nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒12‒29
eight papers chosen by
Matthew Baker
City University of New York

  1. Evolution of cooperation in social dilemmas: Signaling internalized norms By Müller, Stephan; von Wangenheim, Georg
  2. Culture: Persistence and Evolution By Giavazzi, Francesco; Petkov, Ivan; Schiantarelli, Fabio
  3. It's Raining Men! Hallelujah? By Pauline Grosjean; Rose Khattar
  4. The Distribution of Individual Conformity under Social Pressure across Societies By Michaeli, Moti; Spiro, Daniel
  5. Regional Transformation: Institutional Change and Economic Evolution in Regions By Markus Grillitsch
  6. Further Evidence on the Link between Pre-Colonial Political Centralization and Comparative Economic Development in Africa By Michalopoulos, Stelios; Papaioannou, Elias
  7. Micro and macro policies in the Keynes + Schumpeter evolutionary models By Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Tania Treibich
  8. An Evolutionary Optimization Approach to Risk Parity Portfolio Selection By Ronald Hochreiter

  1. By: Müller, Stephan; von Wangenheim, Georg
    Abstract: The article suggests a new explanation for cooperation in large, unstructured societies that avoids the restrictions required in most previous attempts. Our explanation deals with the role of internalized norms. Even internalized norms, i.e. norms that alter the perceived utility from acting in a cooperative or uncooperative way, will not help to overcome a dilemma in an unstructured society, unless individuals are able to signal their property of being a norm bearer. Only when having the norm may be communicated in a reliable way, can the picture change. We derive necessary and sufficient conditions for cooperation to be part of an asymptotically stable equilibrium of an evolutionary dynamics of signaling norm internalization, behavior and norm adoption. These conditions put the signaling costs of norm-adopters and non-adopters, the strength of the social norm and two parameters measuring the cost of cooperation into relation with each other.
    Keywords: evolution,cooperation,signaling
    JEL: A13 D02 D21
    Date: 2014
  2. By: Giavazzi, Francesco; Petkov, Ivan; Schiantarelli, Fabio
    Abstract: This paper presents evidence on the speed of evolution (or lack thereof) of a wide range of values and beliefs of different generations of European immigrants to the US. The main result is that persistence differs greatly across cultural attitudes. Some, for instance deep personal religious values, some family and moral values, and political orientation converge very slowly to the prevailing US norm. Other, such as attitudes toward cooperation, redistribution, effort, children's independence, premarital sex, and even the frequency of religious practice or the intensity of association with one's religion, converge rather quickly. The results obtained studying higher generation immigrants differ greatly from those found when the analysis is limited to the second generation, as typically done in the literature, and they imply a lesser degree of persistence than previously thought. Finally, we show that persistence is “culture specific" in the sense that the country from which one's ancestors came matters for the pattern of generational convergence.
    Keywords: beliefs; culture; evolution; immigration; integration; persistence; transmission; values
    JEL: A13 F22 J00 J61 Z1
    Date: 2014–06
  3. By: Pauline Grosjean (School of Economics, Australian School of Business, the University of New South Wales); Rose Khattar (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: We document the implications of missing women in the short and long run. We exploit a natural historical experiment, which sent large numbers of male convicts and far fewer female convicts to Australia in the 18th and 19th century. In areas with higher sex ratios, women historically married more, worked less, and were less likely to occupy high-rank occupations. Today, people have more conservative attitudes towards women working, women are still less likely to have high-ranking occupations, and they earn lower wages. We document the role of vertical cultural transmission and of marriage homogamy in sustaining cultural persistence. Our results are robust to controlling for a wide array of geographic and historical controls, which determined spatial variation in the sex ratio, as well as present-day controls and to instrumenting the overall sex ratio by the sex ratio among convicts.
    Keywords: Culture, gender roles, sex ratio, natural experiment, Australia
    JEL: I31 N37 J16
    Date: 2014–10
  4. By: Michaeli, Moti (Department of Economics and The Center for the Study); Spiro, Daniel (Dept. of Economics, University of Oslo)
    Abstract: This paper studies the aggregate distribution of declared opinions and behavior when heterogeneous individuals make the trade-off between being true to their private opinions and conforming to an endogenous social norm. The model sheds light on how various punishment regimes induce conformity or law obedience, and by whom, and on phenomena such as societal polarization, unimodal concentration and alienation. In orthodox societies, individuals will tend to either fully conform or totally ignore the social norm, while individuals in liberal societies will tend to compromise between these two extremes. Furthermore, the degree of orthodoxy determines whether those who fairly agree with the norm or those who strongly disapprove it will conform. Likewise, the degree of liberalism determines which individuals will compromise the most. In addition, orthodox societies may adapt norms that are skewed with respect to the private opinions in society, while liberal societies will not do so.
    Keywords: Social pressure; Conformity; Liberal; Orthodox; Compliance
    JEL: D01 D30 D70 K42 Z10 Z12 Z13
    Date: 2013–12–30
  5. By: Markus Grillitsch
    Abstract: The overall objective of this paper is to contribute conceptually to the questions why and how regions transform and it joins the debate on economic evolution and institutional change. The paper addresses the challenge of how to conceptualise the interdependencies of institutions of different types and spatial scales. It aims at developing a conceptual framework that i) appreciates the variety of institutional forms and the multi-scalar nature of institutional landscapes, ii) is tangible enough for operationalization in the context of empirical research, and iii) contributes to our understanding about institutional change and economic evolution in regions. The paper offers a review on how institutions have been conceptualised in the context of evolutionary economic geography, a proposal for understanding regional institutional frameworks and institutional change through a novel way of conceptualising institutional layering, a clear distinction between concepts such as agency, networks, social structures and institutional layers, and a discussion about how this can improve our understanding about regional transformation. The concept of institutional layering contributes to the literature on institutional change and institutional complementarity. Important mechanisms and drivers of institutional change within and between institutional layers are discussed. The emphasis in this paper lies on the dynamic interplay between institutional layers. One of the main advantages of the concept of institutional layering is that it illuminates the causality of institutional change. It demands to identify which institutional layer changes how and because of what reason, appreciating also the role of agency and power. In this context, the literature on institutional complementarity underlines the importance of interdependencies between different types of institutions for institutional change as well as economic outcomes. The concept of institutional layering contributes by providing an analytical framework for studying these interdependencies. Furthermore, several mechanisms are identified how the concept of institutional layering contributes to our understanding of regional transformation. The variety and connectedness of institutional layers in a region have an effect on learning and knowledge exchange, the probability to benefit from related variety, the forming of collective interests and resources, the exploration of path plasticity as well as institutional dynamics. Depending on the degree of variety and connectedness of institutional layers, regions will therefore experience differences in the speed of economic evolution, resilience, and the likelihood for continuous or disruptive changes. Using the two dimensions, variety and connectedness of institutional layers, the paper moves towards a typology of regions and relates it to existing empirical literature.
    Keywords: Institutions; evolutionary economic geography; geography; regional transformation;
    JEL: B52 O43
    Date: 2014–11
  6. By: Michalopoulos, Stelios; Papaioannou, Elias
    Abstract: We examine the link between pre-colonial statehood and contemporary regional African development, as reflected in satellite images on light density at night. We employ a variety of historical maps to capture the former. Our within-country analysis reveals a strong positive correlation between pre-colonial political centralization and contemporary development (and urbanization). If anything, the association strengthens when we account for measurement error on the historical maps of pre-colonial political organization.
    Keywords: Africa; development; ethnicity; institutions; state capacity
    JEL: O10 O40 O43
    Date: 2014–11
  7. By: Giovanni Dosi (Laboratory of Economics and Management); Mauro Napoletano (OFCE); Andrea Roventini (Department of economics); Tania Treibich (Maastricht University)
    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
    JEL: C63 E32 E52 G21 O4 E6
    Date: 2014–11
  8. By: Ronald Hochreiter
    Abstract: In this paper we present an evolutionary optimization approach to solve the risk parity portfolio selection problem. While there exist convex optimization approaches to solve this problem when long-only portfolios are considered, the optimization problem becomes non-trivial in the long-short case. To solve this problem, we propose a genetic algorithm as well as a local search heuristic. This algorithmic framework is able to compute solutions successfully. Numerical results using real-world data substantiate the practicability of the approach presented in this paper.
    Date: 2014–11

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.