Frank Knight's theory of monopoly price has received relatively little attention in the literature on Risk, Uncertainty and Profit. We argue that Knight accepted and refined the monopoly price theory of Carl Menger and his followers. Knight highlights the difference between monopoly as an inevitable outcome of departures from perfect competition, and monopoly as a contingent or ‘culture-history fact’. In the latter case, coercive institutional barriers to potential competition shape the choice set of consumers and producers, and provide a crucial method for identifying monopoly gains. There are three benefits to this account of Knight's contributions: it rehabilitates the focus on the institutional determinants of monopoly price, as opposed to the mainstream emphasis on market frictions and imperfections; it opens the way for a Mengerian monopoly price theory that seriously engages the study of institutions; and it adds new evidence and nuance to ongoing debates about Knight's place in economics.

The paper examines doctrinal and political reasons to explain why the Ancient Greek religion did not feature a distinct class of professional priests as suppliers of religious goods. Doctrinal reasons relate to worshiping a multitude of powerful anthropomorphic gods with flawed characters; absence of a founder of religion and of a scripture; lack of religious doctrine and of a code of moral behaviour and piety manifested as mass participation in rituals. These factors denied religious suppliers the opportunity to form a monopoly acting as an autonomous intermediary between humans and gods. Political reasons relate to the supremacy of the demos which watchfully guarded its decision-making powers and prevented other actors like a priestly interest group to challenge its authority.

The ancient Greek city-states were slave societies, but the institutions of slavery differed across them. The slaves of democratic Athens were foreigners bought as chattels labouring in agriculture, craftsmanship, banking, mining, and domestic services and were often given some limited freedoms and extra pay. On the contrary, the helots, the slaves of oligarchic Sparta, were indigenous of the lands they cultivated for their masters and were treated harshly. The study offers an economic explanation of the different slavery systems. Modelling the slaveholder as a profit maximiser, it attributes the different systems to differences in the probabilities of the slaves running away or revolting, the dependence of output on effort-intensive or care-intensive production technology, which depends on the fertility of the soil and affects whether the slave is treated kindly instead of harshly, and the cost of guarding slaves under different regimes.

In a recent article Wilson explores the origins and explanation of ownership (property) as a custom, and argues that the custom of ownership is the primary concept and that property rights are subordinated to ownership. I argue that Wilson's subordination argument is unpersuasive; the linguistic evidence used by Wilson fits better with the concept of possession; and ownership is not a human universal.

This paper introduces Aristotle's conception of agency, habits and institutions as a way of contributing to some current discussions about the definition, nature and theory of institutions. Aristotle developed a theory of human action, where we can find a place for ‘agency’. His views on habits are linked to his theory of virtue and art (skill). Concerning institutions, Aristotle provides a sound social and political philosophy that encompasses the nature and role of institutions. The paper will subsequently present Aristotle's ideas on these three notions – agency, habits and institutions – and will finally establish which of the current accounts of institutions involved in the discussion sparked by Hindriks and Guala's recent paper (2005a) he would support. Given that some realities tackled in the paper are nowadays radically different from Aristotle's times, the paper tries to keep an ‘Aristotelian-minded’ point of view – that is, analysing current topics based on Aristotelian concepts.

This paper aims at analyzing the interaction between both economic and sociological notions of convention. To this end, it starts by distinguishing conceptually between specific convention, i.e. an arbitrary but stable social regularity, and general convention, i.e. a principle of action prescribing how to behave in a certain class of situations. A game theoretical framework to represent the interrelation between both concepts is then introduced. Finally, this relation is studied experimentally. The main results of the experiment are: (1) general conventions have to be commonly known and adopted among subjects in order to work as guides to coordinate on specific conventions; (2) once subjects follow a general convention they are highly consistent with it in a repeated environment; (3) efficiency concerns are focal in the class of games studied in this paper.

This paper replies to Hodgson (2019), which responds to my analysis and critique in O'Donnell (2018). My present aim is clarification of our respective positions, our agreements and disagreements, and their underlying causes. To this end, I elaborate further on the logic underpinning my initial paper, comment on several (not all) key points in Hodgson's response, and conclude with the matter of our different agendas. Space limitations preclude fuller discussion and encourage concise expression.

We assess informal institutions of Protestants and Catholics by investigating their economic resilience in a natural experiment. The First World War constitutes an exogenous shock to living standards since the duration and intensity of the war exceeded all expectations. We assess the ability of Protestant and Catholic communities to cope with increasing food prices and wartime black markets. Literature based on Weber (1904, 1905) suggests that Protestants must be more resilient than their Catholic peers. Using individual height data on some 2,800 Germans to assess levels of malnutrition during the war, we find that living standards for both Protestants and Catholics declined; however, the decrease of Catholics’ height was disproportionately large. Our empirical analysis finds a large statistically significant difference between Protestants and Catholics for the 1915–19 birth cohort, and we argue that this height gap cannot be attributed to socioeconomic background and fertility alone.

The article traces the remains of the theory of “comparative institutional advantage”, which was crucial during the early development of the “varieties of capitalism” approach to economics but fell into oblivion quickly afterwards. It follows the discussions of the concept over time and works out possible reasons – theoretical, methodological, and discursive – for the theory's decay. In conclusion, many arguments of the theory seem outdated today but it is a great witness to the zeitgeist of comparative political economy and institutional theory of the millennium.

This paper investigates what drives countries to legislate presumed consent – making citizens organ donors by default unless they opt out – instead of explicit consent. Results reveal the following: First, civil law predicts presumed consent, which uncovers a mechanism by which an institution that long pre-dates transplantation medicine has an impact on current health outcomes. This is in line with previous research that has found that civil law regimes tend to be more comfortable with a centralized and activist government than common law ones. Second, Catholicism predicts presumed consent. This is consistent with previous research that shows Catholicism generally relies on more hierarchical structures and is less likely to encourage social responsibility among its members. Last, higher pro-social behavior decreases the likelihood of presumed consent. This could be explained by policy-makers trying not to discourage donations where pro-social behavior is high by making it look a requirement rather than an altruistic act. The implications of the findings are discussed, with a particular focus on policy-switches in organ donations.

We investigate the impact of professional networks on men's and women's earnings, using a dataset of European and North American executives. The size of an individual's network of influential former colleagues has a large positive association with remuneration, with an elasticity of around 21%. However, controlling for unobserved heterogeneity using various fixed effects as well as a placebo technique, we find that the real causal impact of networks is barely positive for men and significantly lower for women. We provide suggestive evidence indicating that the apparent discrimination against women is due to two factors: first, both men and women are helped more by own-gender than other-gender connections, and men have more of these than women do. Second, a subset of employers we identify as ‘female friendly firms’ recruit more women but reward networks less than other firms.

We examine the effect of corruption control on efficiency and its implications for efficiency spillovers by a stochastic frontier model. Our dataset covers 102 countries from 1996 to 2014. We find a positive relationship between corruption control and efficiency. If neighboring countries have difficulty in handling corruption, the country would be negatively affected by its neighbors' corruption through efficiency spillovers. We then compare the efficiency differences across countries for three time periods: 1996–2002, 2002–2008, and 2008–2014. On average, technical efficiencies slightly increased in the second period compared to the first period. In the third period, the efficiencies declined, particularly in China.

We applaud the effort of Schubert and Cordes (2013, this journal) to contribute a model describing the social mediation of preferences and to apply their results to the more general context of economic welfare. Although we consider this topic to be of utmost importance and interest, we have found a problem in Schubert and Cordes’ argument that renders their statements in Section 3 invalid. After providing some basic intuition on the problem at hand, we present a short proof showing that the assumptions of the model always lead to a stable society. We also report on an interesting non-linear segregation effect that can occur within the Schubert-Cordes model.

Social contract theory depicts a constitutional contract as the result of a hypothetical agreement among society's members to escape a prisoners' dilemma situation. It depicts citizens as political equals agreeing to be forced into a cooperative strategy rather than a socially suboptimal strategy that gives them the highest personal payoff. Government is the organization that forces everyone to cooperate. However, citizens can never bargain as political equals. An elite few design the rules, and others are forced to comply with them. The contractarian ideology that depicts government as acting in the general public interest legitimizes the actions of government, giving those elite few who hold government power a greater ability to use it to further their own interests, often at the expense of the masses. Within the context of a prisoners' dilemma game, contractarian ideology leads to an outcome that is socially suboptimal, but beneficial for the political elite.

With the beginning of the Napoleonic war at the turn of the 19th century, capitalist transformation in the German states and in the Habsburg Empire took different routes. The article analyses the political economy of both types of ‘defensive modernization’ from the viewpoint of institutional economics. We argue that initial reforms in German states gave way to a transformation process which drove a wedge between the interest of the monarchs and the landed nobility. Liberal reformers established a political bargain with the nobility which made capitalist institutions acceptable for the power holders. Later on, reformers established a ‘market preserving federalism’ which gave capitalism a further boost. By contrast, the dependence of the Austrian Emperor on the multiethnic nobility weakened the power of the central state. The transformation process in the Habsburg Empire remained dependent on the personal interests of the dominant coalition, which either delayed capitalism or sought to combine capitalism with protectionism on its own behalf. As a result, capitalist dynamics took up speed in Germany but were delayed in Austria.

The implications of Knightian uncertainty are frequently discussed in the context of market-based institutional settings. Given money prices, entrepreneurs can engage in calculative action, in conjunction with ‘judgment’, to guide decision-making and bring about a coordination of production plans with consumer preferences. However, if the existence of Knightian uncertainty is ubiquitous and applies to all human action, then what are its implications in non-market institutional settings? This paper explores questions related to the implications of Knightian uncertainty for two important non-market institutional settings: democratic government and the nonprofit or philanthropic sector, where there is an explicit lack of monetary calculation, yet nonprofit and political entrepreneurs still must use ‘judgment’ to deal with Knightian uncertainty. For instance, what are the implications of private property and privatized cost in the case of nonprofits versus the absence of private property and socialized cost in the case of democracy, in the presence of Knightian uncertainty? Which group of ‘consumers’ is likely to have their preferences satisfied when it comes to nonprofits (benefactors or beneficiaries) and democratic government (voters or lobbyists)? The paper, thus, points to the importance of further research on the implications of Knightian uncertainty in the hard case of non-market institutional settings.

Ronald Coase had a profound impact on scholarship worldwide, and not for his ideas alone. Coase's ideas about transaction costs, the nature of the firm, the role of government, and the problem of social cost have been hugely influential. Throughout his long life, he also worked to change the conduct of economics, urging economists to ground their conclusions in careful study of empirical reality rather than theories that work only on the blackboard. Less well known, perhaps, is his work to nurture and shape the emerging fields of law and economics and new institutional economics, or his support to young scholars studying institutional issues around the world. In his final years, he was preoccupied by the rapid transformation of China and the institutional structure of production. This article summarizes Coase's significant intellectual contributions to economics, pointing out along the way some of the traits that made him such a powerful thinker and exceptionally influential scholar.

The article briefly introduces Hans Albert and the basic elements of his critique of neoclassical economics as a form of ‘model Platonism’. The two most important elements of his general methodological critique of economics – namely the institutional vacuum inherent in much economic modelling and its unrealistic assumptions about behaviour – are introduced. It is argued that these specific critiques have been taken up with varying degrees of success in areas of economic research such as institutional economics and in behavioural and experimental research programmes. However, the fundamental methodological gist of his critique remains as pertinent to mainstream economics as it was when originally formulated. The influence of ‘model Platonic’ thinking remains pervasive in academia and also in public policy.

In this paper I consider the implications of work in evolutionary psychology for institutional analysis. I respond to Pascal Boyer and Michael Bang Petersen (‘The Naturalness of (Many) Social Institutions: Evolved Cognition as their Foundation’; 2012), who put forward a programmatic statement in this connection. I argue that their discussion overstates the explanatory power of evolutionary psychology and does not take sufficient account of what we already know about institutions. At the same time, I suggest that they, and the empirical work upon which they draw, make an important contribution by helping us to establish more clearly the boundary conditions of institutional analysis. I call for ongoing cooperation and for the establishment of a unified research tradition that brings together both evolutionary psychology and institutionalism.