nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2005‒11‒05
four papers chosen by
Matthew Baker
US Naval Academy, USA

  1. How much ambiguity can persist? A complete characterization of neutrally stable states for an evolutionary proto-language game By Christiane Pawlowitsch
  2. Speculation and Survival in Financial Markets By Eugen Kovac
  3. Using Experimental Economics to Measure the Effects of a Natural Educational Experiment on Altruism By Eric Bettinger; Robert Slonim
  4. Converging Paradigms for a Co-evolutionary Environmental Limit Discourse By Tom Dedeurwaerdere; Unai Pascual

  1. By: Christiane Pawlowitsch
    Abstract: In an evolutionary sender–receiver game that describes how signals become associated with objects (Hurford, 1989; Nowak and Krakauer, 1999), the set of evolutionarily stable states coincides with the set of strict Nash strategies—and a language is a strict Nash strategy if and only if it links each possible referent exclusively to 1 signal and vice versa (Trapa and Nowak, 2000). As a consequence, a language that displays homonymy (or synonymy)—the property that one signal is linked to more than one referent (or one referent to more than one signal)—cannot be an evolutionarily stable state. This seems to conflict with the results of the computer simulation reported in Nowak and Krakauer (1999) that lend support to the conjecture that a language in which the same signal is used for more than one object can be evolutionarily stable. This paper provides necessary and sucient conditions for a neutrally stable state of this game—and, importantly, these conditions directly characterize a single strategy—showing that a language displaying homonymy or synonymy, even though it fails to be evolutionarily stable (in the strict sense), may still satisfy neutral stability, explaining why an evolutionary process does not necessarily lead away from it.
    JEL: C72
    Date: 2005–07
  2. By: Eugen Kovac
    Abstract: The paper analyzes a finite time economy with a single risky asset which pays a one-shot payoff (dividend). The payoff is random and its distribution is not known a priori. Agents observe public signals (random draws from the same distribution) and update their beliefs about the payoff. They trade in order to reshuffle their portfolios according to new beliefs. Agents may use various updating rules and are considered to be of two types: sophisticated who are aware of their future beliefs and prices, and naive who are not. Drawing on the methodology by Sandroni (2000), it is shown that among sophisticated agents, those with less accurate beliefs are driven out, in the sense that their wealth becomes arbitrarily small when the number of signals is sufficiently large. On the other hand, it is shown that this statement may not hold in economies with naive agents only, where even agents with inaccurate beliefs may survive.
    Keywords: Market selection, wealth accumulation, speculation, learning, sophisticated agents, naive agents.
    JEL: D83 D84 G11
    Date: 2005–09
  3. By: Eric Bettinger; Robert Slonim
    Abstract: Economic research examining how educational intervention programs affect primary and secondary schooling focuses largely on test scores although the interventions can affect many other outcomes. This paper examines how an educational intervention, a voucher program, affected students' altruism. The voucher program used a lottery to allocate scholarships among low-income applicant families with children in K-8th grade. By exploiting the lottery to identify the voucher effects, and using experimental economic methods, we measure the effects of the intervention on children's altruism. We also measure the voucher program's effects on parents' altruism and several academic outcomes including test scores. We find that the educational intervention positively affects students' altruism towards charitable organizations but not towards their peers. We fail to find statistically significant effects of the vouchers on parents' altruism or test scores.
    JEL: I2 C9
    Date: 2005–10
  4. By: Tom Dedeurwaerdere (Institute of Transpersonal Psychology, 1069 E. Meadow Circle Palo Alto, CA 94303, USA); Unai Pascual (Department of Land Economy, University of Cambridge, UK)
    Abstract: This paper argues that the static vision in ecological economics of a fundamental clash between a neo-classical self-interest perspective and limit discourse as de-ontological perspective is an ineffective route towards disseminating environmental values and consciousness. Following the Ego'n'Empathy idea as a fusion of both perspectives to refocus the paradigm of ecological economics, it is argued that this evolution may face intense resistance from entrenched positions. A conceptual exploration of the roots of such resistances is discussed and an alternative, but complimentary process that addresses the need for and process of a synthesis is proposed. As an exemplar of this argument, the Porter Hypothesis is discussed as a complimentary guiding framework of how ecological economics as an action oriented paradigm can increase its influence as a policy guide, in terms of achieving sustainable development within entrenched and confrontational policy contexts
    Keywords: Environmental policy, economic growth, Porter Hypothesis, altruism, evolutionary economics
    Date: 2005–06

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