nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2009‒01‒03
two papers chosen by
Matthew Baker
City University of New York

  1. Environmental innovation and industrial dynamics: the contributions of evolutionary economics By Vanessa OLTRA (GREThA UMR CNRS 5113)
  2. Social Norms, Information, and Trust among Strangers By John Duffy; Huan Xie; Yong-Ju Lee

  1. By: Vanessa OLTRA (GREThA UMR CNRS 5113)
    Abstract: The purpose of this article is to discuss the contributions of the evolutionary theory of innovation on the micro and meso dynamics of environmental innovations. We argue that the evolutionary literature on innovation, and more particularly on technological regimes, provides a relevant framework in order to analyse the various determinants of environmental innovations and the double externality problem in an industrial dynamics context. The article starts with an overview of the empirical literature on environmental innovations with a focus on their determinants and specificities. In section 3, we discuss the contributions of the evolutionary literature on technological regimes and argue that it can provide a relevant framework for a sectoral approach of environmental innovations. In section 4, we concentrate on the role of demand side dynamics and highlight the implications of technological competition models on the role of demand conditions in the diffusion of environmental technologies. Finally, section 5 is devoted to the implications of the evolutionary theory of innovation on the question of the transition towards more sustainable technological systems.
    Keywords: Environmental innovations, industrial dynamics, evolutionary theory, technological regimes
    JEL: Q55 O31
    Date: 2008
  2. By: John Duffy (University of Pittsburgh); Huan Xie (Concordia University); Yong-Ju Lee (Samsung Research Institute of Finance)
    Abstract: How do norms of trust and reciprocity arise? We investigate this question by examining behavior in an experiment where subjects play a series of indefinitely repeated trust games. Players are randomly and anonymously matched each period. The parameters of the game are chosen to support trust and reciprocity as a sequential equilibrium when no reputational information is available. The main question addressed is whether a social norm of trust and reciprocity emerges under the most extreme information restriction (community-wide enforcement) or whether trust and reciprocity require additional, individual-specific information about a player's past history of play. In the absence of such reputational information, we find that a social norm of trust and reciprocity is difficult to sustain. The provision of reputational information on past individual decisions significantly increases trust and reciprocity when subjects have experienced the absence of such a mechanism. Importantly, we find that making reputational information available at a small cost may also lead to a significant improvement in trust and reciprocity, despite the fact that most subjects do not choose to purchase this information.
    Keywords: Social Norms, Trust Game, Random Matching, Trust and Reciprocity, Information, Reputational Information
    JEL: C72 C91 C92
    Date: 2008–10

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