nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒09‒25
ten papers chosen by
Matthew Baker
City University of New York

  1. The Physiological Foundations of the Wealth of Nations By Dalgaard, Carl-Johan; Strulik, Holger
  2. Convergence of Income Growth Rates in Evolutionary Agent-Based Economics By Volker Nannen
  3. Two Kinds of Adaptation, Two Kinds of Relativity By Kontek, Krzysztof
  4. Does Consistency Predict Accuracy of Beliefs?: Economists Surveyed About PSA By Berg, Nathan; Biele, Guido; Gigerenzer, Gerd
  5. Neuroeconomics: Constructing Identity By John B. Davis
  6. The Methodological Promise of Experimental Economics By Glenn W. Harrison
  7. Algebraic Representation of Social Capital Matrix By Tariq Shah; Syed Akhter Hussain Shah; Eatzaz Ahmed
  8. Local Interactions By Onur Özgür
  9. Government size and trust By Yamamura, Eiji
  10. Frugality By Argandoña, Antonio

  1. By: Dalgaard, Carl-Johan; Strulik, Holger
    Abstract: Evidence from economics, anthropology and biology testifies to a fundamental household trade-off between the number of offspring (quantity) and amount of nutrition per child (quality). This leads to a theory of pre-industrial growth where body size as well as population size is endogenous. But when productive quality investments are undertaken the historical constancy of income per capita seems puzzling. Why didn't episodes of rising income instigate a virtuous circle of rising body size and productivity? To address this question we propose that societies are subject to a \physiological check: if human body size rises, metabolic needs - our conceptualization of \subsistence requirements - rise. This mechanism turns out to be instrumental in explaining why income growth does not take hold and societies remain near an endogenously determined subsistence boundary. When we use the theory to shed light on pre-industrial cross-country income differences we find that 60-70% of the income differences in 1500 can plausibly be accounted for by variations in subsistence requirements. --
    Keywords: Malthusian stagnation,Subsistence,Nutrition,Body size,Population growth
    JEL: O11 I12 J13
    Date: 2010
  2. By: Volker Nannen
    Abstract: We consider a heterogeneous agent-based economic model where economic agents have strictly bounded rationality and where income allocation strategies evolve through selective imitation. Income is calculated by a Cobb-Douglas type production function, and selection of strategies for imitation depends on the income growth rate they generate. We show that under these conditions, when an agent adopts a new strategy, the effect on its income growth rate is immediately visible to other agents, which allows a group of imitating agents to quickly adapt their strategies when needed.
    Date: 2010–09
  3. By: Kontek, Krzysztof
    Abstract: This paper presents a review of adaptation concepts at the evolutionary, environmental, neural, sensory, mental and mathematical levels, including Helson’s and Parducci’s theories of perception and category judgments. Two kinds of adaptation can be clearly distinguished. The first, known as level adaptation, refers to the shift of the neutral perception level to the average stimulus value. It results in a single reference point and stimuli changes represented in absolute terms. This concept is employed by Prospect Theory, which assumes that gains and losses are perceived as monetary amounts. The second kind of adaptation refers to the adjustment of perception sensitivity to stimuli range. It results in two reference points (minimum and maximum stimulus) and stimuli changes perceived in relative terms. Both range adaptation and range relativity are well documented phenomena and have even been confirmed by the creators of Prospect Theory. This makes room for another decision making theory based on the range relativity approach. As shown by Kontek (2009), such a theory would not require the concept of probability weighting to describe lottery experiments or behavioral paradoxes.
    Keywords: Adaptation-Level Theory; Range-Frequency Theory; Prospect Theory
    JEL: D81 C91 D87
    Date: 2010–09–19
  4. By: Berg, Nathan; Biele, Guido; Gigerenzer, Gerd
    Abstract: Subjective beliefs and behavior regarding the Prostate Specific Antigen (PSA) test for prostate cancer were surveyed among attendees of the 2006 meeting of the American Economic Association. Logical inconsistency was measured in percentage deviations from a restriction imposed by Bayes’ Rule on pairs of conditional beliefs. Economists with inconsistent beliefs tended to be more accurate than average, and consistent Bayesians were substantially less accurate. Within a loss function framework, we look for and cannot find evidence that inconsistent beliefs cause economic losses. Subjective beliefs about cancer risks do not predict PSA testing decisions, but social influences do.
    Keywords: logical consistency; predictive accuracy; elicitation; non-Bayesian; ecological rationality
    JEL: D6 D8
    Date: 2010–08–11
  5. By: John B. Davis (Department of Economics, Marquette University, and Amsterdam School of Economics, University of Amsterdam)
    Abstract: This paper asks whether neuroeconomics will make instrumental use of neuroscience to adjudicate existing disputes in economics or be more seriously informed by neuroscience in ways that might transform economics. The paper pursues the question by asking how neuroscience constructs an understanding of individuals as whole persons. The body of the paper is devoted to examining two approaches: Don Ross’s neurocellular approach to neuroeconomics and Joseph Dumit’s cultural anthropological science organization approach. The accounts are used to identify boundaries on single individual explanations. With that space Andy Clark’s external scaffolding view and Nathaniel Wilcox’s socially distributed cognition view are employed.
    Keywords: neuroeconomics, behavioral economics, neurocellular economics
    JEL: A12 B41
    Date: 2010
  6. By: Glenn W. Harrison
    Abstract: null
    Date: 2010–09
  7. By: Tariq Shah; Syed Akhter Hussain Shah; Eatzaz Ahmed (Pakistan Institute of Development Economics)
    Abstract: This paper proposes a mathematical model based on a Boolean algebra involving a 4×4 social capital matrix [Shah (2008)], that emerges through interaction within and across individuals, communities, institutions and state. The framework provides a coding system for the existence or otherwise of various categories of social interaction. The model illustrates that social interaction can be neatly described in a format that facilitates the interpretation of social intra- and interactions among the four types of players in generating economic activity.
    Keywords: Social Capital (Matrix), Linear Space, Interactive Systems, Boolean Algebra
    JEL: A13 D78 Z13
    Date: 2010
  8. By: Onur Özgür
    Abstract: Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are `close' to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular forms of externalities, their presence typically suggests government action. I survey and discuss existing theoretical work on economies with local interactions and point to areas for further research. <P>Les interactions locales concernent les phénomènes socio-économiques où les choix des individus sont influencés par les choix des autres qui sont proches d'eux socialement ou géographiquement. Cela représente une image assez juste de l'expérience humaine. De plus, puisque les interactions sociales sont en fait des externalités particulières, leur présence implique typiquement l'intervention gouvernementale. Dans cet article, je présente la littérature théorique récente sur les interactions locales et propose diverses avenues de recherche.
    Keywords: Conformity, externalities, local interactions, Markov perfect equilibrium, multiple equilibria, rational expectations, social interactions, social multiplier, strategic complementarities., Anticipations rationales, conformité, équilibre de Markov parfait, équilibres multiples, externalités, interactions locales, interactions sociales, multiplicateur social, complémentarités stratégiques.
    JEL: C31 C33 C62 C72 C73 D9 D62 D50 Z13
    Date: 2010–09–01
  9. By: Yamamura, Eiji
    Abstract: This paper uses individual level data (the Japanese General Social Survey) to examine how government size influences generalized trust. After controlling for the endogeneity of government size using instrumental variables, I found: (1) Using all samples, government size is not associated with generalized trust, and (2) After splitting the sample into workers and non-workers, government size does not influence generalized trust for non-workers whereas it significantly reduces generalized trust for workers. This suggests that workers, through their work experience, might have to face greater bureaucratic red tape coming from “larger government”, leading to negative externality effects on relationships of trust in the labor market.
    Keywords: Government size; Generalized trust; Employment.
    JEL: D30 Z13
    Date: 2010–09–03
  10. By: Argandoña, Antonio (IESE Business School)
    Abstract: Frugality is a little studied virtue, but one that is important to the lives of individuals and families, communities and broader societies. In this article we consider what we mean by frugality and discuss its role in the decision-making process, within action theory. This leads us to a normative explanation of why frugality is needed and what it signifies. (Also available in Spanish)
    Keywords: Action theory; Frugality; Lifestyle; Prudence; Saving; Sobriety; Temperance; Virtue;
    Date: 2010–07–21

This nep-evo issue is ©2010 by Matthew Baker. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.