nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2007‒12‒08
seven papers chosen by
Matthew Baker
City University of New York

  1. The Role of Biology and Culture in Veblenian Consumption Dynamics. By C. Cordes
  2. (Non-) Behavioral Economics - A Programmatic Assessment By Werner Güth
  3. Output Dynamics, Flow Equilibria and Structural Change – A Prolegomenon to Evolutionary Macroeconomics By U. Witt; T. Brenner
  4. Communication and Coordination: The Case of Boundedly Rational Players By Ellingsen, Tore; Östling, Robert
  5. Made for Toil: Natural selection at the dawn of agriculture By Jacob L. Weisdorf
  6. Listen: I am angry! An experiment comparing ways of revealing emotions By Werner Güth; M. Vittoria Levati
  7. Genetic Influences on Economic Preferences By David, Cesarini; Dawes, Christopher T.; Johannesson, Magnus; Lichtenstein, Paul; Wallace, Björn

  1. By: C. Cordes
    Abstract: This paper incorporates aspects of humans’ evolved cognition into a formal model of cultural evolution and scrutinizes their interactions with population-level processes. It is shown how the biased transmission of different kinds of behavior via cultural learning processes influences agents’ consumption behavior. Thereby, the model’s learning dynamics are capable of generating typical Veblenian consumption dynamics. Based on these insights, the paper then scrutinizes on the role of humans’ biological heritage and Darwinian concepts in the development of economic theories in general. Moreover, the relation of the ontological basis of biological and cultural evolution is addressed.
    Keywords: Conspicuous consumption, Economic theory development, Evolutionary economics, Darwinism, Cultural evolution Length 31 pages
    JEL: A12 B41 B52 C60 D11
    Date: 2007–11
  2. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany)
    Abstract: Economic theory has evolved without paying proper attention to behavioral approaches, especially to social, economic, and cognitive psychology. This has recently changed by including behavioral economics courses in many doctoral study programs. Although this new development is most welcome, the typical topics of the behavioral economics courses are not truly behavioral. More specifically, we question whether eoclassical repairs or game fitting exercises as well as more or less mechanic adaptation processes qualify as behavioral approaches. To avoid criticizing without offering alternatives, we suggest some truly behavioral concepts, especially the satisficing approach.
    Keywords: (Un)Bounded rationality, Satisficing, Learning, Experimental and Behavioral Economics
    JEL: A11 B41 B52 C72 C91
    Date: 2007–12–04
  3. By: U. Witt; T. Brenner
    Abstract: In an evolutionary approach to macroeconomics, the market disequilibrium dynamics resulting from structural change need to be properly represented at the aggregate level. As suggested by the late F.A.Hayek, a suitable equilibrium concept required to this end as a frame of reference, is that of a flow equilibrium. The paper explores the corresponding flow dynamics that draw attention to variables not usually considered in macroeconomic theorizing. Using statistical estimates for these new variables for the West German manufacturing sector during the German unification process allows some important new insights on the relationships between structural change and macroeconomic performance.
    Keywords: Length 15 pages
    JEL: B52 D50 E00 E11 E32
    Date: 2007–11
  4. By: Ellingsen, Tore (Dept. of Economics, Stockholm School of Economics); Östling, Robert (Dept. of Economics, Stockholm School of Economics)
    Abstract: Using the level-k model of boundedly rational interaction, we fully characterize the effects of pre-play communication in symmetric and generic 2x2 games. We find that one-way communication weakly increases coordination on Nash equilibrium outcomes in all such games. Although one-way communication entails Nash equilibrium when relatively sophisticated players meet, there are games in which average payoffs fall when one-way communication is allowed. Two-way communication can yield higher average payoffs than one-way communication in coordination games such as Stag Hunt, but in other games two-way communication reduces both average payoffs and the degree of coordination below the no-communication level. Extending our analysis to larger and less symmetric games, we find that communication facilitates coordination in all two-player common interest games. However, we also identify games in which communication hampers coordination.
    Keywords: Pre-play communication; coordination games; Stag Hunt; level-k; bounded rationality
    JEL: C72
    Date: 2007–11–27
  5. By: Jacob L. Weisdorf
    Abstract: The labour input among pre-historic foragers was normally rewarded within the same day of the effort. For the first farmers, by contrast, labour input and its rewards could be far apart. However, the patience was worthwhile: population growth rates among early agriculturalists were up to 60 times higher than those of their foraging counterparts. It is well-known from the biological science that humans differ with respect to metabolism. This study argues that rates of metabolism well-suited for the many hours of labour input required for farming gained an evolutionary advantage with the advent of agriculture. This theory helps shedding light on the puzzles why farming was adopted despite its high labour costs, and why people of agricultural societies work more than their foraging counterparts.
    Date: 2007
  6. By: Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany)
    Abstract: We report on an experiment designed to explore whether allowing individuals to voice their anger prevents costly punishment. For this sake, we use an ultimatum minigame and distinguish two treatments: one in which responders can only accept or reject the other, and the other in which they can also scold the proposer. By an unannounced successive two-person public goods game, with either the same partner or a different one, we additionally explore how "having a voice" affects later behavior. The evidence supports the conclusion that voicing one's outrage crowds out the need to harm oneself and the other. Yet, this emotional reaction does not lead to increased future cooperation.
    Keywords: Ultimatum bargaining, Public goods game, Outrage, Punishment
    JEL: C72 C78 C92 H41
    Date: 2007–12–04
  7. By: David, Cesarini (Department of Economics, Massachusetts Institute of Technology); Dawes, Christopher T. (Political Science Department, University of California, San Diego); Johannesson, Magnus (Dept. of Economics, Stockholm School of Economics); Lichtenstein, Paul (Department of Medical Epidemiology and Biostatistics, Karolinska Institutet); Wallace, Björn (Dept. of Economics, Stockholm School of Economics)
    Abstract: We use the classical twin design to provide estimates of genetic and environmental influences on experimentally elicited preferences for risk and altruism. Our estimates provide strong prima facie evidence that economic preferences are heritable. Approximately 30 percent of the variation in behavior is explained by genetic effects in the best-fitting models. The results suggest a modest role for common environment as a source of phenotypic variation. Based on the findings, we encourage economists to move beyond a black-box treatment of preference formation and suggest that the further study of the codetermination of preferences by genes and environment will lead to a more comprehensive economic science.
    Keywords: Genetics; Altruism; Risk Aversion; Preferences; Experiments
    JEL: C90 D01 D64
    Date: 2007–11–22

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