Hartmut Kliemt

• Frankfurt School of Finance & Management

Hayek and Buchanan endorsed Böhm's “private law society” as expressive of the ideal of a government of laws, and not of men . But they also acknowledged that among the many, the enforceability of legal custom, adjudication, and legislation must be politically guaranteed by a state. Due to unavoidable state‐involvement, risks of excessive rent‐seeki...

Value-neutral (Robbinsian) economic science cannot directly address substantive normative issues. Economics can, however, provide analytical and empirical methods that make implications and consequences of normative premises (more) transparent and thereby indirectly contribute to normative opinion formation. To this effect, we translate substantive...

Buchanan, Sugden and Vanberg claim that constitutional political economics should conceptualize ‘politics as exchange’. Since this theoretical conceptualization is not true in fact the underlying universalist perspective of ‘normative individualism’ needs to be imposed by the theorist contrary to the value-neutrality requirement of economics as a s...

This paper in honor of Hans Albert ‘@100’ seeks to show how adhering to critical rationalist ‘economic philosophy’ avoids contradictions in James Buchanan’s contractarianism: restricting constitutional economic advice to what serves the ends of all potential addressees simultaneously Buchanan not only blurs the borderline between value-neutral econ...

Starting from a behavioural-economics critique of standard rational choice theory Sugden seeks to restate the case for classical liberalism. That case has three strands: a refutation of libertarian paternalism; a restatement of standard welfare theorems of economics in terms of opportunity sets; and underlining the role that ‘exchange’ plays in sup...

Much of the success of the Rational Choice Theory, RCT, approach to human behavior is due to interpreting the so-called Folk theorem of game theory as explaining how the so-called Hobbesian problem of social order can be solved among opportunity-seeking rational actors. However, taking future directedness of rationality seriously, RCT may not at al...

Rejecting all knowledge claims concerning right and wrong in matters practical James Buchanan concurred with legal positivism that invalid law cannot be identified by its substantive content but only by an inherited defect in its factual creation. Beyond correct creation Buchanan proposed as a quasi-natural law constraint that unanimity in the shad...

Die Bedeutung des kritischen Rationalismus für die Entwicklung vornehmlich der deutschsprachigen Nachkriegswirtschaftswissenschaften wird diskutiert. Die kritisch-rationalistische These von der einheitlichen nomologischen Ausrichtung aller Realwissenschaften wird mit Reinhard Seltens „methodologischem Dualismus“ einerseits und der Rolle unrealistis...

In Buchanan’s broad “constitutional contractarian” framework ultimate justification depends on the institutional arrangements under assessment being universally accepted (that is, not subject to veto by any of the relevant parties, all of whom possess a right of veto). Accordingly, market arrangements (the definition of rights, and rules about thei...

Whenever certain axioms are fulfilled decision-making under uncertainty can be modeled as if maximizing the expected utility of results of risky choices over a known state space with non-ambiguous probability weights. As opposed to this, practically coping with ever new uncertainties—new in that statistical, empirical evidence is lacking—requires a...

Bruno Frey’s effort to provoke a discussion on the future of democracy seems as timely as his focus on direct democracy is appropriate. Since in his account the necessity of protecting individuals against democratic collective powers seems somewhat neglected this comment emphasizes that the democratic theory of the Calculus of Consent is—in a way—a...

Bloomington scholars are critical of the rather wide-spread "Model Platonism" of both Austrian and Chicago economists. Their empirical, B, perspective avoids the more extreme views of both Austrian "mindful economics," A, and Chicago "mindless economics," C. Yet the B is not a mere convex combination of A and C.. It is rather a psychologically grou...

In her article "Rule of Rescue vs. Rescue of statistical lives" [1] Weyma Lübbe elevates gut feelings supporting the "rule of rescue" to "civic judgments". Without doubt in a constitutional democracy ultimately the judgments and aspirations of citizens must be decisive. Yet, particularly in the field of health policy, the bias to overemphasize what...

Mit der Gründung der Zeitschrift The Journal of Law and Economics im Jahr 1958 hatte sich die neuere ›ökonomische Theorie des Rechts‹ endgültig als Spezialdisziplin etabliert. Im gleichen Jahr schloss sich Ronald Coase der University of Virginia, UVA, Charlottesville an (bis 1964). Am dortigen Economics Department wirkte bereits (seit 1956) James M...

Economic Sense and Nonsense comprises a collection of sixty essays written by Anthony de Jasay for his monthly column “Reflections from Europe,” on Liberty Fund’s Library of Economics and Liberty website. The articles span the years 2008 to 2012 and focus on economic issues of topical concern in Europe. In this collection Jasay continues his explor...

Hartmut Kliemt reflects on James M. Buchanan's classical- liberal views. Buchanan made the simple point that the actors in a game can make choices regarding actions only. The choices are not choices among the outcomes of the game. The outcomes emerge. They are objects of individual evaluation and ranking, but not of individual choice making. Which...

Die Verhaltensökonomie und ihre praktischen Implikationen geraten immer stärker in den Fokus auch der deutschen Politik. Individuelle Entscheidungen sollen im Sinne eines „libertären Paternalismus“ „sanft“ beeinflusst werden. Die „Nudges“ bestehen in Standardvorgaben, Selbstbindungen und der Informationsbereitstellung. Deren Anwendung setzt allerdi...

Most German economists show strong patterns of professional specialisation. In their work, they either focus on basic research or on policy consultancy. The evidence provided by Haucap und Mödl has been used to question work incentives in academia. The suggestion to change work incentives, however, is not supported by Richter, who rather calls into...

Thomas Hobbes formulierte die erste „ökonomische Theorie“ der Rechts- und Staatsordnung. Ihr liegt eine konsequente Anwendung des Modells eines homo oeconomicus auf alle Fragen menschlichen Verhaltens und damit eine frühe Variante des ökonomischen Imperialismus zugrunde (vgl. auch Kliemt 1992). Wie noch heute manche neo-klassischen Ökonomen sucht H...

This paper reconstructs how Buchanan himself answers his question “what should economists do?” The way Buchanan tries to stir a middle course between the extremes of an a priori logic of human action and economic behaviorism is sketched as broadly Kantian. Other than a conventional Kantian, Buchanan's game theoretically inspired “dual worlds”-appro...

"We now consider the possibility of "designing cooperation," just as engineers have been concerned with the problem of designing electric switches. We are very much at this stage of basic research, more physics than real engineering, but I want to argue that our success has been real, and I want to emphasize that this achievement has been at the ve...

„Machtausübung mit gutem Gewissen“ ist für viele Ärzte, ohne dass sie sich das gewöhnlich selbst eingestehen würden, eine der Attraktionen ihres Berufes. Schon die Tatsache, dass der Patient behandelt wird, versetzt den Arzt in eine gegenüber dem Patienten überlegene Position. Das überlegene Expertenwissen des Arztes tut ein Übriges. Asymmetrien ke...

In populären Auseinandersetzungen um die Gesundheitsversorgung wird – nicht zuletzt von Ärzten – immer noch gefordert, dass man die Ressourcenallokation dem Urteil der behandelnden Ärzte überlassen solle. Die Ärzte würden durch „verantwortungsvolle“ Orientierung am medizinisch „notwendigen und nützlichen“ den Ressourceneinsatz „angemessen“ begrenze...

Unanimous voting as the fundamental procedural source of political legitimacy grants veto power to each individual. We present an axiomatic characterization of a class of bidding processes to spell out the underlying egalitarian values for collective projects of a "productive state". At heart of such procedures is the determination of payments for...

Contrary to the conventional view that rationing is tantamount to „withholding“ rationing must be understood as a process of „giving“ at „prices“ below the recipients’ willingness or ability to pay at the moment of assignment. Rationing is neither throughout a „bad“ nor is it to be found merely in the public sphere - a private HMO contract concerns...

Conceptualizing behavior decision theoretically as being 'pulled' (by an expected future) is fundamentally different from conceptualizing it as 'pushed' (or determined by past conditions according to causal laws). However, the fundamental distinction between teleological and non-teleological explanations not withstanding, decision-theoretic and evo...

Game and decision theory start from rather strong premises. Preferences, represented by utilities, beliefs represented by probabilities, common knowledge and symmetric rationality as background assumptions are treated as “given.” A richer language enabling us to capture the process leading to what is “given” seems superior to the stenography of dec...

When commenting on Vernon Smith's inspiring paper, we first argue that game theory in its "reasoning about knowledge" tradition is not truly behavioral and try to categorize different approaches. We then go on by considering specific topics, discussed by Vernon Smith, before concluding with some methodological reflections.

This volume is a unique contribution to the philosophy of the social sciences, presenting the results of cutting-edge philosophers' research alongside critical discussions by practicing social scientists. The book is motivated by the view that the philosophy of the social sciences cannot ignore the specific scientific practices according to which s...

Retributive responses do play a role in human behavior. Whether they are primarily triggered by supposed intentions or by observed consequences of actions is an important question. It can be addressed by experimental studies of retributive responses in situations in which the individual actor may inflict harmful consequences without intending and i...

Looking at the world through the window of opportunity costs directs attention to the good forgone rather than the good done by our decision making. In the paper it is illustrated by means of several examples that it may be useful for judicial decision makers to be better aware of this aspect of their choices. When they decide in favor of the reali...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

Relying on the specific example of ultimatum bargaining experiments this paper explores the possible role of empirical knowledge of behavioural "norm(ative) facts" within the search for (W)RE – (Wide) Reflective Equilibria on normative issues. Assuming that "pro-social" behaviour "reveals" moral orientations, it is argued that these "norm-facts"...

During the last three decades the ascent of behavioral economics clearly helped to bring down artificial disciplinary boundaries between psychology and economics. Noting that behavioral economics seems still under the spell of the rational choice tradition - and, indirectly, of behaviorism - we scrutinize in an exemplary manner how the development...

The report argues that aid volatility is an important source of volatility for the poorest countries. Following a method already applied by the Agence Française de Développement, the report argues that loans to LICs should incorporate a floating grace period, which the country could draw upon when hit by a shock. The definition of a shock should in...

The ascent of public choice theory2, including the public choice society and its journal, is clearly one of the great success stories of post-war social and political theory. Nevertheless, to look at it from the point of view of philosophy poses a task of critical appraisal rather than uncritical applause. Public choice theory as interpreted here e...

Relying on the specific example of ultimatum bargaining experiments this paper explores the possible role of empirical knowledge of behavioural "norm(ative) facts" within the search for (W)RE -- (Wide) Reflective Equilibria on normative issues. Assuming that "pro-social" behaviour "reveals" moral orientations, it is argued that these "norm-facts" c...

Human decision making is a process guided by different and partly competing motivations that can each dominate behavior and lead to different effects depending on strength and circumstances. "Over-stylizing" neglects such competing concerns and context-dependence, although it facilitates the emergence of elaborate general theories. We illustrate by...

Anthony de Jasay's work has been enormously influential, describing both a theoretical philosophical model for a stateless, liberal, free market order and offering analysis of and solutions to many of the technical economic problems associated with such a vision of society - most notably his work on the free rider and his return. In this book ten s...

Once the invention of the state is made, the question of controlling it arises.2 Taking recourse to controllers the ancient problem of controlling those who are in control emerges: ‘Quis custodiet ipsos custodes?’ (who will guard the guardians?). As far as this is concerned democratic self-rule has been and is often still regarded as a way out: sel...

Though the social choice of social institutions or social results is impossible - there is, strictly speaking, no social choice - individual evaluations of social institutions or results trivially are possible. Such individual evaluations can be deemed liberal either because they emphasize political institutions that embody liberal values (politica...

There is an increasing shortage of human organ transplants in Germany. This paper aims at understanding the reasons for that shortage and discusses various ways to alleviate it by changing the rules of donation and procurement. In particular we consider creating adequate incentives for hospitals and individual donors to participate in the process....

There is an increasing shortage of human organ transplants in Germany. This paper aims at understanding the reasons for that shortage and discusses various ways to alleviate it by changing the rules of donation and procurement. In particular we consider creating adequate incentives for hospitals and individual donors to participate in the process....

Standard economic explanations of good conduct in trade rely almost exclusively on future-directed extrinsic motivations induced by material incentives. But intrinsic motives to behave trustworthily and to punish untrustworthiness do support trade. In our model, intrinsically motivated players are aware of their own type and observe the population...

There is an increasing shortage of human organ transplants in Germany. This paper aims at understanding the reasons for that shortage and discusses various ways to alleviate it by changing the rules of donation and procurement. In particular we consider creating adequate incentives for hospitals and individual donors to participate in the process....

Standard economic explanations of good conduct in trade rely almost exclusively on future-directed extrinsic motivations induced by material incentives. But intrinsic motives to behave trustworthy and to punish untrustworthiness do support trade. In our model, intrinsically motivated players are aware of their own type and observe the population sh...

”For he that performeth first, has no assurance the other will performe after; because the bonds of words are too weak to bridle men's ambition, avarice, anger, and other Passions, without the feare of some coercive Power; which in the condition of meer Nature, where all men are equall, and judges of the justness of their own fears cannot possibly...

If the (un)trustworthy are rare, people will talk about them, making their detection more reliable and/or less costly. When, however, both types appear in large numbers, detecting (un)trustworthiness will become considerably more difficult and possibly too costly to provide a positive feedback supporting preferences underlying trustworthy behavior....

Can a court system conceivably control opportunistic behavior if judges are selected from the same population as ordinary citizens and thus are no better than "the rest of us"? This paper provides a new and, as we claim, quite profound "rational choice" answer to that unsolved riddle. Adopting an indirect evolutionary approach with endogenous prefe...

It is argued that a truly Humean approach to social interaction and to normative reflection on how we should interact needs to get even closer to the facts than the Binmore program suggests. In view of the facts Binmore’s normative conclusions on bargaining as well as on the nature of the equilibria of the game of life both seem precarious.

The public good provided by public health care is not the maintenance of citizens' health but rather the maintenance of the legal order and the citizens' support for it. Several policy proposals for achieving the aim of supporting the rule of law by minimal means of public health care provision are explored. A system of assigning limited amounts of...

In standard rational choice modelling decisions are made according to given information and preferences. In the model presented here the 'information technology' of individual decision makers as well as their preferences evolve in a dynamic process. In this process decisions are made rationally by players who differ in their informational as well a...

Medical doctors act as agents of their patients by either treating them directly or referring them to other more or differently specialized doctors, who thereby become "agents of agents". The main aim of this paper is to model central aspects of such two-layered agency relations in the medical sector. On the basis of our model, we draw some tentati...

Considerations of prudence as well as of legitimacy suggest that public health care should aim at supporting rule of law and the liberal legal order rather than public health. Once this shift of perspective is accomplished there is a systematic rationale for including health care guarantees to rescue concrete rather than statistical lives and not t...

Der Mangel an Spenderorganen in der Transplantationsmedizin ist ein Thema von hoher gesellschaftlicher Relevanz. Da jedes Jahr in Deutschland nahezu 1.000 Patienten auf der Warteliste sterben und etwa 12.000 Patienten auf der Warteliste teilweise grosses Leid ertragen, darf die Gesellschaft den Organmangel nicht ignorieren, sondern muss immer wiede...