nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒11‒07
seven papers chosen by
Matthew Baker
City University of New York

  1. Co-evolutionary Patterns in Regional Knowledge Bases and Economic Structure: Evidence from European Regions By Francesco Quatraro
  2. Tax Compliance Social Norms and Institutional Quality: An Evolutionary Theory of Public Good Provision By Panayiotis Nicolaides
  3. Behavioral Economics of Crime Rates and Punishment Levels By Saori Chiba; Kaiwen Leong
  4. An approximate dual-self model and paradoxes of choice under risk By Fudenberg, Drew; Levine, David K.; Maniadis, Zacharias
  5. Doing it now or later with payoff externalities: Experimental evidence on social time preferences By Giovanni Ponti; Ismael Rodríguez Lara; Daniela Di Cagno
  6. Transition to Modern Growth: the Role of Technological Progress and Adult Mortality By Davide Fiaschi; Tamara Fioroni
  7. A Brief History of Equality By Geoffrey Brennan; Gordon Menzies; Michael Munger

  1. By: Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: This paper analyses the co-evolutionary patterns of structural change in knowledge and economics. The former is made operational through an analysis of co-occurrences of technological classes in patent documents in order to derive indicators of coherence, variety and cognitive distance. The latter is made operational in a synthetic way by implementing shift-share analysis which decomposes labour productivity growth into effects caused by changes in the allocation of employment, those ascribed to intra-sector productivity growth, and those caused by interaction of these two components. The results of the analysis conducted on a sample of 227 European regions show that increasing variety is associated with the reallocation of the workforce across sectors whereas within-sector productivity is associated with high levels of both coherence and cognitive distance of the regional knowledge base.
    Keywords: Recombinant knowledge, Coherence, Variety, Regional structural change, Shift-share analysis,
    Date: 2014–07–15
  2. By: Panayiotis Nicolaides
    Abstract: This paper presents an evolutionary theory of public good provision. The framework analyses the relationship between endogenous tax compliance norms, formed by the interactions of rationally-bounded individuals in a network, and the quality of institutions that collect taxes and distribute the public good to the individuals. Conditions for the level of public good utility are derived and illustrated on the "Public Good Provision Hypersurface"; a two-dimensional manifold that describes the relationship between norms, institutional quality and public good provision. I show that the effectiveness of the government to collect taxes increases the determinacy of public good provision but does not ensure its maximisation, which depends also on the level of wasteful government expenditure. If the government is ineffective in performing audits, the welfare from public good provision becomes subject to social norms. Lastly, a condition is derived at which social norms of tax compliance can act as a substitute for enforcement and can result in the maximisation of public good utility.
    Keywords: Taxation; Tax compliance; Social norms Public goods, Government waste
    JEL: H26 H41 C73
    Date: 2014–10
  3. By: Saori Chiba; Kaiwen Leong
    Abstract: Empirical studies have shown, paradoxically, that increasing the probability of apprehension can correlate with an increase in the total number of criminal actions. To examine this phenomenon, this paper develops a theory of "personal rules" based on the tradeoff between oneÕs self-image of criminal productivity and the temptation Ð salience of the present Ð of taking the easy way out by committing a crime. This theory analyzes transformation of lapses into precedents that undermine future self-restraint. The foundation for this transformation is imperfect recall of oneÕs own criminal productivity within certain defined parameters, which leads people to draw inaccurate inferences from their past actions. Rationalization may lead to overestimation of the expected utility of committing a crime when the opportunity presents itself.
    Keywords: Crime, Imperfect Recall,Willpower.
    JEL: D03 D81 K42
    Date: 2014–10
  4. By: Fudenberg, Drew; Levine, David K.; Maniadis, Zacharias
    Abstract: We derive a simplified version of the model of Fudenberg and Levine, 2006 and Fudenberg and Levine, 2011 and show how this approximate model is useful in explaining choice under risk. We show that in the simple case of three outcomes, the model can generate indifference curves that “fan out†in the Marschak–Machina triangle, and thus can explain the well-known Allais and common ratio paradoxes that models such as prospect theory and regret theory are designed to capture. At the same time, our model is consistent with modern macroeconomic theory and evidence and generates predictions across a much wider set of domains than these models.
    Date: 2014
  5. By: Giovanni Ponti (Universidad de Alicante); Ismael Rodríguez Lara (Universidad de Alicante); Daniela Di Cagno (School of Government)
    Abstract: We report experimental evidence on the effects of social preferences on intertemporal decisions. To this aim, we set up an intertemporal Dictator Game and investigate whether (and how) subjects change theirchoices, compared with those they had taken in absence of any payoff externality in a previous stage of the experiment. We run two treatments -INFO and BELIEF, respectively- depending on whether Dictators know -or are asked to elicit- their assigned Recipients' risk and time preferences. We find that high (own) risk aversion is associated with low (own) discounting. We also find that (heterogeneous) socialtime preferences are significant determinants of choices, in that Dictators display a marked propensityto account for the Recipients' intertemporal concerns.
    Keywords: intertemporal decisions, time preferences, social preferences.
    Date: 2014–09
  6. By: Davide Fiaschi; Tamara Fioroni
    Abstract: This paper presents a model inspired by the Unified Growth Theory, where reductions in adult mortality together with improvements in technological progress are the deep causes of the transition from a Traditional (Malthusian) Regime to a Pre-Modern Regime, characterized by the accumulation of fixed capital only, and finally, to a Modern Regime, characterized by the joint accumulation of both fixed and human capital. A calibrated version of the model is able to reproduce the dynamics of the UK economy in the period 1541-1914, matching both the periods of transition and the pattern of main macroeconomic variables. UK growth before the mid-nineteen th century ap- pears to be mainly due to technological progress, while thereafter, the decline in adult mortality and factors accumulation played the major role. Finally, fertility decline during the nineteenth century has only a marginal impact on growth because it is more than balanced by the increase in adult survival.
    Keywords: Unified Growth Theory, Human Capital, Adult mortality, Nonlinear Dynamics, Endogenous Fertility, Industrial Revolution.
    JEL: O10 O40 I20
    Date: 2014–09–01
  7. By: Geoffrey Brennan (Australian National University and Duke University); Gordon Menzies (Economics Discipline Group, University of Technology, Sydney); Michael Munger (Duke University)
    Abstract: We explicate an iron law of intergenerational transmission of income dispersion. The same mechanism that limited income disparities, as population and prosperity increased through much of the early industrial revolution, will now sharply exaggerate inequality. The reason is that, for the first time in human history, richer parents are having fewer surviving children. Moreover, the effects of this fact in a setting like the current, where average family size is small and economic growth is strong, are quite marked. The social contract implicit in free market liberalism may require ongoing policy intervention to lean against the scolding winds of inequality.
    Date: 2014–01–01

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