Islamic Economics Studies Bi-quarterly Journal

Applying the Adjustment of Nonperfusion Choices in an Equilibrium Model with Heterogeneous Agents Case Study: Teaching Allocative and Wasted Perfusion Propositions

Document Type : Research Paper

Authors

1 Assistant Professor, Economics and Islamic Banking Department, Faculty of Economics, Kharazmi University, Tehran, Iran

2 M.A in Economics, Islamic Banking and Economics Department, Faculty of Economics, Kharazmi University, Tehran, Iran.

Abstract

Incidence of behavioral heterogeneities and deviation in optimal decision-making in allocating income and adjusting the consumption-saving behavior creates the necessity for Islamic education to correct the Muslim agents’ role-playing. In this research, by applying modified choices based on the teaching Islamic propositions regarding allocative and wasted nonperfusion in an equilibrium model with respect to heterogeneous agents having separable preferencesand solving Bellman-Jacobi-Hamilton equationin the frame of optimil control, the survival probablity of the Muslim agents also, the effect of Islamic intution and education on the modification of non-optimal behaviors, has been investigated. The results show that if the optimal intertemporal allocation beliefs and nonperfusion behaviors are the basis of the behavior of Muslim agents, these types of agents are dominant in the long-time and will survive. Also, after modifying education and awareness of Islamic concepts, on average, 20% of people tend to modify their behavior, and survival rates will increase from 72.25% to 92.25%.

Keywords

The Holy Quran
Alchian, A. A.(1950). Uncertainty, evolution, and economic theory. Journal of political economy. 58(3). 211-221.
Anderson, E. W(2005). The dynamics of risk-sensitive allocations. Journal of Economic theory. 125(2). 93-150.
Blume, L, & Easley, D(1992). Evolution and market behavior. Journal of Economic theory. 58(1). 9-40.‏
Blume, L., & Easley, D(2006). If you're so smart, why aren't you rich? Belief selection in complete and incomplete markets. Econometrica. 74(4). 929-966.
Borovička, J.(2011). Survival and long-run dynamics with heterogeneous beliefs under recursive preferences. Working Paper. Federal Reserve Bank of Chicago.
Colacito, Riccardo, and Mariano M. Croce(2010). Risk Sensitive Allocations with Multiple Goods: Existence, Survivorship, and the Curse of the Linear Approximation. Working paper.
De Long, J. Bradford, Andrei Shleifer, Lawrence H. Summers, and Robert J. Waldmann(1991). the Survival of Noise Traders in Financial Markets. the Journal of Business. 64 (1). 1–19.
Dumas, B., Uppal, R., & Wang, T.(2000). Efficient intertemporal allocations with recursive utility. Journal of Economic Theory. 93(2). 240-259.
El Karoui, N., Peng, S., & Quenez, M. C.(1997). Backward stochastic differential equations in finance. Mathematical finance. 7(1). 1-71.
Epstein, L. G.(1987). The global stability of efficient intertemporal allocations. Econometrica: Journal of the Econometric Society. 329-355.
Fakhreddin Razi, Abu Abdullah Muhammad ibn Umar(1420 AH). The keys of the unseen. Ch III, Beirut: Dar Al-Ahya Al-Tarath Al-Arabi Publications.
Feyz Kashani, Mullah Mohsen(1415 AH). Tafsir Al-Safi. Ch II. Tehran: Sadr Publications.
Friedman, M.(1953). Essays in positive economics. University of Chicago Press.‏
Geoffard, P. Y.(1996). Discounting and optimizing: Capital accumulation problems as variational minmax problems. Journal of Economic Theory. 69(1). 53-70.
Jalali, Mohsen (2007). A Study of Social Welfare Function in Iran. Trend. 169-186.
Karami, Mohammad Hussein (2014). Individualism as the utility of Individuals in the Function of Social Welfare from the Perspective of Islam and Liberalism. Iranian Economic Research. (21). 162-182.
Kan, R.(1995). Structure of Pareto optima when agents have stochastic recursive preferences. Journal of Economic Theory. 66(2). 626-631.
Kogan, L., Ross, S., Wang, J., & Westerfield, M. M.(2009). Market selection (No. w15189). National Bureau of Economic Research.
Koopmans, T. C.(1960). Stationary ordinal utility and impatience. Econometrica: Journal of the Econometric Society. 287-309. 1960.‏
Lucas, R. E., & Stokey, N. L.(1984). Optimal growth with many consumers. Journal of Economic Theory. 32(1). 139-171.
Makarem Shirazi, Nasser(1995). Sample Interpretation. Tehran: Islamic Library Publications.
Mazoy, Jos´e M.(2005). Consumption Allocation Dynamics. PhD dissertation. University of Chicago.
Meyer, Bruce D., & Dan T. Rosenbaum (2000). Making single mothers work: Recent tax and welfare policy and its effects. No. w7491. National bureau of economic research.
Mir Moazi, Seyed Hossein(2008). Macroeconomics with an Islamic Approach. Ch 2. Tehran: Farhang va Andisheh Research Institute Publications.
Naderan, Elias and Karami Esfaheh, Mohammad Hossein (2013). Investigating the Origin of Social Welfare Functions in Bergson–Samuelson's Approach from the Perspective of Islam and Secularism. Economic Research. )19 .(111-124.
Naraghi, Molly Ahmad bin Muhammad Mahdi(1417 AH). The benefits of the rules in expressing the rules of rulings. Qom: Islamic Propaganda Office Publications. Qom Seminary.
Pilwar, Mohammad; Rafiei, Hassan and Abbasid, Ezatullah (2013). The relationship between Iran's social welfare and oil revenues during the years 1968 to 2008. Social Welfare.(49). 57-88.
Qurtubi, Muhammad ibn Ahmad(1985). Aljah’ Al-Ahkam Al-Quran. Tehran: Nasser Khosrow Publications.
Rajaei, Seyed Mohammad Kazem and Mehdi Khatibi(2013). Extractive index and its criteria. Qom: Al-Mustafa International Translation and Publishing Center.
Sandroni, A.(2000). do markets favor agents able to make accurate predictions? Econometrica. 68(6). 1303-1341.
Tabarsi, Fadl Ibn Hassan(1993). Majma 'al-Bayan fi Tafsir al-Quran. Ch III. Tehran: Nasser Khosrow Publications.
Tabatabai, Seyed Mohammad Hossein(1417 AH). Al-Mizan Fi Tafsir Al-Quran. Fifth. Qom: Islamic Publications Office of Qom Seminary Teachers Association.
Thaler, Richard(2017). Misbehaving: The Making of Behavioral Economics. Translated by Behnam Shahaei. Tehran: Mehraban Book Publications.
Tusi, Muhammad ibn Hassan(460 AH). Al-Tebyan Fi Tafsir Al Quran. Beirut: Dar Al-Ahya Al-Tarath Al-Arabi Publications.
Uzawa, H.(1968). Time preference, the consumption function, and optimum asset holdings. Value, capital and growth: papers in honor of Sir John Hicks. The University of Edinburgh Press, Edinburgh. 485-504.
Vesali. Seyed Saeed and Basatian Seyed Mohammad (2012). Investigating the position of the active government in Iran regarding the application of the government welfare function with the social welfare function in Iran. Welfare Planning and Social Development. )11.( 69-92.
Yan, H.(2008). Natural selection in financial markets: Does it work? Management Science. 54(11). 1935-1950.
Islamic Economics Studies Bi-quarterly Journal
Volume 13, Issue 1 - Serial Number 25
March 2020
Pages 33-54