nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2016‒01‒29
three papers chosen by
Matthew Baker
City University of New York

  1. Conceptual model of the concept of the territorial cohesion By Zbigniew Mogiła
  2. The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences By Adrian Bruhin; Ernst Fehr; Daniel Schunk
  3. Immigrant Diversity and Complex Problem Solving By Abigail Cooke; Thomas Kemeny

  1. By: Zbigniew Mogiła (Wrocław Regional Development Agency)
    Abstract: Although elements of spatially-oriented analysis have been long used to augment production functions, relatively less attention has been paid so far to implementation of territory within the neoclassical utility theory. Taking into account territorial heterogeneity and the importance of geographical-temporal distance, we introduce the category of social territorial utility and incorporate it into the neoclassical optimization framework aiming to show how it might influence the production process. The main objective of this paper is to present how territorial utility might be formally incorporated in the mainstream economics within the framework of the model of territorial optimum. The expected social territorial utility is shaped by social consensus and is reflected by public policies. It poses a new endogenous force to disturb the spatial equilibrium which is defined – among others – by NEG models as an utility equalization across different locations. The theory of social territorial utility shows that such an equilibrium may only be apparent. There might be strong endogenously driven motivations to change the spatial status-quo even though NEG models suggest otherwise. Those motivations may vary considerably among regions and their source lies in market failures. With the model of territorial optimum we clearly show that one ought not to analyse an economic optimisation without taking into account diverse spatial preferences. Using the model of territorial optimum we define and include in the paradigm of mainstream economics the category of territorial cohesion, and organize its structure and indicate its position in the process of development. It is not our purpose to make any normative judgments in this paper. The model of territorial optimum presents a positive approach to territorial cohesion and its implications for regional development. The implications are likely to be very diverse due to differences in expected social territorial utility reflected in policies of regional authorities. We illustrate this by carrying out a scenario analysis for the Polish NUTS-2 region of Dolnośląskie. The main conclusion is that territorial cohesion should not be treated as an absolute category, i.e., the ideal and universal state of the territory.
    Keywords: Territorial cohesion, territorial utility, NEG, neoclassical paradigm, production function
    JEL: R11 R12 R58
    Date: 2015–08
  2. By: Adrian Bruhin (University of Lausanne); Ernst Fehr (University of Zurich); Daniel Schunk (Johannes Gutenberg University of Mainz)
    Abstract: There is vast heterogeneity in the human willingness to weigh others’ interests in decision making. This heterogeneity concerns the motivational intricacies as well as the strength of other-regarding behaviors, and raises the question how one can parsimoniously model and characterize heterogeneity across several dimensions of social preferences while still being able to predict behavior over time and across situations. We tackle this task with an experiment and a structural model of preferences that allows us to simultaneously estimate outcome-based and reciprocity-based social preferences. We find that non-selfish preferences are the rule rather than the exception. Neither at the level of the representative agent nor when we allow for several preference types do purely selfish types emerge. Instead, three temporally stable and qualitatively different other-regarding types emerge endogenously, i.e., without pre-specifying assumptions about the characteristics of types. When ahead, all three types value others’ payoffs significantly more than when behind. The first type, which we denote as strongly altruistic type, is characterized by a relatively large weight on others’ payoffs – even when behind – and moderate levels of reciprocity. The second type, denoted as moderately altruistic type, also puts positive weight on others’ payoff, yet at a considerable lower level, and displays no positive reciprocity while the third type is behindness averse, i.e., puts a large negative weight on others’ payoffs when behind and behaves selfishly otherwise. We also find that there is an unambiguous and temporally stable assignment of individuals to types. Moreover, the three-type model substantially improves the (out-of-sample) predictions of individuals’ behavior across additional games while the information contained in subject-specific parameter estimates leads to no or only minor additional predictive power. This suggests that a parsimonious model with three types captures the bulk of the predictive power contained in the preference estimates.
    Keywords: Social Preferences, Heterogeneity, Stability, Finite Mixture Models
    JEL: C49 C91 D03
    Date: 2016–01–04
  3. By: Abigail Cooke; Thomas Kemeny
    Abstract: In the growing literature exploring the links between immigrant diversity and worker productivity, recent evidence strongly suggests that diversity generates productivity improvements. However, even the most careful extant empirical work remains at some remove from the mechanisms that theory says underlie this relationship: interpersonal interaction in the service of complex problem solving. This paper aims to `stress-test' these theoretical foundations, by observing how the relationship between diversity and productivity varies across workers differently engaged in complex problem solving and interaction. Using a uniquely comprehensive matched employer-employee dataset for the United States between 1991 and 2008, this paper shows that growing immigrant diversity inside cities and workplaces offers much stronger benefits for workers intensively engaged in various forms of complex problem solving, including tasks involving high levels of innovation, creativity, and STEM. Moreover, such effects are considerably stronger for those whose work requires high levels of both problem solving and interaction.
    Keywords: immigration, diversity, complex problem solving, spillovers, productivity, human capital
    Date: 2016–01

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