nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒06‒04
eight papers chosen by
Matthew Baker
City University of New York

  1. Pure Saddle Points and Symmetric Relative Payoff Games By Duersch, Peter; Oechssler, Jorg; Schipper, Burkhard C.
  2. Social Relationships and Trust By Christine Binzel; Dietmar Fehr
  3. Landscape in the Economy of Conspicuous Consumptions By Situngkir, Hokky
  4. Unbeatable Imitation By Duersch, Peter; Oechssler, Jorg; Schipper, Burkhard C.
  5. The state and scope of the economic history of developing regions By Stefan Schirmer; Latika Chaudhary; Metin Coşgel; Jean-Luc Demonsant; Johan Fourie; Ewout Frankema; Giampaolo Garzarelli; John Luiz; Martine Mariotti; Grietjie Verhoef; Se Yan
  6. Prigogine's Theory of the Dynamics of Far-from-Equilibrium Systems Informs the Role of Strategy Making in Organizational Evolution By Burgelman, Robert A.
  7. Social Norms and Preferences By Andrew Postlewaite
  8. Democracy as a Middle Ground: A Uni…ed Theory of Development and Political Regimes By Larsson, Anna; Parente, Stephen

  1. By: Duersch, Peter (University of Heidelberg); Oechssler, Jorg (University of Heidelberg); Schipper, Burkhard C. (University of California, Davis)
    Abstract: It is well known that the rock-paper-scissors game has no pure saddle point. We
    Abstract: show that this holds more generally: A symmetric two-player zero-sum game has
    Abstract: a pure saddle point if and only if it is not a generalized rock-paper-scissors game.
    Abstract: Moreover, we show that every finite symmetric quasiconcave two-player zero-sum
    Abstract: game has a pure saddle point. Further sufficient conditions for existence are provided. We apply our theory to a rich collection of examples by noting that the
    Abstract: class of symmetric two-player zero-sum games coincides with the class of relative
    Abstract: payoff games associated with symmetric two-player games. This allows us to derive
    Abstract: results on the existence of a finite population evolutionary stable strategies.
    JEL: C72 C73
    Date: 2010–02
  2. By: Christine Binzel; Dietmar Fehr
    Abstract: While social relationships play an important role for individuals to cope with missing market institutions, they also limit individuals' range of trading partners. This paper aims at understanding the determinants of trust at various social distances when information asymmetries are present. Among participants from an informal housing area in Cairo we find that the increase in trust following a reduction in social distance comes from the fact that trustors are much more inclined to follow their beliefs when interacting with their friend. When interacting with an ex-ante unknown agent instead, the decision to trust is mainly driven by social preferences. Nevertheless, trustors underestimate their friend's intrinsic motivation to cooperate, leading to a loss in social welfare. We relate this to the agents' inability to signal their trustworthiness in an environment characterized by strong social norms.
    Keywords: Trust, hidden action, social distance, solidarity, reciprocity, economic development
    JEL: C72 C93 D82 O12
    Date: 2010
  3. By: Situngkir, Hokky
    Abstract: Psychological states side by side with the bounded rational expectations among social agents contributes to the pattern of consumptions in economic system. One of the psychological states are the envy – a tendency to emulate any gaps with other agents’ properties. The evolutionary game theoretic works on conspicuous consumption are explored by growing the micro-view of economic agency in lattice-based populations, the landscape of consumptions. The emerged macro-view of multiple equilibria is shown in computational simulative demonstrations altogether with the spatial clustered agents based upon the emerged agents’ economic profiles.
    Keywords: conspicuous consumption; behavioral economics; agent-based simulations
    JEL: D11 C63 D82 C78 B40 C02 C62 E20 A14
    Date: 2010–05–07
  4. By: Duersch, Peter (University of Heidelberg); Oechssler, Jorg (University of Heidelberg); Schipper, Burkhard C. (University of California, Davis)
    Abstract: We show that for many classes of symmetric two-player games, the simple decision rule "imitate-the-best" can hardly be beaten by any other decision rule. We provide necessary and sufficient conditions for imitation to be unbeatable and show that it can only be beaten by much in games that are of the rock-scissors-paper variety. Thus, in many interesting examples, like 2x2 games, Cournot duopoly, price competition, rent seeking, public goods games, common pool resource games, minimum effort coordination games, arms race, search, bargaining, etc., imitation cannot be beaten by much even by a very clever opponent
    JEL: C72 C73 D43
    Date: 2010–02
  5. By: Stefan Schirmer (University of the Witwatersrand, South Africa); Latika Chaudhary (Scripps College, USA); Metin Coşgel (University of Connecticut, USA); Jean-Luc Demonsant (University Of Guanajuato, Mexico); Johan Fourie (Department of Economics, University of Stellenbosch); Ewout Frankema (Utrecht University, The Netherlands); Giampaolo Garzarelli (University of the Witwatersrand, South Africa); John Luiz (University of the Witwatersrand Business School, South Africa); Martine Mariotti (Australian National University, Australia); Grietjie Verhoef (University of Johannesburg, South Africa); Se Yan (Peking University, China)
    Abstract: This paper examines the state and scope of the study of economic history of developing regions, underlining the importance of knowledge of history for economic development. While the quality of the existing research on developing countries is impressive, the proportion of published research focusing on these regions is low. The dominance of economic history research on the North American and Western European success stories suggests we need a forum for future research that contributes to our understanding of how institutions, path dependency, technological change and evolutionary processes shape economic growth in the developing parts of the world. Many valuable data sets and historical episodes relating to developing regions remain unexplored, and many interesting questions unanswered. This is exciting. Economic historians and other academics interested in the economic past have an opportunity to work to begin to unlock the complex reasons for differences in development, the factors behind economic disasters and the dynamics driving emerging success stories.
    Keywords: Africa, China, Cliometrics, developing countries, development, India, institutions, Latin America, Middle East, new economic history
    JEL: N01
    Date: 2010
  6. By: Burgelman, Robert A. (Stanford University)
    Abstract: This paper offers a perspective on how Ilya Prigogine's theoretical ideas rooted in the physical sciences can inform and inspire organization theory and strategic management scholars. To that end, the next section of this paper provides a brief synopsis of some of Prigogine and his collaborators seminal scientific insights in the dynamics of far-from-equilibrium systems in the physical sciences. This is followed by a brief summary of how their insights gleaned from studying the dynamics of far-from-equilibrium systems in the physical sciences may inform the study of social systems. The section following this provides examples of the general applicability of the theory of nonlinear dynamics of far-from-equilibrium systems in economics and organization theory. While Prigogine's theoretical insights have important implications for all levels of social systems, the main purpose of this paper is to examine how his insights inform the role of the strategy-making process in matching the internal and external ecological dynamics that together determine an individual organization's evolution and its longevity. Consequently, in the next to last section of the paper I draw on my own work about the role of strategy-making in organizational evolution to establish conceptual links with the fundamental insights generated by Prigogine and his collaborators. The conclusion section suggests the potential of Prigogine's work to unify the physical and social sciences and to motivate a new philosophy of science.
    Date: 2009–11
  7. By: Andrew Postlewaite (Department of Economics, University of Pennsylvania)
    Abstract: Social norms are often posited as an explanation of differences in economic behavior and performance of societies that are difficult to explain by differences in endowments and technology. Economists are often reluctant to incorporate social aspects into their analyses when doing so leads to models that depart from the “standard” model. I discuss ways that agents’ social environment can be accommodated in standard models and the advantages and disadvantages of doing so.
    Keywords: Social norms, social preferences
    JEL: D01
    Date: 2010–05–01
  8. By: Larsson, Anna (Dept. of Economics, Stockholm University); Parente, Stephen (University of Illinois)
    Abstract: A large literature documents that autocratic regimes have not, on average, outperformed democratic regimes, although they do display greater variance in economic performance. At the same time, no long-lived autocracy currently is rich whereas every long-lived democracy is. This paper puts forth a theory to account for these observations. The theory rests on the idea that autocratic leaders are heterogenous in their preferences and the idea that special interest groups can successfully lobby a democratic regime for policies that delay industrialization. We show that an elite landed class chooses to democratize society only after the economy has accumulated enough wealth.
    Keywords: Autocracy; Democracy; Landed Elites; Growth Miracles; Vested Interests
    JEL: O10 P16
    Date: 2010–05–27

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