nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2020‒03‒16
four papers chosen by
Matthew Baker
City University of New York

  1. Intelligence, Errors and Strategic Choices in the Repeated Prisoners' Dilemma By Proto, Eugenio; Rustichini, Aldo; Sofianos, Andis
  2. The Cultural Origin of Saving Behavior By Costa-Font, Joan; Giuliano, Paola; Ozcan, Berkay
  3. A simple Ricardo-Malthusian model of population, deforestation and biodiversity loss By Late Lawson; Lawson Late
  4. In the name of the father: inheritance systems and the dynamics of state capacity By Èric Roca Fernández

  1. By: Proto, Eugenio (University of Glasgow); Rustichini, Aldo (University of Minnesota); Sofianos, Andis (Heidelberg University)
    Abstract: A large literature in behavioral economics has emphasized in the last decades the role of individual differences in social preferences (such as trust and altruism) and in influencing behavior in strategic environments. Here we emphasize the role of attention and working memory, and show that social interactions among heterogeneous groups are likely to be mediated by differences in cognitive skills. Our design uses a Repeated Prisoner's Dilemma, and we compare rates of cooperation in groups of subjects grouped according to their IQ, with those in combined groups. While in combined groups we observe higher cooperation rates and profits than in separated groups (with consistent gains among lower IQ subjects and relatively smaller losses for higher IQ subjects), higher IQ subjects become less lenient when they are matched with lower IQ subjects than when they play separately. We argue that this is an instance of a general phenomenon, which we demonstrate in an evolutionary game theory model, where higher IQ among subjects determines – through better working memory – a lower frequency of errors in strategy implementation. In our data, we show that players indeed choose less lenient strategies in environments where subjects have higher error rates. The estimations of errors and strategies from the experimental data are consistent with the hypothesis and the predictions of the model.
    Keywords: IQ, intelligence, cooperation, repeated Prisoner's Dilemma, strategy, error in transition
    JEL: C73 C91 C92
    Date: 2020–01
  2. By: Costa-Font, Joan (London School of Economics); Giuliano, Paola (University of California, Los Angeles); Ozcan, Berkay (London School of Economics)
    Abstract: Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. A seminal paper in economics (1) however did not find any effect of culture on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behavior, and their relevance persists up to three generations.
    Keywords: saving, culture
    JEL: Z1 D0
    Date: 2020–02
  3. By: Late Lawson (BETA, CNRS, INRAE & University of Strasbourg); Lawson Late
    Abstract: This paper assesses the interactions between human societies and nature, arguing that population growth and forest resources harvest cause natural habitat conversion, which resolves into biodiversity loss. Relying on profit and utility maximization behaviours, we describe the joint evolution of population, forest and species stock by a dynamic system characterized by a locally stable steady state. Compared to existing studies, we enlighten the possibility of total extinction of biological species (empty forests). Furthermore, our analysis supports an impossible peaceful cohabitation, as in presence of human population growth, forest resources and species stock diverge from their carrying capacity. Finally, scenarios analyses associated with high fertility and preference for the resource-based good globally indicate rapid population growth followed by a sudden drop.
    Keywords: Economic growth, Population, Forest clearing, Habitat destruction, Species loss
    JEL: Q32 Q57 R11
  4. By: Èric Roca Fernández (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper examines how the degree of gender-egalitarianism embedded in inheritance rules impacts state capacity at its early stages during medieval times. We present a theoretical model in which building state capacity enables nobles to raise taxes and overcome rivals. The model addresses the use of inheritance to consolidate landholding dynasties, also accommodating interstate marriages between landed heirs. On the one hand, dynastic continuity—of utmost importance to medieval lords—directly encourages state-building. Male-biased inheritance rules historically maximize the likelihood of dynastic continuity. We weigh this effect against the indirect impact of the more frequent land-merging marriages under gender-egalitarian rules. Contrary to the literature, our results suggest that gender-egalitarian norms—offering a low probability of dynastic continuity—promote state capacity in the short run more than gender-biased norms. In the long run, results are reversed, providing a rationale for the pervasive European tradition of preference for men as heirs.
    Keywords: state capacity,inheritance,primogeniture,marriage,gender equality
    Date: 2020

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