nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2015‒06‒13
four papers chosen by
Matthew Baker
City University of New York

  1. Ancestry, Language and Culture By Spolaore, Enrico; Wacziarg, Romain
  2. Evolutionary stability in asymmetric oligopoly: A non-Walrasian result By Leininger, Wolfgang; Moghadam, Hamed M.
  3. The Effect of Board Directors from Countries with Different Genetic Diversity Levels on Corporate Performance By Delis, Manthos; Gaganis, Chrysovalantis; Hasan, Iftekhar; Pasiouras, Fotios
  4. The evolutionary advantage of cooperation By Ole Peters; Alexander Adamou

  1. By: Spolaore, Enrico; Wacziarg, Romain
    Abstract: We explore the interrelationships between various measures of cultural distance. We …first discuss measures of genetic distance, used in the recent economics literature to capture the degree of relatedness between countries. We next describe several classes of measures of linguistic, religious, and cultural distances. We introduce new measures of cultural distance based on differences in average answers to questions from the World Values Survey. Using a simple theoretical model we hypothesize that ancestral distance, measured by genetic distance, is positively correlated with linguistic, religious, and cultural distance. An empirical exploration of these correlations shows this to be the case. This empirical evidence is consistent with the view that genetic distance is a summary statistic for a wide array of cultural traits transmitted intergenerationally.
    Keywords: Ancestry; Barriers; Cladistics; Cultural distance; Genetic distance; Linguistic distance; Religious distance; World Values Survey
    JEL: F14 O11 O33 O47 O57 Z1
    Date: 2015–06
  2. By: Leininger, Wolfgang; Moghadam, Hamed M.
    Abstract: It is a very well-known result that in terms of evolutionary stability the long-run outcome of a Cournot oligopoly market with finitely many firms approaches the perfectly competitive Walrasian market outcome (Vega-Redondo, 1997). However, in this paper we show that an asymmetric structure in the cost functions of firms may change the long-run outcome. Contrary to Tanaka (1999) we show that the evolutionarily stable price in an asymmetric Cournot oligopoly needs not equal the marginal cost, it may rather equal a weighted average of (different) marginal cost. We apply a symmetrization technique in order to transform the game with asymmetric firms into a symmetric oligopoly game and then extend Schaffer's definition (1988) of a finite population ESS (FPESS) to this setup. Moreover, we show that the FPESS in this game represents a stochastically stable state of an evolutionary process of imitation with experimentation.
    Abstract: Einem bekannten und überraschenden Result zufolge ist das langfristige evolutionäre Gleichgewicht in einem endlichen Cournot-Opligopol durch die Allokation des vollkommenen Wettbewerbsgleichgewichts nach Walras (und nicht die des klassischen Cournot-Gleichgewichts) gekennzeichnet (Vega-Redondo, 1997). Diese Arbeit zeigt, dass dies nicht mehr zutrifft, wenn sich die Firmen asymmetrisch durch unterschiedliche Kostenfunktionen unterscheiden. Das Ergebnis wird durch die Analyse einer symmetrisierten Version des ursprünglich asymmetrischen Spiels erzeugt, in der das Lösungskonzept einer evolutionär stabilen Strategie für endliche Populationen (Schaffer, 1988) für diesen Modellrahmen adaptiert wird. Das Ergebnis widerspricht insbesondere einem Resultat von Tanaka (1999), der das "marginal cost pricing"-Resultat von Vega-Redondo für symmetrische Firmen auch auf einen asymmetrischen Fall übertragen hatte. Die vorliegende Arbeit kritisiert dessen Modell und sein Ergebnis und weist ein "average cost pricing"-Resultat als evolutionär stabile Oligopollösung nach.
    Keywords: Cournot oligopoly,asymmetry,finite population evolutionary stable strategy,stochastic stability
    JEL: C72 C73 D43 L13
    Date: 2014
  3. By: Delis, Manthos; Gaganis, Chrysovalantis; Hasan, Iftekhar; Pasiouras, Fotios
    Abstract: We link genetic diversity in the country of origin of firms’ board members with corporate performance via board members’ nationality. We hypothesize that our approach captures deep-rooted differences in cultural, institutional, social, psychological, physiological, and other traits that cannot be captured by other recently measured indices of diversity. Using a panel of firms listed in the North American and U.K. stock markets, we find that adding board directors from countries with different levels of genetic diversity (either higher or lower) increases firm performance. This effect prevails when we control for a number of cultural, institutional, firm-level, and board member characteristics, as well as for the nationality of the board of directors. To identify the relationship, we use as instrumental variables for our diversity indices the migratory distance from East Africa and the level of ultraviolet exposure in the directors’ country of nationality.
    Keywords: Genetic diversity; corporate performance; nationality of board members
    JEL: G0 G00 G30 M21
    Date: 2015–06–01
  4. By: Ole Peters; Alexander Adamou
    Abstract: The present study asks how cooperation and consequently structure can emerge in many different evolutionary contexts. Cooperation, here, is a persistent behavioural pattern of individual entities pooling and sharing resources. Examples are: individual cells forming multicellular systems whose various parts pool and share nutrients; pack animals pooling and sharing prey; families firms, or modern nation states pooling and sharing financial resources. In these examples, each atomistic decision, at a point in time, of the better-off entity to cooperate poses a puzzle: the better-off entity will book an immediate net loss -- why should it cooperate? For each example, specific explanations have been put forward. Here we point out a very general mechanism -- a sufficient null model -- whereby cooperation can evolve. The mechanism is based the following insight: natural growth processes tend to be multiplicative. In multiplicative growth, ergodicity is broken in such a way that fluctuations have a net-negative effect on the time-average growth rate, although they have no effect on the growth rate of the ensemble average. Pooling and sharing resources reduces fluctuations, which leaves ensemble averages unchanged but -- contrary to common perception -- increases the time-average growth rate for each cooperator.
    Date: 2015–06

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