Diminished-dimensional political economy

Ronald Harstad and Reinhard Selten

European Economic Review, 2016, vol. 83, issue C, 213-219

Abstract: Economists base policy advice on models of responses by a variety of economic entities to policy adoptions. There is compelling evidence that these entities do not optimize as 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; Modeling economic policy impacts; Dimensional size of mathematical problems (search for similar items in EconPapers)
JEL-codes: B41 C60 D01 H10 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Working Paper: Diminished-Dimensional Political Economy (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:83:y:2016:i:c:p:213-219

DOI: 10.1016/j.euroecorev.2015.08.006

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