By incorporating a divided self into the rational addiction framework, this paper provides a rationale for and an explicit analysis of two types of budget-shrinking behaviors - actions taken to limit access to lifetime wealth in a given period, and actions taken to change the effective price of...

Vernon Smith (2008) argues that his experimental work is a demonstration of Friedrich Hayek's ‘ecological rationalism'. This assertion is difficult to square with Hayek's apparent dismissal of the possibility of demonstrating ‘ecological rationality' in a laboratory (documented in Smith...

The gap between the economic theory of action and the practical reality of choice (analyzed in the Aristotelian practical wisdom tradition) cannot be bridged through the development of more complex models. This poses a challenge for the use of economic models for policy analysis: they cannot...

Economists overlook an ally in the Aristotelian tradition, since both economics and Aristotle begin their analysis with human choice. Economics can learn much about its limits from the Aristotelian tradition, which describes aspects of choice behavior which cannot be precisely modeled. This...

This paper attempts to explain high rates of immigrant self-employment, relative to native workers. Three hypotheses are tested. Estimates of a two-sector model of earnings support the home-country self-employment hypothesis: immigrants from countries with larger self-employed sectors have...