Changes
Jump to navigation
Jump to search
==Empirical Questions: ==
===What's the author's hypothesis? ===
===How it is tested?===
===What do the tests achieve? ===
===How could the tests be improved?===
=== What are the tests' strengths and weaknesses? ===
=== Can you think of any alternative empirical tests?===
no edit summary
===What is the author's hypothesis? ===
The author describes a "coalition" of cooperative traders who shared information about their experiences with individual agents. Members of the coalition would punish agents who deviated together. This would help overcome the imperfect monitoring problem that traders and courts faced when agents left their supervision to deliver goods.
Agents would earn a wage and premium whose discounted value was generally greater than the value of cheating.
===How does the author test the hypothesis? ===
The author tests the hypothesis by deriving a theoretical model, and showing that the strategies employed by the traders (according to the archival/historical records) approximate the equilibrium strategy of his model.
The theoretical model in question is essentially an infinitely repeated relational contract game in which a reputation system (through a wage premium) incentivizes agents to tell the truth as a best strategy.
Note that intergenerational transfers of reputation and wealth -- as was practiced by the agents in real life -- make the model's infinite horizon more believable.
===How does the author rule out alternative hypotheses?===
===How might these tests be run if one had quantitative evidence? ===
===What problems might arise in this quantitative analysis?===
