nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒03‒26
twelve papers chosen by
Matthew Baker
City University of New York

  1. Social Provisioning Process and Socio-Economic Modeling By Jo, Tae-Hee
  2. Hormones and Social Preferences By Thomas Buser
  3. Civilización, economía y orden espontaneo: La inviabilidad evolutiva del socialismo By Rodríguez González, Guillermo
  4. Probability Matching and Reinforcement Learning* By Javier Rivas
  5. Experts in Experiments: How Selection Matters for Estimated Distributions of Risk Preferences By von Gaudecker, Hans-Martin; van Soest, Arthur; Wengström, Erik
  6. Strategic Thresholds and its Implications By Mishra, Sandhya
  7. The Economics of Super-Diversity: Findings from British Cities, 2001-2006 By Max Nathan
  8. Racial Differences in Inequality Aversion: Evidence from Real World Respondents in the Ultimatum Game By Griffin, John; Nickerson, David; Wozniak, Abigail
  9. Social customs and demographic change: The case of godparenthood in Catholic Europe By Guido Alfani; Vincent Gourdon; Agnese Vitali
  10. Laboratory and Field Experiments on Social Dilemmas. By Stoop, J.T.R.
  11. Tango in the Dark: The Interplay of Leader’s and Follower’s Level of Self-Construal and its Impact on Ethical Leadership By Gils, S. van; Quaquebeke, N. van; Knippenberg, D.L. van
  12. Impact of Ethnicities on Market Outcome: Results of Market Experiments in Kenya By Ken-Ichi Shimomura; Takehiko Yamato

  1. By: Jo, Tae-Hee
    Abstract: The radical difference between orthodox and heterodox economics emanates from the different views of the capitalist socio-economic system. Economics as the science of social provisioning felicitously describes the heterodox view that economy is part of the evolving social order; social agency is embedded in the social and cultural context; a socio-economic change is driven by technical and cultural changes; and the provisioning process is open-ended. Such a perspective on economy offers ample methodological and theoretical implications for modeling the capitalist economy in a realistic manner. It lends itself especially to the micro-macro synthetic approach. Thus the objective of this paper is twofold: 1) to examine how the concept of the social provisioning process can be clarified and expanded by virtue of recent development in heterodox methodology and 2) to discuss how methodological development would nourish the heterodox modeling and theorizing of the capitalist social provisioning process.
    Keywords: Social Provisioning; heterodox economics; social fabric matrix; system dynamics; social surplus approach
    JEL: B51 B52 B41
    Date: 2011–03–15
  2. By: Thomas Buser (University of Amsterdam)
    Abstract: We examine whether social preferences are determined by hormones. We do this by investigating whether markers for the strength of prenatal testosterone exposure (finger length ratios) and current exposure to progesterone and oxytocin (the menstrual cycle) are correlated with choices in social preference games. We find that subjects with finger ratios indicating high prenatal testosterone exposure give less in the trust, ultimatum and public good games and return a smaller proportion in the trust game. The choices of female subjects vary over the menstrual cycle according to a pattern consistent with a positive impact of oxytocin on giving in the trust and ultimatum games and a positive impact of progesterone on altruism. We find no impact for subjects taking hormonal contraceptives. We conclude that both prenatal and current exposure to hormones play an important role in shaping social preferences.
    Keywords: social preferences; 2D:4D; testosterone; progesterone; oxytocin
    JEL: C91 D87
    Date: 2011–02–24
  3. By: Rodríguez González, Guillermo
    Abstract: The purpose of this paper is to explain the scope of evolutionary infeasibility of socialism in the broad sense, in light of the theory of spontaneous order of F. A. Hayek. To that end we will study the redefinition of socialism in the context of evolutionary praxeology, we apply the theory of the infeasibility of socialism itself, of the Austrian School in two examples, included in the definition of socialism in the broad sense: the monetary and financial policy under fractional banking system and neo malthusian analysis off efficiently ecological and economic sustainability of large populations. Wiht such examples showing the range off diversity of socialism, understood as constructive intellectual error, we will base our analysis on the theory of the Sensory Order Hayek on the human mind and the limits of reason as the cause of the scientific impracticability of any attempt to centralized planning teleological over evolutionary self-regulating systems, whose enormous inherent complexity of information is overwhelming for to human reason except in limited circunstances and only in general strokes.
    Keywords: Spontaneous order; cognitive psychology; evolutionary economics; constructivism; neo-malthusianism
    JEL: B52 P48 P28 B53
    Date: 2011–01–08
  4. By: Javier Rivas
    Abstract: Probability matching occurs when an action is chosen with a frequency equivalent to the probability of that action being the best choice. This sub-optimal behavior has been reported repeatedly by psychologist and experimental economist. We provide an evolutionary foundation for this phenomenon by showing that learning by reinforcement can lead to probability matching and, if learning occurs suffciently slowly, probability matching does not only occur in choice frequencies but also in choice probabilities. Our results are completed by proving that there exists no quasi-linear reinforcement learning specification such that behavior is optimal for all environments where counterfactuals are observed.
    Keywords: Probability Matching; Reinforcement Learning
    JEL: C73
    Date: 2011–03
  5. By: von Gaudecker, Hans-Martin (University of Mannheim); van Soest, Arthur (Tilburg University); Wengström, Erik (University of Copenhagen)
    Abstract: An ever increasing number of experiments attempts to elicit risk preferences of a population of interest with the aim of calibrating parameters used in economic models. We are concerned with two types of selection effects, which may affect the external validity of standard experiments: Sampling from a narrowly defined population of students ("experimenter-induced selection") and self-selection of participants into the experiment. We find that both types of selection lead to a sample of experts: Participants perform significantly better than the general population, in the sense of fewer violations of revealed preference conditions. Self-selection within a broad population does not seem to matter for average preferences. In contrast, sampling from a student population leads to lower estimates of average risk aversion and loss aversion parameters. Furthermore, it dramatically reduces the amount of heterogeneity in all parameters.
    Keywords: risk aversion, loss aversion, internet surveys, laboratory experiments
    JEL: C90 D81
    Date: 2011–03
  6. By: Mishra, Sandhya
    Abstract: This paper aims at defining a Strategic Threshold or Flash points for each strategy followed by the society as a whole. The paper attempts at analyzing interactions between two groups and the effect of change in trust on the path traversed. The paper draws analogy to the behavior of atoms/molecules during a chemical reaction to the influence of Information (positive or negative) on the trust level and the resulting shift in the general social strategy. A society can be considered as a collection of molecules (people) at various energy states (trust level) normally distributed. This implies the presence of a minority of population of high energy state (catalysts in case of chemical reaction OR leaders/influential people in case of societies) . The whole path traversed by the moderate population is influenced by the energy (in the form of propaganda) of these high energy particles until a majority of the population cross the activation energies towards higher macro state (lower trust/social capital). The theory may be used to analyze a variety of social interactions like the ethnic conflicts in Africa and some South Asian nations. The paper also lays out the role of leaders to soothe the conflict and bring back the society to a lower energy state (Higher trust/social capital).
    Keywords: Detrimental Factor of defection; Trust Breaking Threshold Factor; Equilibrium Strategy; Game Theory
    JEL: A20 C70 A10
    Date: 2011–03–04
  7. By: Max Nathan
    Abstract: British cities have a surprisingly long history of cultural diversity. Recently they have become significantly more multicultural, with 'super-diversity' emerging in many urban neighbourhoods. Public interest in these changes is high, but there has been little research assessing their impacts. This paper makes two contributions to the field. First, it assembles new data on UK urban areas 2001-6, using an innovative cultural-ethno-linguistic (CEL) measure of cultural diversity alongside more traditional measures. Second, it tests links between diversity, wages and employment rates at the urban level. As suggested by theory and international evidence, I find some positive associations between super-diversity and UK urban economic performance.
    Keywords: cities, demography, migration, culture, cultural diversity, super-diversity, urbaneconomies, growth
    JEL: J15 J61 O18 R11 R23
    Date: 2011–02
  8. By: Griffin, John (University of Notre Dame); Nickerson, David (University of Notre Dame); Wozniak, Abigail (University of Notre Dame)
    Abstract: The distinct historical and cultural experiences of American blacks and whites may influence whether members of those groups perceive a particular exchange as fair. We investigate racial differences in fairness standards using preferences for equal treatment in the ultimatum game, where responders choose to allow a proposed division of a monetary amount or to block it. Although previous research has studied group differences in the ultimatum game, no study has been able to examine these across races in America. We use a sample of over 1600 blacks and whites drawn from the universe of registered voters in three states and merged with information on neighborhood income and racial composition. We experimentally vary proposed divisions as well as the implied race of the ultimatum game proposer. We find no overall racial differences in acceptance rates or aversion to inequality. However, we uncover racial differences in ultimatum game behavior on other dimensions. Many of these are driven by the lowest income group in our sample, which represents the 10th percentile of the black income distribution. We also find that blacks are more sensitive to unfair proposals from other blacks.
    Keywords: racial differences, inequality aversion, ultimatum game, artefactual experiments
    JEL: J15 D63 C72 C91
    Date: 2011–03
  9. By: Guido Alfani; Vincent Gourdon; Agnese Vitali
    Abstract: This article analyzes social norms regulating selection of godparents in Italy and France and how they will be affected by demographic change. On the grounds of Vatican statistics and of the World Values Survey, it demonstrates that baptisms still occur for the vast majority of children in Catholic Europe and that birth rituals are considered important even by non-believers. Relying on historical data, it shows that the custom of selecting godparents from among kinsmen, currently dominant, is a recent development. A new survey about selection of godparents in Italy and France is used which shows that they are not chosen for religious, but for social-relational reasons. Selection of kinsmen is the norm, with uncles and aunts being the majority choice. For Italy, choice determinants are explored by means of multinomial regressions. The results are contrasted with demographic change to show that in lowest-low fertility countries current godparenthood models are bound to disappear.
    Keywords: Godparenthood; godparents; spiritual kinship; demographic change; social change; social customs; social norms; baptism; lowest-low fertility
    Date: 2011–02
  10. By: Stoop, J.T.R. (Tilburg University)
    Date: 2011
  11. By: Gils, S. van; Quaquebeke, N. van; Knippenberg, D.L. van
    Abstract: In line with romantic views on leadership, leaders are traditionally held responsible for any kind of ethical misconduct in organizations. Through explicating the influence of followers on their leaders' (unethical) decision-making, we aim to add some nuances to this view with the present chapter. To begin with, we suggest that people generally regard leadership as ethical when the leader takes the collective into account, while only focusing on own gains is largely regarded as unethical. We then posit that the degree to which leaders' decisions are directed towards the one versus the other outcome depends on the leaders’ level of self-construal, that is, the way how they see themselves in relation to others. Looking at leader's ethical decision making through this lens suggests that it is open to external influence, in that leaders’ self-construal is susceptible to external cues. In particular, followers form an important part of such external cues for a leader's level of self-construal. We thus suggest various mechanisms via which followers indirectly influence their leaders' ethical decision making. In sum, we put forward a model in which we show how leaders and followers reciprocally affect their level of self-construal and thus ultimately the degree to which ethical leadership is enacted.
    Keywords: leadership;followers;ethical leadership
    Date: 2011–03–04
  12. By: Ken-Ichi Shimomura (Research Institute for Economics and Business Administration, Kobe University); Takehiko Yamato (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology)
    Abstract: We study market exchange in the laboratory by a multiethnic experiment in Kenya. The subjects of our experiment are of three ethnicities, Kikuyu, Luo, and Kalenjin. Our model contains two types of consumers and two kinds of commodities, and three competitive equilibria exist. The two equilibria with the lowest, and highest relative prices are beneficial for one type of the consumers, and the intermediate price gives an equitable allocation. The tatonnement dynamics however predict that relative prices diverge from the intermediate equilibrium towards the lowest equilibrium or the highest equilibrium depending on initial prices. In order to examine how much effect the ethnicities of subjects have on the equilibrium selection, we conducted manual experiments of pit market trading with different combinations of ethnicities of subjects. Our result shows strong support for the convergence to the intermediate equilibrium when Kalenjin subjects participated, whereas no such data are obtained without them. In addition, the frequencies of transactions with Kalenjin subjects were significantly less than that with the other subjects only, and the less frequent transactions resulted in the more efficient outcomes of the experimental market.
    Keywords: Economic Experiment, Kenya, Pit Market, Perfect Competition, Multiple Equilibria
    JEL: C92 D51
    Date: 2011–03

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