nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2008‒05‒17
five papers chosen by
Matthew Baker
City University of New York

  1. Workers behavior and labor contract : an evolutionary approach. By Victor Hiller
  2. Advancing Learning and Evolutionary Game Theory with an Application to Social Dilemmas By Izquierdo, Luis R.
  3. On the Equivalence of Nash and Evolutionary Equilibrium in Finite Populations By Tobias Guse; Burkhard Hehenkamp; Alex Possajennikov
  4. Models in evolutionary economics and environmental policy: Towards and evolutionary environmental economics By Albert Faber; Koen Frenken
  5. Human Genetic Diversity and Comparative Economic Development By Ashraf, Quamrul; Galor, Oded

  1. By: Victor Hiller (Centre d'Economie de la Sorbonne et Paris School of Economics)
    Abstract: This article investigates the co-evolution of labor relationships and workers preferences. According to recent experimental economics findinggs on social preferences, the workforce is assumed to be heterogeneous. It is composed by both cooperative and non-cooperative workers. In addition, firms differ by the type of contract they offer (explicit or implicit). Finally, both the distribution of preferences and the degree of contractual completeness are endogeneized. Preferences evolve through a process of cultural transmission and the proportion of implicit contracts is driven by an evolutionary process. The complementarity between the transmission of cooperation and the implementation of implicit contracts leads to multiple equilibria which allow for path-dependence. This property is illustrated by the evolutions of American and Japanese labor contracts during the Twentieth century.
    Keywords: Explicit contract, implicit contract, cultural transmission, preferences for reciprocity, path dependence.
    JEL: D64 D86 Z10
    Date: 2008–04
  2. By: Izquierdo, Luis R.
    Abstract: This thesis advances game theory by formally analysing the implications of replacing some of its most stringent assumptions with alternatives that –at least in certain contexts– have received greater empirical support. Specifically, this thesis makes two distinct contributions in the field of learning game theory and one in the field of evolutionary game theory. The method employed has been a symbiotic combination of computer simulation and mathematical analysis. Computer simulation has been used extensively to enhance our understanding of various formal systems beyond the current limits of mathematical tractability, and also to illustrate, complement and extend various analytical derivations. The two extensions to learning game theory presented here abandon the orthodox assumption that players are fully rational, and assume instead that players follow one of two alternative decision-making processes –case-based reasoning or reinforcement learning– that have received strong support from cognitive science research. The formal results derived in this part of the thesis add to the growing body of work in learning game theory that supports the general principle that the stability of outcomes in games depends not only on how unilateral deviations affect the deviator but also, and crucially, on how they affect the non-deviators. Outcomes where unilateral deviations hurt the deviator (strict Nash) but not the non-deviators (protected) tend to be the most stable. The contribution of this thesis to evolutionary game theory is a systematic study of the extent to which the assumptions made in mainstream evolutionary game theory for the sake of tractability are affecting its conclusions. Our results show that the type of strategies that are likely to emerge and be sustained in evolutionary contexts is strongly dependent on assumptions that traditionally have been thought to be unimportant or secondary (e.g. number of players, continuity of the strategy space, mutation rate, population structure…). This latter contribution is focused on the evolutionary emergence of cooperation. Following the presentation of the main results and the discussion of their implications, this thesis provides some guidance on how the models analysed here could be parameterised and validated.
    Keywords: Game Theory; Learning Game Theory; Evolutionary Game Theory; Computer modelling; Stochastic Approximation; Slow Learning; Reinforcement Learning; Case-based Reasoning; Markov Chains; Stochastic Process;
    JEL: C63 D83 C72 C73
    Date: 2008–04–24
  3. By: Tobias Guse (Department of Economics and Social Sciences, University of Dortmund); Burkhard Hehenkamp (Department of Economics and Social Sciences, University of Dortmund); Alex Possajennikov (School of Economics, University of Nottingham)
    Abstract: This paper provides sufficient and partially necessary conditions for the equivalence of Nash and evolutionary equilibrium in symmetric games played by finite populations. The focus is on symmetric equilibria in pure strategies. The conditions are based on properties of the payoff function that generalize the constant-sum property and the ”smallness” property, the latter of which is known from models of perfect competition and non-atomic, anonymous, or large games. The conditions are illustrated on examples of Bertrand and Cournot oligopoly games.
    Keywords: Nash equilibrium, Evolutionary stability, Finite populations
    JEL: C72 C73
    Date: 2008–04
  4. By: Albert Faber; Koen Frenken
    Abstract: In this paper we review evolutionary economic modelling in relation to environmental policy. We discuss three areas in which evolutionary economic models have a particularly high added value for environmental policy-making: the double externality problem, technological transitions and consumer demand. We explore the possibilities to apply evolutionary economic models in environmental policy assessment, including the opportunities for making policy-making endogenous to environmental innovation. We end with a critical discussion of the challenges that remain.
    Date: 2008–04
  5. By: Ashraf, Quamrul; Galor, Oded
    Abstract: This research contributes to the understanding of human genetic diversity within a society as a significant determinant of its economic development. The hypothesis advanced and empirically examined in this paper suggests that there are socioeconomic trade-offs associated with genetic diversity within a given society. The investigation exploits an exogenous source of cross-country variation in genetic diversity by appealing to the "out of Africa" hypothesis of human origins to empirically establish a highly statistically significant and robust non-monotonic effect of genetic diversity on development outcomes in the pre-colonial era. Contrary to theories that reject a possible role for human genetics in influencing economic development, this study demonstrates the economic significance of diversity in genetic traits, while abstaining entirely from conceptual frameworks that posit a hierarchy of such traits in terms of their conduciveness to the process of economic development.
    Keywords: Comparative development; Human genetic diversity; Land productivity; Malthusian stagnation; Neolithic Revolution; Population density
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2008–05

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