nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒12‒08
six papers chosen by
Matthew Baker
City University of New York

  1. Norms Make Preferences Social By Erik Kimbrough; Alexander Vostroknutov
  2. The evolution of inequality aversion in a simplified game of life By Müller, Stephan
  3. Behavioral Economics of Education By Koch, Alexander K.; Nafziger, Julia; Nielsen, Helena Skyt
  4. On the Ethnic Origins of African Development Chiefs and Pre-colonial Political Centralization By Stelios Michalopoulos; Elias Papaioannou
  5. Micro and Macro Policies in Keynes+Schumpeter Evolutionary Models By Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Tania Treibich
  6. Macroeconomic Performance under an Evolutionary Dynamics of Profit Sharing By Gilberto Tadeu Lima; Jaylson Jair Silveira

  1. By: Erik Kimbrough (Simon Fraser University); Alexander Vostroknutov (Maastricht University)
    Abstract: We explore the idea that prosocial behavior in experimental games is driven by social norms imported into the laboratory. Under this view, differences in behavior across subjects is driven by heterogeneity in sensitivity to social norms. We introduce an incentivized method of eliciting individual norm-sensitivity, and we show how it relates to play in public goods, trust, dictator and ultimatum games. We show how our observations can be rationalized in a stylized model of norm-dependent preferences under reasonable assumptions about the nature of social norms. Then we directly elicit norms in these games to test the robustness of our interpretation.
    Keywords: experimental economics, norms, social preferences, conditional cooperation, reciprocity
    JEL: C91 C92 D03
    Date: 2014–10
  2. By: Müller, Stephan
    Abstract: This paper applies the indirect evolutionary approach to study the evolution of inequality aversion in a simplified game of life. The game comprises a dilemma, a problem of coordination, and a problem of distribution as a general framework for the evolution of preferences. In singlegame environments, there emerges a global advantage for inequality-averse individuals in the dilemma and a global disadvantage for inequality-averse players who are favoured by the problem of distribution. The simplified game of life puts these strong predictions into perspective. In particular, selfish and inequality-averse individuals may coexist in the subpopulation, favoured in the problem of distribution.
    Keywords: inequality aversion,evolution,preferences
    JEL: C72 C73
    Date: 2014
  3. By: Koch, Alexander K. (Aarhus University); Nafziger, Julia (Aarhus University); Nielsen, Helena Skyt (Aarhus University)
    Abstract: During the last decade knowledge about human behavior from psychology and sociology has enhanced the field of economics of education. By now research recognizes cognitive skills (as measured by achievement tests) and soft skills (personality traits not adequately measured by achievement tests) as equally important drivers of later economic outcomes, and skills are seen as multi-dimensional rather than one-dimensional. Explicitly accounting for soft skills often implies departing from the standard economic model by integrating concepts studied in behavioral and experimental economics, such as self-control, willingness to compete, intrinsic motivation, and self-confidence. We review how approaches from behavioral economics help our understanding of the complexity of educational investments and outcomes, and we discuss what insights can be gained from such concepts in the context of education.
    Keywords: non-cognitive skills, schooling, educational decision making, soft skills, behavioral economics
    JEL: D03 I20
    Date: 2014–09
  4. By: Stelios Michalopoulos; Elias Papaioannou
    Abstract: We report on recent findings of a fruitful research agenda that explores the importance of ethnic-specific traits in shaping African development. First, using recent surveys from Sub-Saharan African countries, we document that individuals identify with their ethnic group as often as with the nation pointing to the salience of ethnicity. Second, we focus on the various historical and contemporary functions of tribal leaders (chiefs) and illustrate their influence on various aspects of the economy and the polity. Third, we elaborate on a prominent dimension of ethnicity, that of the degree of complexity of pre-colonial political organization. Building on insights from the African historiography, we review recent works showing a strong association between pre-colonial centralization and contemporary comparative development both across and within countries. We also document that the strong link between pre-colonial political centralization and regional development -as captured by satellite images of light density at night- is particularly strong in areas outside the vicinity of the capitals, where due to population mixing and the salience of national institutions ethnic traits play a lesser role. Overall, our evidence is supportive to theories and narratives on the presence of a "dual" economic and institutional environment in Africa.
    JEL: O10 O40 O43 Z1 Z13
    Date: 2014–09
  5. By: Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Tania Treibich
    Abstract: This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, 2010, 2013, 2014) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the economy. The K+S models embed the Schumpeterian growth paradigm into a complex system of imperfect coordination among heterogeneous interacting firms and banks, where Keynesian (demand-related) and Minskian (credit cycle) elements feed back into the meso and macro dynamics. The model is able to endogenously generate long-run growth together with business cycles and major crises. Moreover, it reproduces a long list of macroeconomic and microeconomic stylized facts. Here, we discuss a series of experiments on the role of policies affecting i) innovation, ii) industry dynamics, iii) demand and iv) income distribution. Our results suggest the presence of strong complementarities between Schumpeterian (technological) and Keynesian (demand-related) policies in ensuring that the economic system follows a path of sustained stable growth and employment.
    Keywords: agent-based model, fiscal policy, economic crises, austerity policies, disequilibrium dynamics
    Date: 2014–11–15
  6. By: Gilberto Tadeu Lima; Jaylson Jair Silveira
    Abstract: This paper explores implications for capacity utilization and economic growth driven by effective demand of income distribution featuring the possibility of profit sharing with workers. Firms choose to compensate workers with either a base wage or a share of profits on top of this base wage. In accordance with robust empirical evidence, workers in sharing firms have higher productivity than workers in non-sharing firms. Meanwhile, the joint frequency distribution of employee compensation strategies and labor productivity across firms is evolutionarily time-varying. Two major results carrying relevant theoretical and policy implications obtain from our exploration. First, heterogeneity in employee compensation strategies across firms may emerge as a permanent, long-run equilibrium outcome. Second, in the long run, a higher frequency of profit-sharing firms does not necessarily generate higher rates of capacity utilization and economic growth.
    Keywords: Profit sharing; evolutionary dynamics; income distribution; capacity utilization; economic growth.
    JEL: E12 E25 J33 O40
    Date: 2014–11–07

This nep-evo issue is ©2014 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.