nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2018‒04‒16
two papers chosen by
Matthew Baker
City University of New York

  1. Climatic Roots of Loss Aversion By Oded Galor; Viacheslav Savitskiy
  2. Emergence of Cooperation in the thermodynamic limit By Shubhayan Sarkar; Colin Benjamin

  1. By: Oded Galor; Viacheslav Savitskiy
    Abstract: This research explores the origins of loss aversion and the variation in its prevalence across regions, nations and ethnic group. It advances the hypothesis and establishes empirically that the evolution of loss aversion in the course of human history can be traced to the adaptation of individuals to the asymmetric effects of climatic shocks on reproductive success during the Malthusian epoch. Exploiting variations in the degree of loss aversion among second generation migrants in Europe and the US, as well as across precolonial ethnic groups, the research establishes that consistent with the predictions of the theory, individuals and ethnic groups that are originated in regions in which climatic conditions tended to be spatially correlated, and thus shocks were aggregate in nature, are characterized by greater intensity of loss aversion, while descendants of regions marked by climatic volatility have greater propensity towards loss-neutrality.
    Keywords: loss aversion, cultural evolution, evolution of preferences, natural selection, Malthusian epoch, growth, development
    JEL: D81 D91 Z10 O10 O40
    Date: 2017
  2. By: Shubhayan Sarkar; Colin Benjamin
    Abstract: Predicting how cooperative behavior arises in the thermodynamic limit is one of the outstanding problems in evolutionary game theory. For two player games, cooperation is seldom the Nash equilibrium. However, in the thermodynamic limit cooperation is the natural recourse regardless of whether we are dealing with humans or animals. In this work, we use the analogy with the Ising model to predict how cooperation arises in the thermodynamic limit.
    Date: 2018–03

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