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on Evolutionary Economics |
| By: | Marianna Belloc (Sapienza University of Rome); Samuel Bowles (Santa Fe Institute, University of Siena, and University of Massachusetts Amherst) |
| Abstract: | Cultural and institutional differences among nations may result in differences in the ratios of marginal costs of goods in autarchy and thus be the basis of specialization and comparative advantage, as long as these differences are not eliminated by trade. We provide an evolutionary model of endogenous preferences and institutions under autarchy, trade and factor mobility in which multiple asymptotically stable cultural-institutional conventions may exist, among which transitions may occur as a result of decentralized and un-coordinated actions of employers or employees. We show that: i) specialization and trade may arise and enhance welfare even when the countries are identical other than their cultural-institutional equilibria; ii) trade liberalization does not lead to convergence, it reinforces the cultural-institutional differences upon which comparative advantage is based and may thus impede even Pareto-improving cultural-institutional transitions; and iii) by contrast, greater mobility of factors of production favors decentralized transitions to a superior cultural-institutional convention by reducing the minimum number of cultural or institutional innovators necessary to induce a transition. JEL Categories: D23, F15, F16, C73 |
| Keywords: | institutions, incomplete contracts, evolutionary game theory, culture, trade integration, factor mobility, globalization |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2009-08&r=evo |
| By: | Hamanaka, Shingo |
| Abstract: | Israel’s policies regarding Lebanon have been dependent on public opinion, which is very volatile. The citizens of Israel did not favor the occupation of the security zone in South Lebanon because of the Four Mothers movement, and it influenced the government to withdraw military forces unilaterally in May 2000. When Hizbollah attacked the Israel Defense Force (IDF) patrol and abducted two soldiers on the northern border, the Israeli citizens supported the government’s decision of waging a war in retaliation. This study aims to shed light on the causal mechanism of the influence of public opinion on the defense policy in the rational framework of deterrence strategy. I chose the evolutionary game theory approach as my research method. My study yielded the following result: the deterrence is not stable when the aggression level of the defenders is less than the level of the critical condition. The Israeli government made a decision to conduct unilateral withdrawal under the pressure of passive defenders among the people. However, the IDF could begin the operation in Lebanon because of a substantial number of supporters who hoped to restore the deterrence. This study concludes that the Israelis exhibited strong intension and an aggressive attitude toward the deterrence. |
| Keywords: | Deterrence; Evolutionary Game Theory; Second Lebanon War; Israel; Hizbollah |
| JEL: | N45 F5 F51 C7 N4 C72 |
| Date: | 2009–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16800&r=evo |
| By: | Schultz, T. Paul (Yale University) |
| Abstract: | The program evaluation literature for population and health policies is in flux, with many disciplines documenting biological and behavioral linkages from fetal development to late life mortality, chronic disease, and disability, though their implications for policy remain uncertain. Both macro- and microeconomics seek to understand and incorporate connections between economic development and the demographic transition. The focus here is on research methods, findings, and questions that economists can clarify regarding the causal relationships between economic development, health outcomes, and reproductive behavior, which operate in many directions, posing problems for identifying causal pathways. The connection between conditions under which people live and their expected life span and health status refers to "health production functions." The relationships between an individual's stock of health and productivity, well-being, and duration of life encompasses the "returns to health human capital." The control of reproduction improves directly the well-being of women, and the economic opportunities of her offspring. The choice of population policies may be country specific and conditional on institutional setting, even though many advances in biomedical and public health knowledge, including modern methods of birth control, are now widely available. Evaluation of a policy intervention in terms of cost effectiveness is typically more than a question of technological efficiency, but also the motivation for adoption, and the behavioral responsiveness to the intervention of individuals, families, networks, and communities. Well-specified research strategies are required to address (1) the economic production of health capacities from conception to old age; (2) the wage returns to increasing health status attributable to policy interventions; (3) the conditions affecting fertility, family time allocation, and human capital investments; and (4) the consequences for women and their families of policies which change the timing as well as number of births. |
| Keywords: | fertility and family planning, biology of health human capital, economic development, health |
| JEL: | D13 I18 J13 O12 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4340&r=evo |
| By: | Hoff, Karla (World Bank); Kshetramade, Mayuresh (affiliation not available); Fehr, Ernst (University of Zurich) |
| Abstract: | Well-functioning groups enforce social norms that restrain opportunism, but the social structure of a society may encourage or inhibit norm enforcement. Here we study how the exogenous assignment to different positions in an extreme social hierarchy – the caste system – affects individuals' willingness to punish violations of a cooperation norm. Although we control for individual wealth, education, and political participation, low caste individuals exhibit a much lower willingness to punish norm violations that hurt members of their own caste, suggesting a cultural difference across caste status in the concern for members of one's own community. The lower willingness to punish may inhibit the low caste's ability to sustain collective action and so may contribute to its economic vulnerability. |
| Keywords: | social norms, informal sanctions, third party punishment, endogenous social preferences, social exclusion, collective action, caste |
| JEL: | D02 D64 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4343&r=evo |
| By: | Takahashi, Taiki; Hadzibeganovic, Tarik; Cannas, Sergio; Makino, Takaki; Fukui, Hiroki; Kitayama, Shinobu |
| Abstract: | According to theories of cultural neuroscience, Westerners and Easterners may have distinct styles of cognition (e.g., different allocation of attention). Previous research has shown that Westerners and Easterners tend to utilize analytical and holistic cognitive styles, respectively. On the other hand, little is known regarding the cultural differences in neuroeconomic behavior. For instance, economic decisions may be affected by cultural differences in neurocomputational processing underlying attention; however, this area of neuroeconomics has been largely understudied. In the present paper, we attempt to bridge this gap by considering the links between the theory of cultural neuroscience and neuroeconomic theory of the role of attention in intertemporal choice. We predict that (i) Westerners are more impulsive and inconsistent in intertemporal choice in comparison to Easterners, and (ii) Westerners more steeply discount delayed monetary losses than Easterners. We examine these predictions by utilizing a novel temporal discounting model based on Tsallis' statistics (i.e. a q-exponential model). Our preliminary analysis of temporal discounting of gains and losses by Americans and Japanese confirmed the predictions from the cultural neuroeconomic theory. Future study directions, employing computational modeling via neural networks, are briefly outlined and discussed. |
| Keywords: | Cultural neuroscience; neuroeconomics; intertemporal choice; attention allocation; Tsallis’ statistics; neural networks |
| JEL: | C63 C02 Z19 C49 C91 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16814&r=evo |
| By: | Strulik, Holger |
| Abstract: | This paper introduces wealth-dependent time preference into a simple model of endogenous growth. The model generates adjustment dynamics in line with the historical facts on savings and economic growth in Europe from the High Middle Ages to today. Along a virtuous cycle of development more wealth leads to more patience, which leads to more savings and even higher wealth. Savings rates and income growth rates are thus jointly increasing during the process of development until they converge towards constants along a balanced growth path. During the transition to modern growth an economy in which the association of wealth and patience is stronger overtakes an otherwise identical economy and generates temporarily diverging growth rates. It is shown how wealth-dependent time preference can explain the existence of a locally stable poverty trap as well as the phenomenon of simultaneously falling interest rates and rising growth rates. |
| Keywords: | economic growth, savings, time preference, poverty trap, moral consequences of economic growth. |
| JEL: | O11 O41 D90 P48 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-426&r=evo |
| By: | Andrew Mearman (Department of Economics, University of the West of England, UK) |
| Abstract: | This paper attempts to engage with the established debate on the nature of heterodox economics. However, it starts from the position that previous attempts to classify and identify heterodox economics have been biased towards a priori definition. The paper aims to inform the discussion of the nature of heterodoxy with some empirical analysis. The paper examines survey data collected from a small/medium-sized sample of AHE members on the core concepts in economics. The paper applies factor analysis to the data. It also applies principles of biological taxonomy, and thence cluster analysis to the problem. The paper finds that within the self-identified community of self-identified heterodox economists there is little agreement as to whether members are pluralist, or what their attitude is to the mainstream. Indeed, there is little agreement on any core concepts or principles. The paper argues that there is little structure to heterodox economics beyond that provided by pre-existing (or constituent) schools of thought. Based on this study, heterodox economics appears a complex web of interacting individuals and as a group is a fuzzy set. These results would lead us to question further strict distinctions between heterodox, mainstream and pluralist economists. |
| Keywords: | heterodox economics, survey, factor analysis, cluster analysis |
| JEL: | B5 C19 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:uwe:wpaper:0915&r=evo |