nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2018‒11‒12
four papers chosen by
Matthew Baker
City University of New York

  1. Stress and Coping: An Economic Approach By Wälde, Klaus; Scheuer, Niklas
  2. Somatic Distance; Trust and Trade By Jacques Melitz; Farid Toubal
  3. Beyond behavioral economics: who is the economic man By Obregón, Carlos
  4. The Reversal of Fortune, Extractive Institution and the Historical Roots of Racism By Bonick, Matthew; Farfan-Vallespin, Antonio

  1. By: Wälde, Klaus; Scheuer, Niklas
    Abstract: We present a psychological model of stress. Appraisal translates stressors into subjective stress. Stress reduces instantaneous utility of an individual directly and via cognitive load. Coping can be under the control of the individual or more automatic. We predict the occurrence of uncontrolled coping .emotional outbursts .as a function of an individual´s theory-consistent personality and environment. We explain when stressors reduce income. We also explain under which conditions rising income does not go hand in hand with rising stress. First steps towards a theory of therapy show how stressed individuals can improve their well-being beyond standard coping measures.
    Keywords: Stress,coping,personality,controlled vs. automatic reaction,emotional outbursts,income
    JEL: D03 D91 I12
    Date: 2018
  2. By: Jacques Melitz (CREST; ENSAE; CEPII); Farid Toubal (CREST; ENS de Paris-Saclay; CEPII)
    Abstract: Somatic distance; or differences in physical appearance; proves to be extremely important in the gravity model of bilateral trade in conformity with results in other areas of economics and outside in the social sciences. This is also true independently of survey evidence about bilateral trust. These findings are obtained in a sample of the 15 members of the European Economic Association in 1996. Robustness tests also show that somatic distance; as well as co-ancestry; has a more reliable influence on bilateral trade than the other cultural variables. The article finally discusses the interpretation and breadth of application of these results.
    Keywords: Somatic distance, Cultural interactions, Co-ancestry, Trust, Language, Bilateral Trade.
    JEL: F10 F40 Z10
    Date: 2018–08–01
  3. By: Obregón, Carlos
    Abstract: There are two reasons to go beyond Behavioral Economics. The first reason is that humans, as presented by this school, do not explain many critical economic problems. Behavioral Economics is not an alternative paradigm to traditional economics. It is only one of the New Schools of thought, that has risen due to the failure of the contemporary Neoclassical School to show that markets have a unique maximum welfare full employment equilibrium. Therefore, in order to delimit Behavioral Economics ́ contributions we need to look at the whole paradigm in economics, which today includes: the contemporary neoclassical paradigm plus all the New Schools of thought. The second reason is that humans, as described by Behavioral Economics, are not a good representation of mans ́ evolutionary characteristics. For Behavioral Economics, humans are emotional beings which often do not know what is best for them, and need the help of the government to make the choices which are truly convenient; and they display altruistic and social cooperative behavior, even in monetary transactions. But evolutionarily we are neither design to be emotional or rational, nor to be selfish or altruistic and socially cooperative. We are design to be flexible for survival purposes, and to display a wide range of behaviors.
    Keywords: Behavioral Economics
    JEL: A1 A12 A13 B0 D0 D00 D1 D10 D11 G1 G10
    Date: 2018–10–22
  4. By: Bonick, Matthew; Farfan-Vallespin, Antonio
    Abstract: We show differences in levels of racism within a sample of former European colonies can be traced to historical institutions. Our identification strategy relies on the reversal of fortune, a historical shock capturing the exogenous establishment of different institutions during the onset of European colonization. Using both OLS and multilevel analysis, we find, extractive historical institutions to be a strong predictor of higher levels of racism independent of present and other explanatory factors at the individual and country levels. We argue and provide evidence this relationship is causal and operates through internal norms, beliefs and values.
    JEL: J15 N30 N40 Z10
    Date: 2018

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