Uncertainty significantly influences healthcare policy decisions, especially regarding lockdown exits during pandemics. This study examines both epidemiological and economic and social uncertainties affecting stay-at-home and essential workers concerning COVID-19 exposure. Using an epidemiological real options model, we assess how these uncertainties impact the timing of lockdown exit decisions. The results indicate that a higher policy-change value lengthens the lockdown delay. A greater shock correlation between stay-at-home and mask-only populations reduces this value, leading to earlier lockdown exits. By conceptually incorporating economic and social pressures, such as income disruption, public fatigue, and policy irreversibility, the model provides a more realistic understanding of the trade-offs faced by decision-makers. These findings bridge the discrepancies between public health recommendations and policymakers’ actions. Integrating options theory enables more informed decision making by considering uncertain risks and outcomes.
This research assesses the impact of remittances and financial development on the size of shadow economy in Africa. Furthermore, the study examines the moderating effect of financial development on the linkages between remittances and the shadow economy. The data set for the study comprises 29 African countries between 2000 and 2020, while Driscoll and Kraay’s non-parametric standard error, fully modified ordinary least squares, augmented mean group, and method of moment quantile regression are used as estimation techniques. The study documents that remittances and financial development lessen the size of shadow economy in Africa. Additionally, the study found no substitute or complementary role of financial development and remittances in influencing the size of the shadow economy. This suggests that financial development and remittances can have separate effects on the size of the shadow economy. The results of other control variables also indicate that economic growth and foreign direct investment reduce the size of the shadow economy while population and institutional quality increase its size. The results of this study are robust to different estimation techniques.
This paper reconstructs the concept of equilibrium in economics, proposing a view centered on scarcity, competition, and transaction cost. Its core thesis is that the essence of equilibrium is a state where interpersonal conflicts of interest are resolved, achieved under constraints through clearly defined criteria of competition. Scarcity induces competition, and competition must occur under specific constraints to determine winners and allocate resources. A state lacking clear criteria – termed “disequilibrium” – cannot persist in the real world. The paper further deconstructs the subjectively labeled “entrepreneurship” as the specific combination of market and non-market contracts chosen by individuals to minimize rent dissipation under given information cost constraints; its essence is an equilibrium outcome. Further, through a case study of the counterfeit goods market, the paper empirically analyzes how information costs influence the marginal substitution process between price, transaction cost, and non-price criteria of competition. This process ultimately achieves a general equilibrium characterized by minimized rent dissipation.
We extend Cheung’s (Cheung, N. S. 1969. The Theory of Share Tenancy . Chicago: University of Chicago Press.) analysis of the consequences of risk and transaction costs for agricultural contract choice by considering the potential for land abuse on the part of the tenant in a dynamic context where the land-abuse decision is linked to the tenant’s decision to renew the contract. By offering appropriate share contracts, landlords can incentivize contract renewal, thereby both lowering the incentive for land abuse and preserving the tenant’s land-specific human capital. In our model, tenants decide each period whether to terminate their contracts and abuse landlord-owned assets based on prior and updated beliefs about the likelihood of bad seasons. Share contracts are shown to be more likely than lease contracts to survive one or more bad harvests.
In studies of Comparative Economic Systems, the traditional paradigm to view system-choice of a country on a linear scale of State versus Markets needs to be extended to a Triangular Institution System-choice problem (TISP). Intergeneration capital is introduced as the basis to grow locational based social capital that will evolve to have the characteristics defining a community (ISC). Essentially, a system-choice problem entails choosing the lowest transaction cost method of facilitating public goods, private goods, and intergeneration goods. (Rajan, Raghuram. 2019. The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan. London: Penguin Press) is useful to build a framework embedding Schumpeterian insights for this analysis, involving an implicit exchange between State, Markets, and Community. While exit-voice and loyalty can help communities to self-select the forming of a community, there are transaction costs in shaping a particular pillar depending on the country and the community being studied. The approach restated a proposition of (Cheung, Steven N. S. 2020. “On a Fallacy in the Coase Theorem and the Theorem of Transaction Costs Substitution.” Man and the Economy 2020) on transaction costs substitution, with the objective not limiting to gain from trade, but establishing win-win-win for sustainable development. In terms of visible embodiment of abstract ideas, for every State , there is a flag. As much as Markets are embodied in many shopping malls today, sustainable development has been incorporated in many private Community developments. It leaves an open question on who and how best to fix dying communities, or even that they need fixing at all.
This paper reinterprets the rise and demise of foot binding in ancient China from the perspective of transaction cost and contract theory, highlighting that foot binding emerged as a form of non-market contract. Since individual property rights among female family members in extended families cannot be clearly defined before separation, they compete with each other through non-price criteria, specifically foot binding, to lower information and supervision costs when defining property rights in the future. In this process, foot binding has become a contractual arrangement that constrained competition between wives and concubines, helping family members maintain a relatively stable distribution of internal rights. However, as the ancient Chinese family system disintegrated and the costs of information and supervision declined, the practice of foot binding gradually set on a path of decline and eventual disappearance. Furthermore, this paper not only exposes the shortcomings of game theory and new institutional economics through the development of a non-market contract theory but also critiques existing research that merely views footbinding as a sociocultural or labor phenomenon by reviewing relevant literature and historical data.
The development of artificial intelligence has led some people to hold overly optimistic views, believing that it will soon replace humans as the intellectual dominator, even supplanting the spontaneous order that humans have followed due to “rational inadequacies.” However, some philosophers and economists have long pointed out that spontaneous order is something that human rationality and sensibility cannot fully comprehend. Just because humans have succeeded in understanding simple systems does not mean that the same methods can be applied to complex systems. Research by mathematicians on computational complexity and computability shows that there is a class of problems (NP) that are very difficult to solve, and many problems in real-world complex systems are even harder than NP problems. Thus, NP-hard problems serve as a mathematical expression of the “difficulty in understanding complex systems.” Since artificial intelligence relies on computer computation, and there exists a large class of problems that are difficult or impossible to compute, general artificial intelligence cannot be realized and cannot replace spontaneous order – a problem that is much harder than NP problems. Humans gradually discover spontaneous order through random exploration – a form of brute-force search – relying on two abilities: the capacity to judge the superiority of one choice over another and the motivation to explore. Because human utility is a complex combination of various sensory and psychological cultural factors, its complexity far exceeds that of NP problems. Therefore, artificial intelligence cannot simulate human utility and thus cannot replicate the human methods of discovering spontaneous order.
Under Chinese anti-monopoly law, large platforms are forbidden to use exclusive contracts to prevent online shops from doing business with competing platforms. The alleged purpose of the law is to promote competition among the platforms, for it is widely believed that large platforms are able to eliminate competition with exclusive contracts and gain monopoly profits. However, we argue that exclusive contracts are probably used for protecting the investment of the platforms; that the platform, online shops and the competing platforms tend to allocate resources efficiently. If the exclusive contract is used inefficiently, the platform would bear extra costs and its economic strength and competitiveness would be weakened, and the exclusive contract will be difficult to sustain. It is unlikely that platforms with “market dominance” are able to use exclusive contracts to eliminate competition. Cursory banning of exclusive contract could put “freedom of contract” and private property rights at risk.
Abstract Motivated by the need to achieve a sustainable environment as entrenched in the Sustainable Development Goals and the conflicting evidence in the literature, this study scrutinises the effect of different components of globalisation on the environmental degradation of West African nations within the Environmental Kuznets Curve framework. Fully modified ordinary least squares, dynamic ordinary least squares, and the method of moments quantile regression of Machado and Silva (2019) are deployed as the estimation techniques. In the panel, cross-sectional dependence and non-normality are established. The findings from the quantile regression reveal a significant positive impact of economic growth on environmental degradation. The square of economic growth has an insignificant negative influence on environmental degradation. Thus, the EKC hypothesis is not valid in West African nations. Aggregate globalisation significantly influences environmental degradation, while economic and political globalisation significantly negatively impacts environmental degradation across the quantiles. However, social globalisation negatively impacts environmental degradation at a lower quantile (10–50 %), while at a higher quantile, the impact is positive. Natural resources significantly affect environmental degradation, while energy consumption in the region benefits the environment. Nevertheless, urbanisation has a different impact on environmental degradation in the area. The results of these studies are robust to other methods of estimation. The implications of the study are discussed.
The Coase doctrine is generally presented as a static theorem that seeks to model the spontaneous correction of market failures through agreements made by the affected parties. However, according to the theorem as generally formulated, especially by Stigler, these results are only achieved under the questionable assumptions that transaction costs are null, property rights are well-defined, and the distribution of the benefit of the agreements does not affect the outcome. The lack of relevance of those assumptions has unfortunately resulted in the fruitless application of the statist theory of market failures as promulgated by Pigou. However, the spectacular progress of the Chinese economy after Mao, as analyzed by Ronald Coase and Ning Wang (2012), seems to have taken place without conforming at all to the propositions of that theorem. A Coase doctrine will be defined that better explains that extraordinary transformation.
The condition of “defining property rights” in Coase Theorem is actually the key method to solve the external infringement problems such as air pollution. It changes the public nature of external infringement into private nature. Because the cost of trading private goods is much lower than that of public goods, it will greatly simplify the solution of air pollution and other problems. The primary reason why emissions trading has achieved some success is that emission quotas define the property rights (or responsibilities) among emitters. This turns public externalities into private externalities, and subsequently forms protected and tradable private property rights. As the total amount and quota of emissions still have to be arranged by the emission regulatory authorities, emissions trading has not completely got rid of the government’s intervention. Therefore, this paper suggests that all emission quotas should be given to all residents in the world, and each of them has an equal share of emission quotas, which can be traded in the online global carbon emission market, and emitters can buy emission quotas in the market. In this way, the value of reducing carbon emissions for everyone can be evaluated more accurately, and the deadlock between countries can be broken, so that the cause of reducing carbon emissions can have a great development.
Abstract When human ancestors preferred to eat less and did not want to abandon their old parents in the mountains, they did something that violated the previous natural laws; that is, after the task of giving birth and raising children, they should no longer waste valuable resources. However, this brought unexpected results. Older parents can take care of their grandchildren, making families with grandmothers have more children than families without grandmothers. Therefore, filial piety may be the main reason why human beings stand out from the apes. Doing things without utilitarian motives but that may have lasting utilitarian results and recognizing the relationship between the results and the behaviors) is an important characteristic of this kind of filial piety that occurs and persists. Culture is something that transcends today’s utilitarianism, is willing to pay for the value of emotion, aesthetics and morality, and, ultimately, has utilitarian results. This trait has always been accompanied by human development as a human cultural gene.
Abstract The transformation of China can be understood as a process of interaction between economic growth and national governance. Given that scientific technology and transaction costs are dominant factors affecting wealth accumulation, the control of transaction costs was the focus of China’s national governance in the premodern history of an agrarian-dominated economy with slow technological progress. China was the world’s most prosperous country thanks to the reduction of transaction costs through a family-based economy lacking property rights, a political structure of the family state, and an ethics-based social governance without law and jurisprudence. However, breakthroughs and progress in science and technology from Western countries brought subversive changes to the comprehensive strength of China. China was forced to transform. To take advantage of advances in science and technology and rapidly accumulate wealth, China moved from delineating human rights to delineating property rights as the main competition-restricting mechanism. The former hierarchical system and its ethics were replaced by a legal system that treated all people fundamentally equally. The revolution accelerated this change by abolishing inelastic customs and ethics that hindered modernization. Paradoxically, the Chinese Communist Party, as the main group that led the revolution, created a functioning system with a human rights structure of horizontal equality and vertical hierarchy for organization and mobilization that has allowed contemporary China to balance reform, development and stability.
