
Contents
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3.1 Concepts That Enter in Formalizing the Preinstitutional Society 3.1 Concepts That Enter in Formalizing the Preinstitutional Society
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3.1.1 On the role and interpretation of simple models 3.1.1 On the role and interpretation of simple models
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3.2 Measurement, Aggregation, and the Concept of Dimension 3.2 Measurement, Aggregation, and the Concept of Dimension
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3.2.1 Aggregation and scaling symmetries 3.2.1 Aggregation and scaling symmetries
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3.2.1.1 Other continuous symmetries 3.2.1.1 Other continuous symmetries
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3.2.2 Dimensional analysis for estimation and prediction 3.2.2 Dimensional analysis for estimation and prediction
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3.3 Discrete Symmetries in Society and in the Economy 3.3 Discrete Symmetries in Society and in the Economy
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3.3.1 Uses of symmetry in analysis 3.3.1 Uses of symmetry in analysis
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3.4 On Counting Degrees of Freedom 3.4 On Counting Degrees of Freedom
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3.5 The Generalized Jevons Failure in Preeconomic Society 3.5 The Generalized Jevons Failure in Preeconomic Society
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3.5.1 Goods, agents, production, preferences 3.5.1 Goods, agents, production, preferences
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3.5.1.1 Notation for endowments and demands 3.5.1.1 Notation for endowments and demands
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3.5.1.2 Agent symmetry, dimension, and minimal utilities 3.5.1.2 Agent symmetry, dimension, and minimal utilities
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3.5.2 Trading, borrowing, and default 3.5.2 Trading, borrowing, and default
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3.6 The Value of Trade and Quantifiers of Allocative Efficiency 3.6 The Value of Trade and Quantifiers of Allocative Efficiency
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3.6.1 Aggregatable economies and money-metric utility 3.6.1 Aggregatable economies and money-metric utility
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3.6.2 Legendre transforms of utility and the economic quantity corresponding to physical “work” 3.6.2 Legendre transforms of utility and the economic quantity corresponding to physical “work”
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3.7 Appendix: Optimizing Systems, Wealth Extraction as Economic Work, and Natural Measures of Value and Efficiency 3.7 Appendix: Optimizing Systems, Wealth Extraction as Economic Work, and Natural Measures of Value and Efficiency
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3.7.1 How seriously does one ever take cardinal utilities? 3.7.1 How seriously does one ever take cardinal utilities?
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3.7.2 The dual system of expenditure functions and money-metric utilities 3.7.2 The dual system of expenditure functions and money-metric utilities
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3.7.3 Measures of value based on expenditure 3.7.3 Measures of value based on expenditure
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3.7.4 Measures of value in “open” aggregatable economies, and Walras’s “potential functions” for prices 3.7.4 Measures of value in “open” aggregatable economies, and Walras’s “potential functions” for prices
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3.7.5 Mixed boundary conditions and the use of economic “reservoirs” 3.7.5 Mixed boundary conditions and the use of economic “reservoirs”
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Notes Notes
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3 Formalizing Measurement and Modeling: The Preinstitutional Society
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Published:September 2016
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Abstract
In this chapter we introduce the concepts of symmetry, dimensions and scaling, which are fundamental to a principled construction and interpretation of minimal models in this book. We also introduce the formal models for production and preferences, which we call the “pre-institutional society”. Society defines the context within which the institutions of the polity and the economy exist. The pre-institutional society is meant to represent the shared layers of constraint within which the different economic institutions must function. Economic life is potentially complex in all its dimensions. In comparison to reality, the space of tractable models is small. The subject of this chapter is to develop criteria for categorizing models and criteria by which to judge the validity of using them as sufficient representations of economic phenomena.
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