nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2018‒12‒03
five papers chosen by
Matthew Baker
City University of New York

  1. Behavioral Characterizations of Naiveté for Time-Inconsistent Preferences By David S. Ahn; Ryota Iijima; Yves Le Yaouanq; Todd Sarver
  2. Ninety years of publications in Economic History: evidence from the top five field journals (1927-2017) By Martina Cioni; Govanni Federico; Michelangelo Vasta
  3. If I Don’t Trust Your Preferences, I Won’t Follow Mine: Preference Stability, Beliefs, and Strategic Choice By Irenaeus Wolff
  4. Comfort and Conformity: A Culture-based Theory of Migration By Ruxanda Berlinschi; Jan Fidrmuc
  5. Community cohesion and assimilation equilibria By Stark, Oded; Jakubek, Marcin; Szczygielski, Krzysztof

  1. By: David S. Ahn (University of California, Berkeley); Ryota Iijima (Cowles Foundation, Yale University); Yves Le Yaouanq (Ludwig-Maximilians-Universitat); Todd Sarver (Duke University)
    Abstract: We propose nonparametric de?nitions of absolute and comparative naivete. These de?nitions leverage ex-ante choice of menu to identify predictions of future behavior and ex-post (random) choices from menus to identify actual behavior. The main advantage of our de?nitions is their independence from any assumed functional form for the utility function representing behavior. An individual is sophisticated if she is indi?erent ex-ante between retaining the option to choose from a menu ex-post or committing to her actual distribution of choices from that menu. She is naive if she prefers the flexibility in the menu, reflecting a mistaken belief that she will act more virtuously than she actually will. We propose two de?nitions of comparative naivete and explore the restrictions implied by our de?nitions for several prominent models of time inconsistency.
    Keywords: Naive, Sophisticated, Time inconsistent, Comparative statics
    JEL: D90
    Date: 2017–02
  2. By: Martina Cioni; Govanni Federico; Michelangelo Vasta
    Abstract: The growing appeal of the long run perspective among economists and the fiftieth anniversary of the of the publication of the Conrad and Meyer article (1958), which signed the Cliometric Revolution, have attracted a lot of interest on the origin and the development of Economic history. This paper explores the evolution of the field with a new articulated database of all the 6,516 articles published in five journals (Economic History Review, Journal of Economic History, Explorations in Economic History, European Review of Economic History and Cliometrica) from their establishment to 2017. We show that these journals are the most important in the field, with a wide influence also outside it. Our main results are that the Cliometric Revolution took quite a long time to fully display its effects, which became evident only in the 1990s, when personal computer and software packages became available. Finally, as for the last two decades, we find that the process of integration of economic history into economics is, so far, slower than previously suggested and limited to US. On the other hand, the most striking and neglected change is the overall success of Continental European scholars within the field. Are these changes the harbinger of a new divergence between the two shores of the Atlantic with the rise of a new paradigm based on the “Historical economics” approach? It is too early to tell.
    JEL: N01
    Date: 2018–11
  3. By: Irenaeus Wolff
    Abstract: In contrast to standard theory, experimental participants often do not best-respond to their stated beliefs. Potential reasons are inaccurate belief reports or unstable preferences. Focusing on games in which participants can observe the revealed preferences of their opponents, this paper points out an additional reason for the lack of belief-action consistency. Whether a participant’s best-response—or a Nash-equilibrium—predicts her behaviour depends heavily on the participant believing in others’ preference stability. Believing in others’ preference stability fosters predictability because it is associated with a lower variance in the participant’s belief about her opponents’ actions, and low-variance beliefs entail more best-responding.
    Keywords: Preference stability, best-response, Nash-equilibrium, rational beliefs, public good, social dilemma, conditional cooperation, social preferences.
    Date: 2018
  4. By: Ruxanda Berlinschi; Jan Fidrmuc
    Abstract: This paper proposes a theory of migration decisions in which cultural traits play a role. Individuals are assumed to value comfort (high wages) and conformity (interactions with individuals who share similar world views). Regions are assumed to differ economically (average wages) and culturally (average world views and their diversity). The model shows that self-selection of inter-regional migrants on world views is non-monotonic if one region is more diverse than the other, and it weakens with economic gaps between regions. This non-monotonicity can lead to a dichotomy of outcomes: culturally diverse regions become even more diverse because of migration, while culturally homogeneous regions become even more homogeneous. Consequently, Tieboutian sorting (people moving to the region in which world views are closer to theirs) only holds when regions have similar wages and diversity of world views.
    Keywords: migration, self-selection, culture, diversity, Tiebout model
    JEL: A13 F22 J61 Z10
    Date: 2018
  5. By: Stark, Oded; Jakubek, Marcin; Szczygielski, Krzysztof
    Abstract: We study the assimilation behavior of a group of migrants who live in a city populated by native inhabitants. We conceptualize the group as a community, and the city as a social space. Assimilation increases the productivity of migrants and, consequently, their earnings. However, assimilation also brings the migrants closer in social space to the richer native inhabitants. This proximity subjects the migrants to relative deprivation. We consider a community of migrants whose members are at an equilibrium level of assimilation that was chosen as a result of the maximization of a utility function that has as its arguments income, the cost of assimilation effort, and a measure of relative deprivation. We ask how vulnerable this assimilation equilibrium is to the appearance of a “mutant” - a member of the community who is exogenously endowed with a superior capacity to assimilate. If the mutant were to act on his enhanced ability, his earnings would be higher than those of his fellow migrants, which will expose them to greater relative deprivation. We find that the stability of the pre-mutation assimilation equilibrium depends on the cohesion of the migrants’ community, expressed as an ability to effectively sanction and discourage the mutant from deviating. The equilibrium level of assimilation of a tightly knit community is stable in the sense of not being vulnerable to the appearance of a member becoming better able to assimilate. However, if the community is loose-knit, the appearance of a mutant will destabilize the pre-mutation assimilation equilibrium, and will result in a higher equilibrium level of assimilation.
    Keywords: Community/Rural/Urban Development, Financial Economics, Labor and Human Capital
    Date: 2018–11–19

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