Diminished-Dimensional Political Economy

Ronald Harstad and Reinhard Selten

No 1414, Working Papers from Department of Economics, University of Missouri

Abstract: Economists' policy advice is based on models of responses by a variety of economic entities to policy adoptions. There is compelling evidence that these entities do not optimize in at all the fashion that mainstream economics assumes. Rather, they limit decision-making to solving problems of much smaller dimensionality. We consider how political economy goes awry when ignoring diminished dimensionality, and some research avenues opened up by this realization.

Keywords: political economy; policy advice; problem complexity; dimensionality (search for similar items in EconPapers)
JEL-codes: B41 D6 H11 H42 (search for similar items in EconPapers)
Pages: 8 pgs.
Date: 2014-08-06
New Economics Papers: this item is included in nep-cdm, nep-ger, nep-hme, nep-hpe and nep-pol
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Journal Article: Diminished-dimensional political economy (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:umc:wpaper:1414

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