nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2016‒10‒02
six papers chosen by
Matthew Baker
City University of New York

  1. Morality: evolutionary foundations and policy implications By Alger, Ingela; Weibull, Jörgen
  2. A simple characterization of the family of diversity indices By Denis, Davydov; Weber, Shlomo
  3. Dynamics of Socio-Economic systems: attractors, rationality and meaning By Andrzej Nowak; Jørgen Vitting Andersen; Wojciech Borkowski
  4. Dual Decision Processes: Retrieving Preferences when some Choices are Intuitive By Francesco Cerigioni
  5. A Theory of Community Formation and Social Hierarchy By Athey, Susan; Calvano, Emilio; Jha, Saumitra
  6. How Do Rights Revolutions Occur? Free Speech and the First Amendment By Chen, Daniel L.; Yeh, Susan

  1. By: Alger, Ingela; Weibull, Jörgen
    Abstract: Since the publication of Adam Smithís Wealth of Nations, it has been customary among economists to presume that economic agents are purely selfinterested. However, research in experimental and behavioral economics has shown that human motivation is more complex and that observed behavior is often better explained by additional motivational factors such as a concern for fairness, social welfare etc. As a complement to that body of work we have carried out theoretical investigations into the evolutionary foundations of human motivation (Alger and Weibull 2013, 2016). We found that natural selection, in starkly simpliÖed but mathematically well-structured environments, favors preferences that combine self-interest with morality. Roughly speaking, the moral component evaluates oneís own action in terms of what would happen, if, hypothetically, this action were adopted by others. Such moral preferences have important implications for economic behavior. They motivate individuals to contribute to public goods, to give fair o§ers when they could get away with cheap o§ers, and to contribute to social institutions and act in environmentally friendly ways even if their individual impact is negligible.
    Date: 2016–08
  2. By: Denis, Davydov; Weber, Shlomo
    Abstract: Over the last twenty years economists have become increasingly interested whether the diversity enhances or impedes economic and social development of a society that consist of multiple distinct population groups. On the one hand, Sassen (2006) and Florida (2002) claim that ethnic and cultural diversity was a crucial factor in urban development. However, there is another line of research, originated by Mauro (1995) and Easterly and Levine (1997) (see also Ginsburgh and Weber, 2011), showing that an excessive degree of the societal fractionalization may have negative, and sometimes, catastrophic, consequences for economic and societal growth.
    Keywords: axioms; consistency; Diversity index; entropy; fractionalization
    JEL: F51 F63 Z13
    Date: 2016–09
  3. By: Andrzej Nowak (Institute for Social Studies, University of Warsaw - Institute for Social Studies, University of Warsaw,, Florida Atlantic University [Boca Raton]); Jørgen Vitting Andersen (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Wojciech Borkowski (University of Social Sciences and Humanities - University of Social Sciences and Humanities)
    Abstract: Gintis Helbing and go beyond the traditional boundaries of scientific disciplines and offer the integration of major theories of the main disciplines of the social and natural sciences. The theory captures many ideas of social psychology. Several assumptions of the model, however, can be questioned. The hypothesis that social systems are at equilibrium is too narrow, because social systems can also be out of balance. The concept of dynamic attraction shows that the systems may converge to different types of attractors in accordance with the value of control parameters. The notion of rationality of human behavior can be challenged on the basis of new data of psychology, decision sciences and behavioral economics. Often individuals do not process information, but rather copy the choices of others. Individuals interact by both direct and indirect means – if market mechanisms. More importantly, the social dynamic, unlike physical systems, are governed by a sense. Despite these limitations of the theory and Gintis Helbing is an important step in the integration of social sciences.
    Keywords: Complex system,adaptive system,general equilibrium
    Date: 2015–10
  4. By: Francesco Cerigioni
    Abstract: Evidence from cognitive sciences shows that some choices are conscious and reflect individual preferences while others tend to be intuitive, driven by analogies with past experiences. Under these circumstances, usual economic modeling might not be valid because not all choices are the consequence of individual tastes. We here propose a behavioral model that can be used in standard economic analysis that formalizes how conscious and intuitive choices arise by presenting a decision maker composed by two systems. One system compares past decision problems with the one the decision maker faces, and it replicates past behavior when the problems are similar enough (Intuitive choices). Otherwise, a second system is activated and preferences are maximized (Conscious choices). We then present a novel method capable of finding conscious choices just from observed behavior and finally, we provide a choice theoretical foundation of the model and discuss its importance as a general framework to study behavioral inertia.
    Keywords: Dual Processes, Fast and Slow Thinking, Similarity, Revealed Preferences, memory, Intuition
    JEL: D01 D03 D60
    Date: 2016–09
  5. By: Athey, Susan (Stanford University); Calvano, Emilio (Bologna University); Jha, Saumitra (Stanford University)
    Abstract: We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups--communities--that allow repeated interaction. Hierarchies provide incentives for loyalty and allow individuals to trust agents to extent that the agents are actually trustworthy. We contrast these with other plausible institutions for engendering loyalty that require inefficient withholding of trust to support group norms, and are not robust to coalitional deviations. In communities whose members randomly match, we show that social mobility within hierarchies falls as temptations to cheat rise. In communities where individuals can concentrate their trading with pre-selected members, hierarchies where senior members are favored for trade sustain trust even in the presence of proximate nonhierarchical communities. We link these results to the emergence of trust in new market environments and early human societies.
    Date: 2016–08
  6. By: Chen, Daniel L.; Yeh, Susan
    Abstract: Does law shape values? We test a model of law and norms using an area of law where economic incentives are arguably not the prime drivers of social change. From 1958–2008, Democratic judges were more likely than Republicans to favor progressive free speech standards. Using the random assignment of U.S. federal court judges setting geographically-local precedent, we estimate that progressive free speech standards liberalized sexual attitudes and behaviors and increased both crime rates and the spread of sexually transmitted diseases. We then randomly allocated data entry workers to enter newsarticles of court decisions. Progressive decisions liberalized sexual attitudes and shifted norm perceptions for data entry subjects, but not self-reported behavior. These results present evidence of law’s expressive power – with fundamental implications for decision making in social and political settings and for the empirical predictions of theoretical models in these domains.
    Keywords: Law and norms, expressive law, cultural change
    JEL: J12 J16 K42 N32 N42 Z1
    Date: 2016–09

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