nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2015‒06‒20
five papers chosen by
Matthew Baker
City University of New York

  1. Does It Matter Where You Came From? Ancestry Composition and Economic Performance of U.S. Counties, 1850-2010 By Scott Fulford; Ivan Petkov; Fabio Schiantarelli
  2. Gauge field theory of market dynamics: Toward a solution of the "man vs. men" dilemma By Yang, Yingrui
  3. The historical determinants of language status in Sub-Saharan Africa By Katalin Buzasi
  4. The economics of radical uncertainty By Ormerod, Paul
  5. Decision-making under radical uncertainty: An interpretation of Keynes' Treatise By Marsay, David

  1. By: Scott Fulford (Boston College); Ivan Petkov (Boston College); Fabio Schiantarelli (Boston College; IZA)
    Abstract: The United States provides a unique laboratory for understanding how the cultural, institutional, and human capital endowments of immigrant groups shape economic outcomes. In this paper, we use census micro-sample information to reconstruct the country-of-ancestry distribution for US counties from 1850 to 2010. We also develop a county-level measure of GDP per capita over the same period. Using this novel panel data set, we investigate whether changes in the ancestry composition of a county matter for local economic development and the channels through which the cultural, institutional, and educational legacy of the country of origin affects economic outcomes in the US. Our results show that the evolution of the country-of-origin composition of a county matters. Moreover, the culture, institutions, and human capital that the immigrant groups brought with them and pass on to their children are positively associated with local development in the US. Among these factors, measures of culture that capture attitudes towards cooperation play the most important and robust role. Finally, our results suggest that while fractionalization of ancestry groups is positively related with county GDP, fractionalization in attributes such as trust is negatively related to local economic performance.
    Keywords: Immigration, Ethnicity, Ancestry, Economic Development, Culture, Institutions
    JEL: J15 N31 N32 O10 Z10
    Date: 2015–05–15
  2. By: Yang, Yingrui
    Abstract: The current economics and psychology are developed within the Newtonian tradition in physics from both conceptual and instrumental perspectives. This paper aims to integrate economics and cognitive science by applying gauge field theory of modern theoretical physics. Many controversies between normative theories and behavioral theories are characterized by the “man vs. men” dilemma. Gauge potential and gauge field strength is constructed at both the man-level and the men-level in order to satisfy the principle of gauge invariance. To maintain the Lagrangian density function invariant, the gauge transformations of the first kind and the second kind are performed at the man-level and the men-level, respectively. The market dynamics is modeled by the logic of electrodynamics. The interactions of the market and individual participants are formulated by the logic of electromagnetic coupling. In establishing the market dynamic equations, individual utility function serves as gauge function and efficiency provides gauge freedom.
    Keywords: bounded rationality; economic rational man; electrodynamics; gauge theory; market dynamics; cognitive field
    JEL: A1 A12 C0 C02 D0 D01 D03
    Date: 2015–04–20
  3. By: Katalin Buzasi
    Abstract: Languages are one of the most naturally evolving human institutions. Although the status of languages is closely associated with the well-being of their speakers in multilingual societies, this issue gains only a marginal attention in economics and development studies. This paper aims to reveal the long-term determinants of the status of languages in Sub-Saharan Africa, one of the most linguistically fragmented areas of the world. Based on economic, anthropological and historical studies, we identify the following factors that are likely to have long-term effect on the current status of African languages: geography, precolonial contact with Europeans and the Arabs (Islam), precolonial development of indigenous societies, Christian missions and colonial policies. The main data sources are the Ethnologue, the Joshua Project, Murdock’s Ethnographic Atlas, Roome’s map on the location of missions, various sources on the first Bible translations in African languages, and geographical data available online in shapefile and raster format. Using OLS and IV estimation techniques, we find that indigenous groups with relatively high socio-economic development before the European dominance, early Bible translation and relatively large share within current country borders are less likely to have their language in an endangered state today. Geographical variables and the nature of colonial policy seem to affect current language status indirectly through their impact on socio-economic development and missionary activities. The counterfactual analysis suggests that the contact with Europeans contributed to higher polarization in terms of language status.
    Keywords: Sub-Saharan Africa, language status, precolonial socio-economic development, European colonization, Christian missions, counterfactual analysis.
    Date: 2015–06
  4. By: Ormerod, Paul
    Abstract: In situations of what we now describe as radical uncertainty, the core model of agent behaviour, of rational autonomous agents with stable preferences, is not useful. Instead, a different principle, in which the decisions of an agent are based directly on the decisions and strategies of other agents, becomes the relevant core model. Preferences are not stable, but evolve. It is not a special case in such circumstances, but the general one. The author provides empirical evidence to suggest that as a description of behaviour in the modern world, economic rationality is applicable in a declining number of situations. He discusses models drawn from the modern literature on cultural evolution in which imitation of others is the basic strategy, and suggests a heuristic way of classifying situations in which the different models are relevant. The key point is that in situations where radical uncertainty is present, we require theoretical 'null' models of agent behaviour which are different from those of economic rationality. Under uncertainty, fundamentally different behavioural rules are 'rational'. The author gives an example of a very simple pure sentiment model of the business cycle, in which agents use very simple heuristic decision rules. It is nevertheless capable of approximating a number of deep features of output growth over the cycle.
    Keywords: uncertainty,imitation,evolution,agent-based model,sentiment,business cycle
    JEL: D81 E32
    Date: 2015
  5. By: Marsay, David
    Abstract: Keynes' mathematical Treatise addresses what some call 'radical uncertainty', which he thought endemic in world affairs and whose appreciation underpinned much of his later work. In contrast, the mainstream view in economics, as elsewhere, has been that even if radical uncertainty exists, either there is in principle nothing that can ever be done about it, or that even if one could in theory do something about it then the institutions required would be unreliable, and one would be better off without them. Thus the mainstream has worked as if it were realistic to ignore even the possibility of radical uncertainty. But one needs some conceptualisation of radical uncertainty, such as Keynes', before one can make such judgments. This paper presents an interpretation, to inform debate. The viewpoint taken here is mathematical, but this is not to deny the value of other views.
    Keywords: mathematical models,equilibrium conditions,stability conditions,evolutionary games,policy,regulation,crisis management
    JEL: C62 G18 H12
    Date: 2015

This nep-evo issue is ©2015 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.