nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒02‒15
five papers chosen by
Matthew Baker
City University of New York

  1. Trust as a Key Variable of Sustainable Development and Public Happiness: A Historical and Theoretical Example Regarding the Creation of Money By Nicola Genovese; Maria Grazia La Spada
  2. A note on empathy in games By Grohn, Jan; Huck, Steffen; Valasek, Justin Mattias
  3. The Long-Term Effects of Protestant Activities in China By Chen, Yuyu; Wang, Hui; Yan, Se
  4. The Protestant Ethic and Entrepreneurship: Evidence from Religious Minorities from the Former Holy Roman Empire By Nunziata, Luca; Rocco, Lorenzo
  5. The arrival of the new By Luigi Marengo; Paolo Zeppini

  1. By: Nicola Genovese (Professor of Economics, University of Messina); Maria Grazia La Spada (University of Messina, Department of Economics, SEAM)
    Abstract: This article purports to trace the origin of money on the basis of factors in interpersonal relationships, affecting a sustainable development and public happiness, namely trust, reciprocity and the concept of we-rationality. Both the historical approach and the one based on traditional economic theory have been found inadequate mainly because they did not take into account these factors. The hypothesis expounded in the paper is that these values underlaid the beginning of economic activity. Initially economic activity was carried out within small human groups. In such groups interpersonal relations were not based on individual self-interest. As a matter of fact, there is historical evidence supporting the notion that the first exchanges were gift-giving and were made possible by trust and reciprocity as expounded by Polanyi (1957) and Sudgen (2000) among others. When the exchanges strengthened between elements of various groups all with the same values and moral characteristics the process toward the creation of money started, without any intrinsic value and the presence of any superior authority. In the paper it is also hypothesized that the creation of money is one of the basic factors in the progress of economic and social activity, together with ancient phenomena as language ad writing. Finally, the paper advocates that in future the economic activity be permeated by those moral values on which a sustainable development can be based. This will, in turn, increase the rate of economic and social growth.
    Keywords: Sustainable Development, Public Happiness, Origin of Money, Behaviour Economics, Exchanges Between Primitive Populations
    JEL: Q01 A13 B15 E
  2. By: Grohn, Jan; Huck, Steffen; Valasek, Justin Mattias
    Abstract: In this note we shall discuss a concept that - despite its prominence in both Hume (1739) and Smith (1759), its obvious relevance for social behavior, and its not so infrequent use in colloquial language - has never gained a foothold in economic theory: the concept of empathy. Specifically, we illustrate how some insights from the psychological literature on empathy can be incorporated into a standard utility framework, and demonstrate the potential interaction of beliefs and utility through the channel of empathy. -- In diesem Artikel diskutieren wir das Konzept der Empathie. Dieses konnte in der ökonomischen Theorie nie wirklich Fuß fassen, trotz seiner Bedeutung sowohl bei Hume (1739) als auch Smith (1759), seiner offensichtlichen Relevanz für soziales Verhalten und seines durchaus verbreiteten Gebrauchs in der Umgangssprache. Insbesondere zeigen wir, wie einige Erkenntnisse aus der psychologischen Literatur über Empathie in ein Standardkonzept von 'Nutzen' integriert werden können und demonstrieren die potenzielle Interaktion von Erwartungen und Nutzen über den Weg der Empathie.
    Keywords: Empathy,Belief Formation,Preferences
    JEL: D03 D83
    Date: 2014
  3. By: Chen, Yuyu; Wang, Hui; Yan, Se
    Abstract: Does culture, and in particular religion, exert an independent causal effect on long-term economic growth, or do culture and religion merely reflect the latter? We explore this issue by studying the case of Protestantism in China during the late nineteenth and early twentieth centuries. Combining county-level data on Protestant presence in 1920 and socioeconomic indicators in 2000, we find that the spread of Protestantism has generated significant positive effects in long-term economic growth, educational development, and health care outcomes. To better understand whether the relationship is causal, we exploit the fact that missionaries purposefully undertook disaster relief work to gain the trust of the local people. Thus, we use the frequency of historical disasters as an instrument for Protestant distribution. Our IV results confirm and enhance our OLS results. When we further investigate the transmission channels over the long historical period between 1920 and 2000, we find that although improvements in education and health care outcomes account for a sizable portion of the total effects of missionaries’ past activities on today’s economic outcomes, Protestant activities may have also contributed to long-term economic growth through other channels, such as through transformed social values. If so, then a significant amount of China’s growth since 1978 is the result not just of sudden institutional changes but of human capital and social values acquired over a longer historical period.
    Keywords: Protestantism, Economic Growth, Education, Health Care, China
    JEL: I25 N15 N35 O11 O43 Z12
    Date: 2014–01–29
  4. By: Nunziata, Luca; Rocco, Lorenzo
    Abstract: We propose a new methodology for identifying the causal effect of Protestantism versus Catholicism on the decision to become an entrepreneur. Our quasi-experimental research design exploits religious minorities' strong attachment to religious ethics and the exogenous historical determination of religious minorities' geographical distribution in the regions of the former Holy Roman Empire in the 1500s. We analyse European Social Survey data, collected in four waves between 2002 and 2008, and find that religious background has a significant effect on the individual propensity for entrepreneurship, with Protestantism increasing the probability to be an entrepreneur by around 5 percentage points with respect to Catholicism. Our findings are stable across a number of robustness checks, including accounting for migration patterns and a placebo test. We also provide an extended discussion of the assumptions' validity at the basis of our research design. This paper is one of the first attempts to identify a causal effect, rather than a simple correlation, of religious ethics on economic outcomes.
    Keywords: Entrepreneurship, Religion, Culture, Protestantism, Catholicism.
    JEL: J21 J24 Z12 Z13
    Date: 2014–02–11
  5. By: Luigi Marengo; Paolo Zeppini
    Abstract: In this work we present a number of urn models in which, contrary to standard Polya urns, the number of competing alternatives is not given from the outset but may increase with the arrival of innovations. We begin by describing a variant of Polya urns, first introduced by Fred Hoppe, in which balls of previously non existing colours are added with some (declining) probability. We then propose new variants in which the probability of the arrival on new colours is itself subject to adaptive change depending on the success of past innovations. We numerically simulate different specifications of these urns with adaptively changing mutation rate and show that they can account for complex patterns of evolution in which periods of exploration with clusters of innovations are followed by periods in which the dynamics of the system is driven by selection among a stable set of alternatives.
    Date: 2014–04–02

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