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on Evolutionary Economics |
| By: | Dai Zusai (Department of Economics, Temple University) |
| Abstract: | This paper presents a universal and economically intuitive approach to linking static and dynamic stability. In economics, static stability is traditionally defined by negative relationship between endogenous and exogenous variables in a model: for a population game, this is characterized by negative semidefiniteness of the Jacobian matrix of the payoff function. We consider economically reasonable dynamics, in which we can justify agents' choices of new strategies as optimal choices possibly by introducing additional costs and constraints. This class of dynamics covers major payoff-based (non-imitative) evolutionary dynamics. The key is expected net gains (payoff improvements) from strategy revisions after paying switching costs. Static stability implies that the aggregate net gain diminishes over time under economic reasonable dynamics and thus can be used as a Lyapunov function. While our analysis here is confined to myopic evolutionary dynamics in population games, our approach is applicable to more complex situations. |
| Keywords: | evolutionary dynamics, dynamic stability, static stability, evolutionary stable state, Lyapunov function, contractive games |
| JEL: | C73 C62 C61 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1903&r=all |
| By: | Guillaume Blanc (Brown University) |
| Abstract: | This research identifies the origins of the early demographic transition in France, before the French Revolution and more than a century before the rest of Europe. We provide strong empirical evidence suggesting that secularization accounts for the bulk of the decline in fertility and document large, significant, and robust results across specifications, datasets, and estimation methods. We draw on a novel individual-level historical dataset crowdsourced from publicly available genealogies to establish a causal interpretation. This dataset allows to control for time-varying unobservables, to study the effect of secularization before and after demographic change, and to exploit the choice of migrants in the aftermath of the decline in religiosity. Finally, we discuss the roots of the rapid and early process of secularization and suggest that the strength of the Counter Reformation following the demise of Protestantism in France played an important part. Our findings demonstrate that cultural change and the transition to modernity and away from tradition can shape development. |
| Keywords: | fertility,modernization,development,secularization |
| Date: | 2019–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02318180&r=all |
| By: | Daniel Muller; Tshilidzi Marwala |
| Abstract: | The famous St Petersburg Paradox shows that the theory of expected value does not capture the real-world economics of decision-making problem. Over the years, many economic theories were developed to resolve the paradox and explain the subjective utility of the expected outcomes and risk aversion. In this paper, we use the concept of the net utility to resolve the St Petersburg paradox. The reason why the principle of absolute instead of net utility does not work is because it is a first order approximation of some unknown utility function. Because the net utility concept is able to explain both behavioral economics and the St Petersburg paradox it is deemed a universal approach to handling utility. Finally, this paper explored how artificial intelligent (AI) agent will make choices and observed that if AI agent uses the nominal utility approach it will see infinite reward while if it uses the net utility approach it will see the limited reward that human beings see. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1910.09544&r=all |
| By: | Chang, Kuo-Ping |
| Abstract: | Behavioral economics, notably developed by Daniel Kahneman, Amos Tversky and Richard Thaler, has found consistent and pervasive anomalies in common people’s daily behaviors. This paper has employed the concepts in traditional economics (e.g., choice, relative price, and opportunity cost) to analyze the anomalies found in behavioral economics. The results show that quite a few anomalies, such as preference reversal, isolation effect and sunk cost fallacy, do not exist. This is not to say that people always make rational choices. The findings of the paper conclude, however, that common people may not be as irrational as behavioral economists have suggested (in some situations, common people may act more like a rational economist). |
| Keywords: | Choice, sunk cost fallacy, relative price ratio (rate of return), prospect theory, endowment effect. |
| JEL: | D11 D9 |
| Date: | 2019–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96561&r=all |
| By: | Aïleen Lotz (Cerca Trova) |
| Abstract: | This paper extends the notion of the rational agent in economics by acknowledging the role of the unconscious in the agent's decision-making process. It argues that the unconscious can be modelled by a rational agent with his own objective function and set of information. The combination of both the conscious and unconscious agents is called the dual agent. This dual agent presents rationally biased behaviors that may persist through aggregation and could be potentially measured. It also provides a theoretical approach to the emotionally-driven actions. |
| Keywords: | dual agent,conscious and unconscious,rationality,multi-rationality,emotions,choices and preferences,multi-agent model,consistency |
| Date: | 2019–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02314663&r=all |