nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2009‒03‒14
five papers chosen by
Matthew Baker
City University of New York

  1. Policy Instruments for Evolution of Bounded Rationality: Application to Climate-Energy Problems By Nannen, Volker; van den Bergh, Jeroen C. J. M.
  2. 'Us' and 'Them': The Origin of Identity, and its Economic Implications By B. Curtis Eaton; Mukesh Eswaran; Robert Oxoby
  3. Neuroeconomics: A Critique of ‘Neuroeconomics: A Critical Reconsideration’ By Stanton, Angela A.
  4. Psychology and Economics rather than Psychology versus Economics: Cultural differences but no barriers! By Hermann Brandstätter; Werner Güth; Hartmut Kliemt
  5. Group Selection: The quest for social preferences By Salomonsson, Marcus

  1. By: Nannen, Volker; van den Bergh, Jeroen C. J. M.
    Abstract: We demonstrate how an evolutionary agent-based model can be used to evaluate climate policies that take the heterogeneity of strategies of individual agents into account. An essential feature of the model is that the fitness of an economic strategy is determined by the relative welfare of the associated agent as compared to its immediate neighbors in a social network. This enables the study of policies that affect relative positions of individuals. We formulate two innovative climate policies, namely `prizes', altering directly relative welfare, and `advertisement', which influences the social network of interactions. The policies are illustrated using a simple model of global warming where a resource with a negative environmental impact---fossil energy---can be replaced by an environmentally neutral yet less cost effective alternative, namely renewable energy. It is shown that the general approach enlarges the scope of economic policy analysis.
    Keywords: agent-based modeling; behavioral economics; climate policy; evolutionary economics; relative welfare; social network
    JEL: B52 H23 Q54 C73
    Date: 2009–01–14
  2. By: B. Curtis Eaton; Mukesh Eswaran; Robert Oxoby
    Abstract: We investigate the origins of identity and the innate proclivity to draw a distinction between "insiders" and "outsiders".We propose an evolutionary explanation: we argue that identity arises because it facilitates survival. In an evolutionary setting we endogenize preferences and demonstrate that the evolutionarily stable preferences fashioned by natural selection would draw a distinction between insiders and outsiders. We then work out the implications of such preferences in two contemporary scenarios, one entailing rent-seeking behavior and the other involving public good provision. Our results are in conformity with empirical evidence. Acknowledgements: We would like to thank participants of the CIFAR Workshop, the DIET Workshop at UBC, and the seminar participants at the Indian Statistical Institute, Dehli. We gratefully acknowledge the input of Hugh Neary.
    JEL: D87 D72 H00
    Date: 2009–01–01
  3. By: Stanton, Angela A.
    Abstract: Some economists believe that neuroeconomists threatens the theory of economics. Glenn Harrison’s paper “Neuroeconomics: A Critical Reconsideration” (2008) provides some support for this view, though some of the points he makes are somewhat disguised. The field of neuroeconomics is barely into its teenage years; and it is trying to do what? Criticize and redesign the field of economics developed over hundreds of years? But that is not what neuroeconomics is trying to do, in spite of all the efforts of some economists trying to place it into that shoebox (see the argument in great detail in Andrew Caplin, Andrew Schotter 2008). Neuroeconomics is a Mendelian-Economics of sort; it is a science that is able to generate data by fixing the environment to some degree, varying a single independent variable for its affects, and is able to see each individual’s choices from initiation of the decision-making process to its outcome. Mainstream (standard) economics, on the other hand, looks at the average of the outcomes of many individuals and proposes how people chose those outcomes, retroactively. The two fields, neuroeconomics and standard economics, are evaluating two sides of the same coin: one with and the other without ceteris paribus; they are not in conflict with one another.
    Keywords: Neuroeconomics; Standard Economics; Ceteris Paribus; Hormones
    JEL: D01 C91 D87
    Date: 2008
  4. By: Hermann Brandstätter (University of Linz); Werner Güth (Max Planck Institute of Economics, Jena, Germany); Hartmut Kliemt (Frankfurt School of Finance & Management, Frankfurt am Main, Germany)
    Abstract: During the last three decades the ascent of behavioral economics clearly helped to bring down artificial disciplinary boundaries between psychology and economics. Noting that behavioral economics seems still under the spell of the rational choice tradition - and, indirectly, of behaviorism - we scrutinize in an exemplary manner how the development of some kind of "cognitive economics" might mirror the rise of "cognitive psychology" without endangering the advantages of the division of labor and of disciplinary specialization.
    Keywords: bounded rationality, game theory, satisficing, interdisciplinary research, experimental economics, economic psychology
    JEL: B31 B41 C72 C73 C78 D63
    Date: 2009–03–04
  5. By: Salomonsson, Marcus (Dept. of Economics, Stockholm School of Economics)
    Abstract: This paper surveys the literature on group selection. I describe the early contributions and the group selection controversy. I also describe the main approaches to group selection in the recent literature; fixation, assortative group formation, and reproductive externalities.
    Keywords: Altruism; spite; externalities; conformity; fixation; signalling
    JEL: C70 D62 D64
    Date: 2009–03–06

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