoretic behavior and can be phrased in the language of general equilibrium theory.” We might call this the project of microfoundations: the ambition to derive regularities at the macroeconomic level from assumptions and restrictions made on individual economic behavior. The bulk of my research concerns the growing realization and acceptance of the view that this ambition could not be realized. Many phenomena of macroeconomic interest rely on well-behaved aggregate demand relationships. The form of aggregate excess demands affects the uniqueness, stability and comparative statics of equilibrium; econometric identification of aggregate relationships; the microfoundations of macroeconomics; and the existence of imperfectly competitive general equilibrium. Hugo Sonnenschein, Rolf Mantel, Gérard Debreu and their followers showed in the 1970’s and 1980’s that the aggregate excess demands arising from general equilibrium theory are essentially arbitrary, save for some properties that are enough to prove the existence of equilibrium. These arbitrariness results, which I call SMD theory after the initials of the originators of this line of work, are of great consequence for the understanding and development of economic theory. In a series of publications (numbered at the left), I explore the impact of the SMD results for economic theory and its redirection in the past 20 years. In “Microfoundations Project” [2], I contend that the SMD results allow one to conclude that the attempt to establish macroeconomics on the basis of microfoundations in general equilibrium theory cannot succeed. Other economists also arrived at this conclusion and argued that macroeconomic regularities may have to be based on other macroeconomic constructs, and not strictly on microeconomic foundations, as I relate in “Responses to Arbitrariness” [3]. Indeed, one aspect of the growing realization that progress cannot be made on the basis of general equilibrium theory is that other approaches to economic theory have found resonance with economists. Rational choice game theory is an outstanding example of this transformation in economics although, as I explain in “Game Theory to the Rescue?” [1], it has its own problems. “Deception and Game Theory” [12] updates my views on rational choice game theory, particularly on the knowledge requirements for equilibrium. Experimental economics and evolutionary game theory are other trends that came to prominence as general equilibrium theory declined, as I relate in “Experimentation” [13]. I argue in “Pluralism” [14] that much of the diversity in approaches in economic theory that we observe since the mid-1980’s can be seen as a response to the realization that progress could not be made using general equilibrium theory. These developments have encouraged me to view the trajectory of recent economics historically and to reflect on the historian’s work, as in “Mirowski as a Historian” [8]. In “Postwar Neoclassical Microeconomics” [11], my most synoptic work in this area, I urge that basic difficulties with general equilibrium theory and game theory affect the course of recent microeconomics. I try to bring my views on SMD theory up to date in “Sonnenschein-Mantel-Debreu” [15], where I explain and evaluate recent work by others that argues that those who speak of the ineffectiveness of economic research based on general equilibrium theory have been too sweeping. While I find this recent work to be important and interesting, I contend that the negative conclusions based on SMD theory are substantially unaffected by it. Given that I maintain that the SMD results had an epochal impact on economic theory, I also see the importance of exploring and developing alternatives to the positive and normative views of individual behavior on which general equilibrium theory relies. This represents a second, related area of my research. The behavior of economic agents might be hard to capture with a single utility index. The classical economists seemed to have appreciated this point (“Utility” [6]) and an approach to rationality might follow from their work (“Rationality” [5]). More generally, approaches based on utility-maximizing individuals raise a number of methodological problems (“Utility” [7]). One of these is that if there are a number of influences on the formation of preferences, a single preference- or utility-based index may not be possible, as I demonstrate in “Preference Formation” [9]. A co-author, Rajiv Sethi, and I argue in “Novelty” [4] that a fruitful approach to consumer choice is based on novelty, imitation and habit formation, as was emphasized by Tibor Scitovsky. The complex behavior that ensues is best seen statistically rather than analytically. If the usual model of individual economic behavior is not followed, the evaluation of behavior and its outcomes—normative economics—needs to be reconsidered. I argue in “Adam Smith’s Sympathy” [10] that Adam Smith’s theory of moral sentiments is an important departure for normative economics. I develop a normative theme, the idea of poverty, in joint work with David Levine. Poverty, Work and Freedom [16] explores the issue of what is missing in the lives of the poor. The usual answer is that poverty means lack of subsistence, basic needs or a minimum level of income. We agree that people in dire need should be provided for. But even if minimal requirements could be adequately defined in a modern setting, we argue that a person with only such requirements satisfied would still be impoverished. Rather than identifying poverty with a lack of goods or income, we concur with Amartya Sen and Martha Nussbaum in saying that poverty means not having the capability to live a life that goes well. The contours of such a life are informed by norms, particularly the norm of freedom, as Sen has emphasized. Because of the open-endedness of such a life, we argue that predetermined lists of goods or capabilities cannot help to separate the poor from others. The capacity to deal with this open-endedness is important, and we explore this capacity with the tools of psychology, relying on the work of Donald Winnicott. In focusing on the economic implications of this approach, we examine self-reports of well-being (of which the utility approach has been skeptical) and conclude that the nature of work plays an important role in identifying poverty. Our book thus focuses on the capability to do satisfying work as an important aspect of poverty.

Last updated July 18, 2005