nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2015‒11‒15
seven papers chosen by
Matthew Baker
City University of New York

  1. Equality concerns and the limits of self-governance in heterogeneous populations By Lata Gangadharan; Nikos Nikiforakis; Marie Claire Villeval
  2. Is Poverty in the African DNA (Gene)? By Asongu, Simplice; Kodila-Tedika, Oasis
  3. The neural bases of framing effects in social dilemmas By Julian Macoveanu; Thomas Zoëga Ramsøy; Martin Skov; Hartwig R. Siebner; Toke Reinholt Fosgaard
  4. Genetic Distance and Cognitive Human Capital: A Cross-National Investigation By Kodila-Tedika, Oasis; Asongu, Simplice
  5. Seven centuries of European economic growth and decline By Roger Fouquet; Stephen Broadberry
  6. India and the great divergence: an Anglo-Indian comparison of GDP per capita, 1600–1871 By Stephen Broadberry; Johann Custodis; Bishnupriya Gupta
  7. The health hump By Strulik, Holger

  1. By: Lata Gangadharan (Department of Economics, Monash University, Clayton, Australia); Nikos Nikiforakis (Social Science Division, New York University Abu Dhabi, P.O. Box 129188, Abu Dhabi, United Arab Emirates); Marie Claire Villeval (Université de Lyon, F-69007, France; CNRS, GATE Lyon St Etienne, 93, Chemin des Mouilles, F-69130, Ecully, France)
    Abstract: Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality. Agents’ concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism which allows individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no tension between efficiency and equality – the mechanism permits group to obtain maximum efficiency. This is not the case in heterogeneous populations where individuals derive different benefits from cooperation. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest that equality concerns can impose limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.
    Keywords: Communication, rewards, cooperation, normative conflict, heterogeneity
    JEL: C92 H41 D74
    Date: 2015
  2. By: Asongu, Simplice; Kodila-Tedika, Oasis
    Abstract: A 2015 World Bank report on attainment of Millennium Development Goals concludes that the number of extremely poor has dropped substantially in all regions with the exception of Sub-Saharan Africa. We assess if poverty is in the African gene by revisiting the findings of Ashraf and Galor (2013, AER) and reformulating the ‘Out of Africa Hypothesis’ into a ‘Genetic Diversity Hypothesis’ for a ‘Within Africa Analysis’. We motivate this reformulation with five shortcomings arising for the most part from the 2015 findings of the African Gerome Variation Project, notably: limitations in the concept of space, African dummy in genetic diversity, linearity in migratory patterns, migratory origins and underpinnings of genetic diversity in Africa. Ashraf and Galor have concluded that cross-country differences in development can be explained by genetic diversity in a Kuznets pattern. Our results from an exclusive African perspective confirm the underlying hypothesis in a contemporary context, but not in the historical analysis. From a historical context, the nexus is U-shaped for migratory distance, mobility index and predicted diversity while for the contemporary analysis; it is hump-shaped for ancestry-adjusted predicted diversity. Hence, poverty is not in the African gene from a within-Africa comparative standpoint. Policy implications are discussed.
    Keywords: Africa; Genetic diversity; Comparative economic development
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2015–04
  3. By: Julian Macoveanu (Danish Research Centre for Magnetic Resonance, Copenhagen University Hospital Hvidovre); Thomas Zoëga Ramsøy (Center for Decision Neuroscience, Dept. of Marketing, Copenhagen Business School); Martin Skov (Center for Decision Neuroscience, Dept. of Marketing, Copenhagen Business School); Hartwig R. Siebner (Danish Research Centre for Magnetic Resonance, Copenhagen University Hospital Hvidovre); Toke Reinholt Fosgaard (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: Human behavior in social dilemmas is strongly framed by the social context, but the mechanisms underlying this framing effect remains poorly understood. To identify the behavioral and neural responses mediating framing of social interactions, subjects underwent functional Magnetic Resonance Imaging while playing a Prisoners Dilemma game. In separate neuroimaging sessions, the game was either framed as a cooperation game or a competition game. Social decisions where subjects were affected by the frame engaged the hippocampal formation, precuneus, dorsomedial prefrontal cortex and lateral temporal gyrus. Among these regions, the engagement of the left hippocampus was further modulated by individual differences in empathy. Social decisions not adhering to the frame were associated with stronger engagement of the angular gyrus and trend increases in lateral orbitofrontal cortex, posterior intraparietal cortex, and temporopolar cortex. Our findings provide the first insight into the mechanisms underlying framing of behavior in social dilemmas, indicating increased engagement of the hippocampus and neocortical areas involved in memory, social reasoning and mentalizing when subjects make decisions that conform to the imposed social frame.
    Keywords: Social reasoning, prisoners dilemma, fMRI, framing
    JEL: C90
    Date: 2015–11
  4. By: Kodila-Tedika, Oasis; Asongu, Simplice
    Abstract: This paper explores the determinants of intelligence by focusing on the role played by barriers to the diffusion of competence and human capital. The results based on cross-sectional data from 167 countries consisting of 1996-2009 averages suggest that, genetic distance to global frontiers has a negative relationship with human capital. Countries that are genetically far from leading nations tend to have lower levels of human capital with the negative correlation from the USA frontier higher relative to the UK frontier. The sign is consistent with the relationship of genetic diversity and robust to the control of macroeconomic, geographical, institutional and influential variables. Policy implications are discussed.
    Keywords: Intelligence, Human Capital, Genetic distance
    JEL: F15 G15 N10 O16 O50
    Date: 2015–04
  5. By: Roger Fouquet; Stephen Broadberry
    Abstract: This paper investigates very long run pre-industrial economic development. New annual GDP per capita data for six European countries over the last seven hundred years paint a clearer picture of the history of European economic development. First, the paper confirms that sustained growth has been a recent phenomenon, but rejects the argument that there was no long run growth in living standards before the Industrial Revolution. Instead, the evidence demonstrates the existence of numerous periods of economic growth before the nineteenth century - unsustained, but raising GDP per capita. It also shows that many of these economies experienced substantial economic decline. Thus, rather than being stagnant, pre-nineteenth century European economies experienced a great deal of change. Finally, it offers some evidence that, from the nineteenth century, these economies increased the likelihood of being in a phase of economic growth and reduced the risk of being in a phase of economic decline.
    Keywords: history of economic development; economic growth; economic decline
    JEL: E01 N13 O11
    Date: 2015
  6. By: Stephen Broadberry; Johann Custodis; Bishnupriya Gupta
    Abstract: Estimates of Indian GDP are constructed from the output side for 1600-1871, and combined with population data. Indian per capita GDP declined steadily during the seventeenth and eighteenth centuries before stabilising during the nineteenth century. As British growth increased from the mid-seventeenth century, India fell increasingly behind. Whereas in 1600, Indian per capita GDP was over 60% of the British level, by 1871 it had fallen to less than 15%. These estimates place the origins of the Great Divergence firmly in the early modern period, but also suggest a relatively prosperous India at the height of the Mughal Empire. They also suggest a period of "strong" deindustrialisation during the first three decades of the nineteenth century, with a small decline of industrial output rather than just a declining share of industry in economic activity.
    Keywords: Britain; comparison; Indian GDP
    JEL: N10 N30 N35 O10 O57
    Date: 2015–01
  7. By: Strulik, Holger
    Abstract: In this paper, I suggest a novel explanation for a hump-shaped ageconsumption profile, based on human aging. The model integrates health in the utility function and utilizes recent estimates on the effects of health on the marginal utility of consumption. The parsimonious model has a closed-form solution for the age of peak consumption and the consumption level at that age relative to initial consumption. A calibration of the model with data from gerontology produces an empirically plausible hump in consumption.
    Keywords: health,aging,life-cycle consumption
    JEL: D91 E21 I10
    Date: 2015

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