nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2017‒03‒12
six papers chosen by
Matthew Baker
City University of New York

  1. Evolutionary Stability in Fiscal Competition By Wagener, Andreas
  2. Why are cognitive abilities of children so different across countries? The link between major socioeconomic factors and PISA test scores By Burhan, Nik Ahmad Sufian; Md. Yunus, Melor; Tovar, María Elena Labastida; Burhan, Nik Mohd Ghazi
  3. What drives markups? Evolutionary pricing in an agent-based stock-flow consistent macroeconomic model By Pascal Seppecher; Isabelle Salle; Marc Lavoie
  4. Challenges in Research on Preferences and Personality Traits: Measurement, Stability, and Inference By Golsteyn, Bart H.H.; Schildberg-Hörisch, Hannah
  5. Religious Pluralism and the Transmission of Religious Values through Education By Cohen-Zada, Danny; Elder, Todd E.
  6. The roles of nature and history in world development By Vernon Henderson; Tim Squires; Adam Storeygard; David Weil

  1. By: Wagener, Andreas
    Abstract: In fiscal interaction, a policy is evolutionarily stable if, once adopted by all governments, jurisdictions that deviate from it fare worse than those that stick to it. Evolutionary stability is the appropriate solution concept for models of imitative learning (policy mimicking). We show that evolutionarily stable strategies implement identical allocations, regardless of whether jurisdictions use tax rates or expenditure levels as their strategy variable. This is in contrast to the observation that the allocations in the Nash equilibria of games played in tax rates or expenditure levels differ from one another. With evolutionary play, jurisdictions set taxes and expenditures competitively, i.e., they behave as if they were all negligibly small.
    JEL: H77 C73 H72
    Date: 2016
  2. By: Burhan, Nik Ahmad Sufian; Md. Yunus, Melor; Tovar, María Elena Labastida; Burhan, Nik Mohd Ghazi
    Abstract: Path analysis was employed to examine the effects of socioeconomic factors on children’s level of cognitive ability (measured by PISA scores) at a cross-country level (N=55). The results showed that children’s level of schooling had a positive direct effect on their cognitive ability, while the direct effects of adult fertility rate and child mortality were significantly negative. As we found that child mortality had the largest total effect on cognitive ability, the results also confirmed that per capita income had indirectly channeled its positive effect on cognitive ability through the reduction in child mortality. Moreover, in the long term, parents’ education level had the largest positive indirect effect on cognitive ability because it significantly increased children’s schooling rate and reduced the fertility rate. We suggest that, in the countries considered herein, well-educated parents have higher awareness of quality of life that indirectly raises the cognitive ability of their children.
    Keywords: cognitive ability; cross-country analysis; education; parents; PISA scores; socioeconomic
    JEL: I25 J13 O20
    Date: 2016–09–29
  3. By: Pascal Seppecher (Centre d'Economie de l'Université de Paris Nord (CEPN)); Isabelle Salle (Utrecht University, School of Economics); Marc Lavoie (Centre d'Economie de l'Université de Paris Nord (CEPN))
    Abstract: This paper studies coordination between firms in a multi-sectoral macroeconomic model with endogenous business cycles. Firms are both in competition and interdependent, and set their prices with a markup over unit costs. Markups are heterogeneous and evolve under market pressure. We observe a systematic coordination within firms in each sector, and between each sector. The resulting pattern of relative prices are consistent with the labor theory of value. Those emerging features are robust to technology shocks.
    Keywords: General interdependence, Pricing, Agent-based modeling, Learning
    Date: 2017–01
  4. By: Golsteyn, Bart H.H. (Maastricht University); Schildberg-Hörisch, Hannah (University of Duesseldorf)
    Abstract: This paper reviews several traditions in economic research on preferences as well as research on personality traits in personality psychology and lists challenges in both fields. We discuss challenges regarding the measurement of preferences and personality traits, challenges regarding the stability of preferences and traits, and challenges when inferring causality. Additionally, we highlight areas in which we see potential benefits from taking into account methodological approaches or insights from the respective other discipline.
    Keywords: preferences, personality traits, measurement, stability, causality
    JEL: A12 D03
    Date: 2017–02
  5. By: Cohen-Zada, Danny (Ben Gurion University); Elder, Todd E. (Michigan State University)
    Abstract: We analyze the role of formal religious education in the intergenerational transmission of religious values. We first develop a model of school choice in which the demand for religious schooling is driven partly by the desire of parents to limit their children's exposure to the influences of competing religions. The model predicts that when a religious group's share of the local population grows, the fraction of that group's members whose children attend religious schools declines. In addition, it shows that if the motivation to preserve religious identity is sufficiently strong, the fraction of all children that attend a given denomination's school is an inverse u-shaped function of the denomination's market share. Finally, the model implies that the overall demand for religious schooling is an increasing function of both the local religiosity rate and the level of religious pluralism, as measured by a Herfindahl Index. Using both U.S. county-level data and individual data from ECLS-K and NELS:88, we find evidence strongly consistent with all of the model's predictions. Our findings also illustrate that failing to control for the local religiosity rate, as is common in previous studies, may lead a researcher to erroneously conclude that religious pluralism has a negative effect on participation.
    Keywords: cultural transmission, school choice, religious pluralism, religious identity
    JEL: I21 Z12
    Date: 2017–02
  6. By: Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
    Abstract: Vernon Henderson and colleagues explore fundamental determinants of the location of economic activity.
    Keywords: agriculture, physical geography, development
    JEL: O13 O18 R12
    Date: 2017–03

This nep-evo issue is ©2017 by Matthew Baker. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.