nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2016‒11‒13
nine papers chosen by
Matthew Baker
City University of New York

  1. Tastes for Desert and Placation: A Reference Point-Dependent Model of Social Preferences By Chen, Daniel L.
  2. In order to stand up you must keep cycling: change and coordination in complex evolving economies By Giovanni Dosi; Maria Enrica Virgillito
  3. Social preferences or sacred values? Theroy and evidence of deontological motivations By Chen, Daniel L.; Schonger, Martin
  4. Unreal Wages? A New Empirical Foundation for the Study of Living Standards and Economic Growth in England, 1260‐1860 By Humphries, Jane; Weisdorf, Jacob
  5. Effects of income redistribution on the evolution of cooperation in spatial public goods games By Zhenhua Pei; Baokui Wang; Jinming Du
  6. Review of "Cultures Merging" by Eric Jones By Schlicht, Ekkehart
  7. Does Reciprocity Persist Over Time? By Gagnon, Nickolas; Noussair, C.
  8. East Side Story: Historical Pollution and Persistent Neighborhood Sorting By Stephan Heblich; Alex Trew; Yanos Zylberberg
  9. Accounting for the ‘Little Divergence’ What drove economic growth in pre-industrial Europe, 1300-1800? By Alexandra M. de Pleijt; Jan Luiten van Zanden

  1. By: Chen, Daniel L.
    Abstract: This paper proposes a reference-point dependent model of social behavior where individuals maximize a three-term utility function: a consumption utility term and two “social” terms. One social term captures a preference for desert (i.e., others getting what we think they deserve) and the other term a preference for the satisfaction of other’s expectations, or to placate them (i.e., them getting what we think they think they deserve). After motivating the modeling assumptions with findings from empirical moral philosophy and evolutionary psychology, I introduce the model and generate some simple comparative statics results, which I then test with experiments. I discuss how the model explains several paradoxes of empirical moral philosophy that are less explicable by current economic models of social preference focusing on outcomes and intentions.
    Keywords: Reference points, social preferences, just desert
    JEL: D6 K2
    Date: 2016–10
  2. By: Giovanni Dosi; Maria Enrica Virgillito
    Abstract: In this work we discuss the main building blocks, achievements and challenges of an evolutionary interpretation of the relation between mechanisms of coordination and drivers of change in modern economies, seen as complex evolving systems. It is an evident stylised fact of modern economic systems that there are forces at work which keep them together and make them grow despite rapid and profound modifications of their industrial structures, social relations, techniques of production, patterns of consumption. We suggest that a fruitful interpretation of the two processes rests in what we call the "bicycle conjecture": in order to stand up you must keep cycling. However, changes and transformation are by nature "disequilibrating" forces. Thus there must be other factors which maintain relatively ordered configurations of the system and allow a broad consistency between the conditions of material reproduction (including income distributions, accumulation, available techniques) and the thread of social relations.
    Keywords: Change, Coordination, Evolutionary Economics, Socio-Economic Systems
    Date: 2016–02–11
  3. By: Chen, Daniel L.; Schonger, Martin
    Abstract: Recent advances in economic theory, largely motivated by experimental findings, have led to the adoption of models of human behavior where a decision-maker not only takes into consideration her own payoff but also others’ payoffs and any potential consequences of these payoffs. Investigations of deontological motivations, where a decision-maker makes her choice not only based on the consequences of a decision but also the decision per se have been rare. We propose an experimental method that can detect an individual’s deontological motivations by varying the probability of the decision-maker’s decision having consequences. It uses two states of the world, one where the decision has consequences and one where it has none. We show that a purely consequentialist decision-maker whose preferences satisfy first-order stochastic dominance will choose the decision that leads to the best consequences regardless of the probability of the consequential state. A purely deontological decision-maker is also invariant to the probability. However, a mixed consequentialist-deontological decision-maker’s choice changes with the probability. The direction of change gives insight into the location of the optimand for one’s duty. We provide a formal interpretation of major moral philosophies and a revealed preference method to detect deontological motivations and discuss the relevance of the theory and method for economics and law.
    Keywords: Consequentialism, deontological motivations, normative commitments, social preferences, revealed preference, decision theory, first order stochastic dominance, random lottery incentive method
    JEL: D6 K2
    Date: 2016–10
  4. By: Humphries, Jane (University of Oxford); Weisdorf, Jacob (University of Southern Denmark)
    Abstract: Existing measures of historical real wages suffer from the fundamental problem that workers’ annual incomes are estimated on the basis of day wages without knowing the length of the working year. We circumvent this problem by presenting a novel wage series of male workers employed on annual contracts. We use evidence of labour market arbitrage to argue that existing real wage estimates are badly off target, because they overestimate the medieval working year but underestimate the industrial one. Our data suggests that modern economic growth began two centuries earlier than hitherto thought and was driven by an ‘Industrious Revolution’.
    Keywords: England; industrial revolution; industrious revolution; labour input; living standards; wages; Malthusian model. JEL Classification: J3, J4, J5, J6, J7, J8, N33
    Date: 2016
  5. By: Zhenhua Pei; Baokui Wang; Jinming Du
    Abstract: Income redistribution is the transfer of income from some individuals to others directly or indirectly by means of social mechanisms, such as taxation, public services and so on. Employing a spatial public goods game, we study the influence of income redistribution on the evolution of cooperation. Two kinds of evolutionary models are constructed, which describe local and global redistribution of income respectively. In the local model, players have to pay part of their income after each PGG and the accumulated income is redistributed to the members. While in the global model, all the players pay part of their income after engaging in all the local PGGs, which are centered on himself and his nearest neighbours, and the accumulated income is redistributed to the whole population. We show that the cooperation prospers significantly with increasing income expenditure proportion in the local redistribution of income, while in the global model the situation is opposite. Furthermore, the cooperation drops dramatically from the maximum curvature point of income expenditure proportion. In particular, the intermediate critical points are closely related to the renormalized enhancement factors.
    Date: 2016–10
  6. By: Schlicht, Ekkehart
    Abstract: This is an electronic reprint of a review of the book "Cultures Merging: A Historical and Economic Critique of Culture" by Eric L. Jones, Princeton: Princeton University Press that appeared in the Journal of Institutional and Theoretical Economics 2007, vol. 163, issue 3, pages 526-529, URL \url{ 0}.
    Keywords: Long-term economic growth; growth culture; culture and economics; cultural fixity; cultural nullity; cultural reciprocity; industrialization; protestantism; Konfucianism; A13; N10; N13; N15
    Date: 2016
  7. By: Gagnon, Nickolas (General Economics 1 (Micro)); Noussair, C.
    Abstract: We report the results from three distinct experiments, conducted in the Netherlands and in the United States, which extend the Gift-Exchange paradigm (Fehr et al., 1993; Fehr et al., 1997) for the study of worker-employer relationships. We focus on the effect of long time delays between the time at which workers learn their wage and when they choose their effort level, on the relationship between wage and effort. We compare effort choices made on the same day workers learn their wage, with those made several weeks afterward. While the average effort chosen is the same under the two time lags, a positive and significant relationship between wage and effort appears consistently only in the short-run, while in the long-run, the relationship is weaker and less consistent. We also find that only workers who receive a wage equal to or below their self-reported fair wage exhibit significant reciprocal behavior, a pattern that we interpret as revealing negative rather than positive reciprocity in worker decisions. Using a new technology that tracks facial expressions called NoldusTM FaceReader, we find that the emotion of anger is associated with reciprocal responses in the short-run, but this association is weaker in the long-run.
    Keywords: Economics, labour economics
    Date: 2016
  8. By: Stephan Heblich (University of Bristol); Alex Trew (University of St Andrews); Yanos Zylberberg (University of Bristol)
    Abstract: Why are the East sides of former industrial cities like London or New York poorer and more deprived? We argue that this observation is the most visible consequence of the historically unequal distribution of air pollutants across neighborhoods. In this paper, we geolocate nearly 5,000 industrial chimneys in 70 English cities in 1880 and use an atmospheric dispersion model to recreate the spatial distribution of pollution. First, individual-level census data show that pollution induced neighborhood sorting during the course of the nineteenth century. Historical pollution patterns explain up to 15% of within-city deprivation in 1881. Second, these equilibria persist to this day even though the pollution that initially caused them has waned. A quantitative model shows the role of non-linearities and tipping-like dynamics in such persistence.
    Keywords: Neighborhood Sorting, Historical Pollution, Deprivation, Per- sistence, Environmental Disamenity.
    JEL: R23 Q53 N90
  9. By: Alexandra M. de Pleijt (Utrecht University); Jan Luiten van Zanden (Utrecht University)
    Abstract: We test various hypotheses about the causes of the Little Divergence, using new data and focusing on trends in GDP per capita and urbanization. We find evidence that confirms the hypothesis that human capital formation was the driver of growth, and that institutional changes (in particular the rise of active Parliaments) were closely related to economic growth. We also test for the role of religion (the spread of Protestantism): this has affected human capital formation, but does not in itself have an impact on growth.
    Keywords: Europe, Economic growth, Little Divergence, Human capital formation
    JEL: N13 N33 O40 O52
    Date: 2016–11

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