nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2021‒05‒03
six papers chosen by
Matthew Baker
City University of New York

  1. Weber Revisited: The Protestant Ethic and the Spirit of Nationalism By Kersting, Felix; Wohnsiedler, Iris; Wolf, Nikolaus
  2. Patience and Comparative Development By Uwe Sunde; Thomas Dohmen; Benjamin Enke; Armin Falk; David Huffman; Gerrit Meyerheim
  3. Accounting for the Great Divergence: Recent findings from historical national accounting By Stephen Broadberry
  4. On the Causes and Consequences of Deviations from Rational Behavior By Strittmatter, Anthony; Sunde, Uwe; Zegners, Dainis
  5. The Causal Effect of Cultural Identity on Cooperation By Jeffrey V. Butler; Dietmar Fehr
  6. Social Norms Offer Explanation for Inconsistent Effects of Incentives on Prosocial Behavior By Caroline Graf; Eva-Maria Merz; Bianca Suanet; Pamala Wiepking

  1. By: Kersting, Felix (HU Berlin); Wohnsiedler, Iris (HU Berlin); Wolf, Nikolaus (HU Berlin)
    Abstract: We revisit Max Weber's hypothesis on the role of Protestantism for economic development. We show that nationalism is crucial to both, the interpretation of Weber's Protestant Ethic and empirical tests thereof. For late 19th century Prussia we reject Weber’s suggestion that Protestantism mattered due to an “ascetic compulsion to save”. Moreover, we find that income levels, savings, and literacy rates differed between Germans and Poles, not between Protestants and Catholics using pooled OLS and IV regressions as well as IV mediation analysis. We suggest that this result is due to anti-Polish discrimination.
    Keywords: Max Weber; protestantism; nationalism;
    JEL: N13 N33 O16 Z12
    Date: 2019–11–13
  2. By: Uwe Sunde; Thomas Dohmen; Benjamin Enke; Armin Falk; David Huffman; Gerrit Meyerheim
    Abstract: This paper studies the relationship between patience and comparative development through a combination of reduced-form analyses and model estimations. Based on a globally representative dataset on time preference in 76 countries, we document two sets of stylized facts. First, patience is strongly correlated with per capita income and the accumulation of physical capital, human capital and productivity. These correlations hold across countries, subnational regions, and individuals. Second, the magnitude of the patience elasticity strongly increases in the level of aggregation. To provide an interpretive lens for these patterns, we analyze an OLG model in which savings and education decisions are endogenous to patience, aggregate production is characterized by capital-skill complementarities, and productivity implicitly depends on patience through a human capital externality. In our model estimations, general equilibrium effects alone account for a non-trivial share of the observed amplification effects, yet meaningful externalities are needed to quantitatively match the empirical evidence.
    Keywords: Time Preference, Comparative Development, Factor Accumulation
    JEL: D03 D90 O10 O30 O40
    Date: 2021–04
  3. By: Stephen Broadberry (Nuffield College Oxford, CAGE and CEPR)
    Abstract: As a result of recent work on historical national accounting, it is now possible to establish more firmly the timing of the Great Divergence of living standards between Europe and Asia in the eighteenth century. There was a European Little Divergence as Britain and the Netherlands overtook Italy and Spain, and an Asian Little Divergence as Japan overtook China and India. The Great Divergence occurred because Japan grew more slowly than Britain and the Netherlands starting from a lower level, and because of a strong negative growth trend in Qing dynasty China. A growth accounting framework is used to assess the contributions of labour, human and physical capital, land and total factor productivity. In addition to these proximate sources, the roles of institutions and geography are examined as the ultimate sources of the divergent growth patterns.
    Keywords: Great Divergence; living standards; measurement; explanation JEL Classification: N10, N30, N35, O10, O57
    Date: 2021
  4. By: Strittmatter, Anthony (University of St. Gallen); Sunde, Uwe (LMU Munich); Zegners, Dainis (Erasmus University Rotterdam)
    Abstract: This paper presents novel evidence for the prevalence of deviations from rational behavior in human decision making – and for the corresponding causes and consequences. The analysis is based on move-by-move data from chess tournaments and an identification strategy that compares behavior of professional chess players to a rational behavioral benchmark that is constructed using modern chess engines. The evidence documents the existence of several distinct dimensions in which human players deviate from a rational benchmark. In particular, the results show deviations related to loss aversion, time pressure, fatigue, and cognitive limitations. The results also demonstrate that deviations do not necessarily lead to worse performance. Consistent with an important influence of intuition and experience, faster decisions are associated with more frequent deviations from the rational benchmark, yet they are also associated with better performance.
    Keywords: Rational strategies; artificial intelligence; behavioral bias;
    JEL: D01 D9 C7 C8
    Date: 2020–05–29
  5. By: Jeffrey V. Butler; Dietmar Fehr
    Abstract: The impact of culture on non-kin cooperation has been singled out as critical for economic activity. However, causal evidence of culture’s influence on cooperation remains scant. In this paper we provide such evidence, focusing on two key components of culture: preferences and beliefs. Adopting the view that culture is one aspect of an individual’s multi-faceted self-concept (identity) we conduct an experiment with foreign- and US-born Chinese immigrants at a large US public university. In a two-by-two design, we exogenously vary: i) the salience of participants’ American or Chinese cultural identities; and ii) the capacity for culture to affect beliefs by randomly providing previous-session cooperation-rate information. Comparing behavior across cultures and information conditions, our results suggest a prominent role for both preferences and beliefs. In particular, we find that culture’s effects through beliefs are as important as its effects through preferences.
    Keywords: culture, identity, beliefs, preference, experiment
    JEL: C91 D01 O10 P16 Z10
    Date: 2021
  6. By: Caroline Graf; Eva-Maria Merz; Bianca Suanet; Pamala Wiepking
    Abstract: Incentives have surprisingly inconsistent effects when it comes to encouraging people to behave prosocially. Classical economic theory, according to which a specific behavior becomes more prevalent when it is rewarded, struggles to explain why incentives sometimes backfire. More recent theories therefore posit a reputational cost offsetting the benefits of receiving an incentive -- yet unexplained effects of incentives remain, for instance across incentive types and countries. We propose that social norms can offer an explanation for these inconsistencies. Ultimately, social norms determine the reputational costs or benefits resulting from a given behavior, and thus variation in the effect of incentives may reflect variation in norms. We implemented a formal model of prosocial behavior integrating social norms, which we empirically tested on the real-world prosocial behavior of blood donation. Blood donation is essential for many life-saving medical procedures, but also presents an ideal testing ground for our theory: Various incentive policies for blood donors exist across countries, enabling a comparative approach. Our preregistered analyses reveal that social norms can indeed account for the varying effects of financial and time incentives on individual-level blood donation behavior across 28 European countries. Incentives are associated with higher levels of prosociality when norms regarding the incentive are more positive. The results indicate that social norms play an important role in explaining the relationship between incentives and prosocial behavior. More generally, our approach highlights the potential of integrating theory from across the economic and behavioral sciences to generate novel insights, with tangible consequences for policy-making.
    Date: 2021–04

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