nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2017‒06‒11
six papers chosen by
Matthew Baker
City University of New York

  1. Spillover Effects of Institutions on Cooperative Behavior, Preferences and Beliefs By Engl, Florian; Riedl, Arno; Weber, Roberto A.
  2. Stability and welfare effects of profit taxes within an evolutionary market interaction model By Schmitt, Noemi; Tuinstra, Jan; Westerhoff, Frank
  3. Guiding the Economy Toward the Target Inflation Rate: An Evolutionary Game Theory Approach By Yasushi Asako; Tatsushi Okuda
  4. Organized Crime and Technology By Mustafa Caglayan; Alessandro Flamini; Babak Jahanshahi
  5. The effect of culture on fiscal redistribution: Evidence based on genetic, epidemiological and linguistic data By Kammas, Pantelis; Kazakis, Pantelis; Sarantides, Vassilis
  6. The Role of Knowledge in the Evolution of the Religious Phenomenon By Lucian Ionel Mercea

  1. By: Engl, Florian (University of Cologne); Riedl, Arno (Maastricht University); Weber, Roberto A. (University of Zurich)
    Abstract: Institutions are an important means for fostering prosocial behaviors, but in many contexts their scope is limited and they govern only a subset of all socially desirable acts. We use a laboratory experiment to study how the presence and nature of an institution that enforces prosocial behavior in one domain affects behavior in another domain and whether it also alters prosocial preferences and beliefs about others' behavior. Groups play two identical public good games. We vary whether, for only one game, there is an institution enforcing cooperation and vary also whether the institution is imposed exogenously or arises endogenously through voting. Our results show that the presence of an institution in one game generally enhances cooperation in the other game thus documenting a positive spillover effect. These spillover effects are economically substantial amounting up to 30 to 40 percent of the direct effect of institutions. When the institution is determined endogenously spillover effects get stronger over time, whereas they do not show a trend when it is imposed exogenously. Additional treatments indicate that the main driver of this result is not the endogeneity but the temporal trend of the implemented institution. We also find that institutions of either type enhance prosocial preferences and beliefs about others' prosocial behavior, even toward strangers, suggesting that both factors are drivers of the observed spillover effects.
    Keywords: public goods, institutions, spillover effect, social preferences, beliefs
    JEL: C92 D02 D72 H41
    Date: 2017–05
  2. By: Schmitt, Noemi; Tuinstra, Jan; Westerhoff, Frank
    Abstract: We develop a partial equilibrium model in which firms can locate in two separate regions. A firm's decision where to locate in a given period depends on the regions' relative profitability. If firms react strongly to the regions' relative profitability, their market switching behavior generates unstable dynamics. If the goal of policy makers is to stabilize these dynamics they can do so by introducing profit taxes that reduce the regions' relative profitability. While stability can already be obtained by imposing profit taxes in one of the two regions, total welfare is maximized if policy makers coordinate their tax setting behavior across regions. However, policy makers only interested in welfare in their own region may have the incentive to decrease their profit tax below this level, thereby attracting more firms and increasing tax revenues, at the cost of instability in both regions.
    Keywords: market interactions,evolutionary dynamics,profit taxes,policy coordination,welfare effects,stability analysis
    JEL: D83 E30 H20
    Date: 2017
  3. By: Yasushi Asako (Associate Professor, Faculty of Political Science and Economics, Waseda University (E-mail:; Tatsushi Okuda (Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail:
    Abstract: Under what condition is the target inflation rate attainable even after the monetary policy rate hits its lower bound? This study examines the question using a dynamic model based on evolutionary game theory. In the model, entrepreneurs and workers iteratively play a stage game to make investment decisions. In the presence of complementarity between entrepreneurs f and workers f investments, two long-run equilibria exist: all players invest or no player invests. The study shows two conditions for successfully guiding the economy toward the long-run equilibrium that all players invest at the target inflation rate. First, the type of entrepreneurs f investments needs to be demand- creating innovation rather than cost-reducing innovation. Second, the proportions of entrepreneurs and workers currently investing must be sufficiently large.
    Keywords: Target inflation rate, Evolutionary game, Best-response dynamics, Perfect-foresight dynamics, Multiple long-run equilibria, Capital-skill complementarity, Demand-creating innovation
    JEL: C72 C73 E31 E52
    Date: 2017–05
  4. By: Mustafa Caglayan (Heriot-Watt University); Alessandro Flamini (Department of Economics and Management, University of Pavia); Babak Jahanshahi (Department of Economics and Management, University of Pavia)
    Abstract: This paper investigates the relation between the presence of organized crime and the technology level in north Italy. Our analysis proposes two provincial indexes. The first portrays technology at a fine-grained industrial sector level. The second describes mafia-type organizations in line with the investigation approach currently used by Italian National Antimafia Directorate (DNA) and Antimafia District Directorates (DDAs). With these indexes, we provide empirical evidence that in north Italy, the larger the presence of organized crime, the less innovation and the technological level of the industrial fabric. Our reading of this finding is that without organized crime, Nature selects agents according to their capacity to innovate. Instead, with organized crime, agents can choose an alternative strategy: relate with organized crime, which hinders innovation. Modelling the interaction innovation - relation with mafias by evolutionary game theory, we show that the presence of organized crime, through natural selection, leads to low levels of technology. Our model also shows how to use sanctions and indemnities to address the problem.
    Keywords: organized crime, evolutionary game theory, innovation, silent mafia, technology, technology index, mafia index, north Italy.
    JEL: O17 O30 C73 R11 K14 K42
    Date: 2017–05
  5. By: Kammas, Pantelis; Kazakis, Pantelis; Sarantides, Vassilis
    Abstract: Using a set of innovative instruments we investigate the effect of collectivist culture on fiscal redistribution. Our analysis suggests that societies characterized by less collectivistic culture present higher levels of fiscal redistribution, as proxied by government subsidies and transfers as well as health and education expenses.
    Keywords: Culture, Redistribution, Public goods
    JEL: H40 H41 Z10 Z13
    Date: 2017–05–25
  6. By: Lucian Ionel Mercea (PhD candidate at the West University of Timisoara)
    Abstract: In the development of the religious phenomenon, knowledge bears an essential role. The present study analyses the factors that have contributed to the emergence and the spreading of NeoProtestant denominations (Baptist, Adventists, Brethren and Pentecostals) within the borders of Romania in the second half of the 19th and the beginning of the 20th century. Four different perspectives are presented: the orthodox, communist, neo Protestant and sociological points of view. With this paper we will observe the way knowledge played an important role in the appearance and development of neo‚ÄíProtestant confessions in Romania. That mainstream churches in Romanian (Orthodox, Catholic), preoccupied more with the ritualistic aspects of their liturgical services, did not fulfill the needs of believers in search for a deeper spiritual experience. For this to occur, believers belonging to these ecclesiastical traditions have turned towards what has been labeled neo Protestantism in Romania.
    Keywords: knowledge, neoProtestant, Baptist, Adventists, Brethren, Pentecostals, orthodox
    Date: 2016

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