nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2020‒11‒30
eight papers chosen by
Matthew Baker
City University of New York

  1. Learning Language: An Experiment By Daniel Houser; Yang Yang
  2. Double blind vs. open review: an evolutionary game logit-simulating the behavior of authors and reviewers By Mantas Radzvilas; Francesco De Pretis; William Peden; Daniele Tortoli; Barbara Osimani
  3. The Persistence of Miscalibration By Michael Boutros; Itzhak Ben-David; John R. Graham; Campbell R. Harvey; John W. Payne
  4. The Effect of Colonial and Pre-Colonial Institutions on Contemporary Education in Africa By Leone Walters; Carolyn Chisadza; Matthew W. Clance
  5. Do people choose what makes them happy and how do they decide at all? A theoretical inquiry By Scheuer, Niklas
  6. Valuing depression using the well-being valuation approach By Andrén, Daniela
  7. What Determines the Enforcement of Newly Introduced Social Norms: Personality Traits or Economic Preferences? Evidence from the COVID-19 Crisis By Daniel Schunk; Valentin Wagner
  8. Winners and Losers from the Protestant Reformation: An Analysis of the Network of European Universities By David de la Croix; Pauline Morault

  1. By: Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Yang Yang (Lingnan College, Sun Yat-sen University)
    Abstract: We develop a method for random assignment of language to participants in a controlled laboratory experiment, and use this to test the hypothesis that languages are learned more quickly when they can be identified with fewer number of observations. While the theory based on this hypothesis has generated substantial attention since being advanced by Blume (2005), evidence on its empirical validity has been elusive. Here we develop a novel extension of coordination games within which languages emerge endogenously. We show, first, that one can control features of an emergent language by varying the game’s incentives. This enables us to compare speed of learning across participants randomly assigned to different languages. Our data provide cogent evidence supporting the above hypothesis and Blume’s (2005) theory: Languages with compositional structures can be identified with fewer observations and are learned more quickly, and in this sense are efficient. Despite this, we find inefficient languages to sometimes emerge when they can be expressed using simple rules.
    Keywords: testing the efficiency theory of language, random assignment of language, laboratory experiment
    JEL: C91 D83
    Date: 2020–11
  2. By: Mantas Radzvilas; Francesco De Pretis; William Peden; Daniele Tortoli; Barbara Osimani
    Abstract: Despite the tremendous successes of science in providing knowledge and technologies, the Replication Crisis has highlighted that scientific institutions have much room for improvement. Peer-review is one target of criticism and suggested reforms. However, despite numerous controversies peer review systems, plus the obvious complexity of the incentives affecting the decisions of authors and reviewers, there is very little systematic and strategic analysis of peer-review systems. In this paper, we begin to address this feature of the peer-review literature by applying the tools of game theory. We use simulations to develop an evolutionary model based around a game played by authors and reviewers, before exploring some of its tendencies. In particular, we examine the relative impact of double-blind peer-review and open review on incentivising reviewer effort under a variety of parameters. We also compare (a) the impact of one review system versus another with (b) other alterations, such as higher costs of reviewing. We find that is no reliable difference between peer-review systems in our model. Furthermore, under some conditions, higher payoffs for good reviewing can lead to less (rather than more) author effort under open review. Finally, compared to the other parameters that we vary, it is the exogenous utility of author effort that makes an important and reliable difference in our model, which raises the possibility that peer-review might not be an important target for institutional reforms.
    Date: 2020–11
  3. By: Michael Boutros; Itzhak Ben-David; John R. Graham; Campbell R. Harvey; John W. Payne
    Abstract: Using 14,800 forecasts of one-year S&P 500 returns made by Chief Financial Officers over a 12-year period, we track the individual executives who provide multiple forecasts to study how their beliefs evolve dynamically. While CFOs’ return forecasts are systematically unbiased, their confidence intervals are far too narrow, implying significant miscalibration. We find that when return realizations fall outside of ex-ante confidence intervals, CFOs’ subsequent confidence intervals widen considerably. These results are consistent with a model of Bayesian learning which suggests that the evolution of beliefs should be impacted by return realizations. However, the magnitude of the updating is dampened by the strong conviction in beliefs inherent in the initial miscalibration and, as a result, miscalibration persists.
    JEL: D03 D83 D84 E03 G30
    Date: 2020–10
  4. By: Leone Walters (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Carolyn Chisadza (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Matthew W. Clance (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa)
    Abstract: This paper argues that contrary to previous findings, present-day education outcomes in Africa cannot be independently attributed to colonial or pre-colonial ethnic institutions. We propose that it is instead the complementarity or contention between colonial and precolonial institutions that result in education outcomes we observe today. Using geolocated DHS literacy outcomes for Cameroon, Cote d'Ivoire, Ghana, and Nigeria, our findings suggest that the positive effect of British rule on contemporary literacy is diminished in centralised ethnic regions. This paper contributes to debates on colonial and pre-colonial ethnic influences on African development, moving beyond country-level analysis.
    Keywords: Africa, Ethnic Institutions, Education
    JEL: I25 N17 Z13
    Date: 2020–11
  5. By: Scheuer, Niklas
    Abstract: We develop a theoretical model that jointly explains optimal choices and happiness. We work with constant elasticity of substitution functions for utility and happiness. Employing a choice framework, individuals are confronted with two options. When there exists a trade-off, we determine parametric conditions for which individual happiness and utility coincide as well as oppose each other. Comparing the empirical evidence of Benjamin et al. (2012), our model can explain three out of four possible happiness-utility combinations. Regarding how individuals actually decide, our findings suggest that this is partly random. This explanation accounts for the remaining 11.2 % of individuals.
    Keywords: Consumer Economics,Theory,General Welfare,Well-Being,Micro-Based Behavioral Economics
    JEL: D11 D91 I31
    Date: 2020
  6. By: Andrén, Daniela (Örebro University School of Business)
    Abstract: The continuously dramatic increase of the number of people suffering from depression attracts an increasing demand for effective ways of preventing depression. Without the need for new interventions, there is also a continuous call for a more robust framework for economic evaluation of public interventions. Taking in account people’s preferences for public goods is not straightforward to quantify, and therefore, without the importance of designing new technique for valuing nonmarket goods and services, it is equally important to use methods that are not yet established as traditional. One less used method to assess the cost of depression in monetary terms is the well-being valuation method or the life satisfaction approach, which requires answers to questions that are significantly less time demanding for the respondents than more traditional approaches to valuation. We added a well-being question to a contingent valuation web-survey that describes hypothetical interventions aimed to prevent depression and estimated that the loss in life satisfaction for individuals who directly and/or indirectly experienced depression varies between approximately 5000 and 17000 Euro per year.
    Keywords: depression; subjective well-being; well-being valuation method (WVM); life satisfaction approach (LSA)
    JEL: A12 D60 I31
    Date: 2020–11–11
  7. By: Daniel Schunk (Johannes Gutenberg University); Valentin Wagner (Johannes Gutenberg University)
    Abstract: Social norms govern human behavior and usually change slowly over time. While individuals’ willingness to sanction others is decisive for the enforcement of social norms and thus social stability, little is known about individual sanctioning behavior related to newly introduced social norms. During the COVID-19 pandemic, governments have used various tools to rapidly and actively introduce the new norm of wearing a face mask; this offers a unique setting to study the determinants of individuals’ willingness to enforce a cooperation norm. In a nationwide online survey in Germany, we find that higher levels of conscientiousness and neuroticism, but none of the economic preferences (time and risk), are significantly and robustly associated with higher norm enforcement behavior. Furthermore, there is a strong relationship behavior between supervisors’ and their subordinates’ norm enforcement, and we observe that females sanction less harshly than men. Our results shed light on the origins of individual compliance with and enforcement of newly introduced public policy measures that are meant to increase solidarity via the explicit shaping of new cooperation norms.
    Keywords: Social norm enforcement, personality traits, risk and time preferences, COVID-19
    JEL: D81 D90 H12 H40
    Date: 2020–11–16
  8. By: David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Pauline Morault (CY Cergy Paris Université, France)
    Abstract: Using a new database of European academics, we provide a global view of the effect of the Protestant Reformation on the network of universities and on their individual importance within the network. A connection (edge) between two universities (nodes) is defined by the presence of the same scholar in both universities. We first show that the emergence of Protestantism is strongly associated with rising fragmentation. Dyadic regressions confirm that geography is important as well, but does not substitute for the effect of religion. Considering eigenvector centrality as a measure of the importance of nodes in the network, we find that becoming Protestant or being a newly founded Protestant university is associated with higher centrality. Finally, the number of publications from universities is strongly correlated with centrality, lending credence to the view that the loss of connectedness of the Southern European universities after the (Counter-)Reformation was key in triggering their scientific demise.
    Keywords: Upper-Tail Human Capital, Universities, Network, Centrality, Publications, Fragmentation
    JEL: N33 O15 I25
    Date: 2020–10–22

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