nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2015‒09‒11
four papers chosen by
Matthew Baker
City University of New York

  1. The New Economics of Religion By Iyer, Sriya
  2. Evidential equilibria: Heuristics and biases in static games of complete information Working Paper Version By Ali al-Nowaihi; Sanjit Dhami
  3. Identity, language, and conflict: An experiment on ethno-linguistic diversity and group discrimination in two bilingual societies By Maria Paz Espinosa; Enrique Fatas; Paloma Ubeda
  4. "Industrialization and the Fertility Decline" By Raphael Franck; Oded Galor

  1. By: Iyer, Sriya (University of Cambridge)
    Abstract: The economics of religion is a relatively new field of research in economics. This survey serves two purposes – it is backward-looking in that it traces the historical and sociological origins of this field, and it is forward-looking in that it examines the insights and research themes that are offered by economists to investigate religion globally in the modern world. Several factors have influenced the economics of religion: (1) new developments in theoretical models including spatial models of religious markets and evolutionary models of religious traits; (2) empirical work which addresses innovatively econometric identification in examining causal influences on religious behavior; (3) new research in the economic history of religion that considers religion as an independent rather than as a dependent variable; and (4) more studies of religion outside the Western world. Based on these developments, this paper discusses four themes – first, secularization, pluralism, regulation and economic growth; second, religious markets, club goods, differentiated products and networks; third, identification including secular competition and charitable giving; and fourth, conflict and cooperation in developing societies. In reviewing this paradoxically ancient yet burgeoning field, this paper puts forward unanswered questions for scholars of the economics of religion to reflect upon in years to come.
    Keywords: economics of religion
    JEL: Z12
    Date: 2015–08
  2. By: Ali al-Nowaihi; Sanjit Dhami
    Abstract: Standard equilibrium concepts in game theory find it difficult to explain the empirical evidence from a large number of static games including the prisoners dilemma game, the hawk-dove game, voting games, public goods games and oligopoly games. Under uncertainty about what others will do in one-shot games, evidence suggests that people often use evidential reasoning (ER), i.e., they assign diagnostic significance to their own actions in forming beliefs about the actions of other like-minded players. This is best viewed as a heuristic or bias relative to the standard approach. We provide a formal theoretical framework that incorporates ER into static games by proposing evidential games and the relevant solution concept: evidential equilibrium (EE). We derive the relation between a Nash equilibrium and an EE. We illustrate these concepts in the context of the prisoners dilemma game.
    Keywords: Evidential reasoning, game theory, cognitive bias, prisoners dilemma game, oligopoly games, conservative heuristics, radical heuristics, decision making.
    JEL: D03
    Date: 2015–08
  3. By: Maria Paz Espinosa (University of the Basque Country); Enrique Fatas (University of East Anglia); Paloma Ubeda (University of the Basque Country)
    Abstract: Ethno-linguistic diversity has been empirically linked to low provision of public goods. We contribute to this literature analyzing diversity in a lab-in-the-field experiment in which we carefully control for ethno-linguistic diversity in two different bilingual societies, one with a much stronger identity conflict (the Basque Country) than the other (Valencia Country). In both locations, our participants come from different ethno- linguistic cultures (Catalan or Spanish, Basque or Spanish), and interact with other participants from their same background or a different one. We recruit participants using their mother tongue language, and study the effect of homogeneous (with no diversity) or mixed (with ethno-linguistic diversity) natural cultural identities in a nested public goods game with a local and a global public good. The game is constructed to eliminate any tension between efficiency and diversity; so, not contributing to the global (and efficient) public good can be interpreted as willingness to exclude the other group from the benefits of your contribution. Our results strongly support that diversity is strongly context dependent. While diversity in the Basque Country significantly reduces contributions to the global public good, and efficiency, it has no effect in the Valencia Country (if any, the effect is positive, but insignificant). We show that diversity destroys (reinforces) conditional cooperation in the Basque (Valencia) Country. While diversity is associated with overoptimistic empirical beliefs in Valencia, it significantly increases normative group discrimination in Basque Country.
    Keywords: natural identity, ethno-linguistic groups, group effects, norms, discrimination
    Date: 2015–08
  4. By: Raphael Franck; Oded Galor
    Abstract: The research provides the first empirical examination of the hypothesized effect of industrialization on the fertility decline. Exploiting exogenous source of regional variations in the adoption of steam engines across France, the study establishes that industrialization was a major catalyst in the fertility decline in the course of the demographic transition. Moreover, the analysis further suggests that the contribution of industrialization to the decline in fertility plausibly operated through the effect of industrialization on human capital formation. Thus, the study confirms one of the central elements of Unified Growth Theory which hypothesizes that a critical force in the transition from stagnation to growth was by the impact of industrialization on the onset of the demographic transition, via the rise in the demand for human capital.
    Keywords: Economic Growth, Fertility Transition, Human Capital, Industrialization, Steam Engine.
    Date: 2015

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