nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2021‒07‒19
six papers chosen by
Matthew Baker
City University of New York

  1. The Roots of Cooperation By Zvonimir Basic; Parampreet Christopher Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
  2. Grasping transformative regional development from a co-evolutionary perspective – a research agenda By Camilla Chlebna; Hanna Martin; Jannika Mattes
  3. A Theory of Ex Post Rationalization By Erik Eyster; Shengwu Li; Sarah Ridout
  4. Patterned Variation: The Role of Psychological Dispositions in Social and Institutional Evolution By Schlicht, Ekkehart
  5. Endogenous viral mutations, evolutionary selection, and containment policy design By Patrick Mellacher
  6. Group Selection of Handicap Signaling By Ethan Holdalh; Jiabin Wu

  1. By: Zvonimir Basic; Parampreet Christopher Bindra; Daniela Glätzle-Rützler; Angelo Romano; Matthias Sutter; Claudia Zoller
    Abstract: Understanding the roots of human cooperation among strangers is of great importance for solving pressing social dilemmas and maintening public goods in human societies. We study the development of cooperation in 929 young children, aged 3 to 6. In a unified experimental framework, we examine which of three fundamental pillars of human cooperation – direct and indirect reciprocity as well as third-party punishment – emerges earliest as an effective means to increase cooperation in a repeated prisoner’s dilemma game. We find that third-party punishment exhibits a strikingly positive effect on cooperation rates by doubling them in comparison to a control condition. It promotes cooperative behavior even before punishment of defectors is applied. Children also engage in reciprocating others, showing that reciprocity strategies are already prevalent at a very young age. However, direct and indirect reciprocity treatments do not increase overall cooperation rates, as young children fail to anticipate the benefits of reputation building. We also show that the cognitive skills of children and the socioeconomic background of parents play a vital role in the early development of human cooperation.
    Keywords: cooperation, reciprocity, third-party punishment, reputation, children, parents, cognitive abilities, socioeconomic status, prisoner’s dilemma game, experiment
    JEL: C91 C93 D01 D91 H41
    Date: 2021
  2. By: Camilla Chlebna (Institute of Social Sciences, Carl von Ossietzky University, Germany); Hanna Martin (Department of Business Administration and Centre for Regional Analysis, School of Business, Economics and Law, University of Gothenburg, Sweden); Jannika Mattes (Institute of Social Sciences, Carl von Ossietzky University, Germany)
    Abstract: A comprehensive perspective of regional transformative development is pertinent in light of recurring crises and grand societal challenges. We propose an integrative research agenda for transformative regional development, based on a co-evolutionary perspective on industry-focused regional path development and transitions. Combining existing knowledge from the debates on evolutionary economic geography and transition studies we define three key dimensions of co-evolution: the interrelations between different paths and their impact, interregional and multiscalar development dynamics, and the interdependence between industries and society. We address each dimension separately and suggest concrete avenues for further research.
    Keywords: evolutionary economic geography, regional industrial path development, socio-technical transitions, co-evolution, research agenda
    Date: 2021
  3. By: Erik Eyster; Shengwu Li; Sarah Ridout
    Abstract: Human beings attempt to rationalize their past choices, even those that were mistakes in hindsight. We propose a formal theory of this behavior. The theory predicts that agents commit the sunk-cost fallacy. Its model primitives are identified by choice behavior and it yields tractable comparative statics.
    Date: 2021–07
  4. By: Schlicht, Ekkehart
    Abstract: The new institutional economics has one of its roots in evolutionary thinking. The idea is that there is competition among organizational forms. Some forms spread faster than others and thereby displace and eventually destroy the less well adapted forms. In the end, the most 'efficient' organizational formation will survive, where 'efficiency’ is a social analogue for biological fitness. The process is predominately envisaged as a process of what I am going to term 'blind evolution': a combination of random variation and selection. The idea of randomness is put into question. If evolution is is to be able to work successfully on complex organisms or organizations, it is necessary that variation occurs in a patterned fashion with systematically correlated changes. Once the importance of patterned variation is established, it must be asked where the patterns come from. It will be argued that, for the purpose of the social sciences, these patterns are generated by psychological regularities, both cognitive and emotional. Features of patterning are discussed (channeling by constraints, hitchhiking, radiation, founder effects, irreversibly, functional shifts, evolutionary detours, punctuation).
    Keywords: evolution; evodevo; evo-devo; variation; selection; institutional economics; social psychology; channeling by constraints; hitchhiking; radiation; founder effects; irreversibly; functional shifts; evolutionary detours; punctuation
    JEL: B15 B25 B52 D02 D23 E14
    Date: 2021
  5. By: Patrick Mellacher
    Abstract: How will the novel coronavirus evolve? I study a simple SEPAIRD model, in which mutations may change the properties of the virus and its associated disease stochastically and antigenic drifts allow new variants to partially evade immunity. I show analytically that variants with higher infectiousness, longer disease duration, and shorter latency period prove to be fitter. "Smart" containment policies targeting symptomatic individuals may redirect the evolution of the virus, as they give an edge to variants with a longer incubation period and a higher share of asymptomatic infections. Reduced mortality, on the other hand, does not per se prove to be an evolutionary advantage. I then implement this model as an agent-based simulation model in order to explore its aggregate dynamics. Monte Carlo simulations show that a) containment policy design has an impact on both speed and direction of viral evolution, b) the virus may circulate in the population indefinitely, provided that containment efforts are too relaxed and the propensity of the virus to escape immunity is high enough, and crucially c) that it may not be possible to distinguish between a slowly and a rapidly evolving virus looking only at short-term epidemiological outcomes. Thus, what looks like a successful mitigation strategy in the short run, may prove to have devastating long-run effects. These results suggest that optimal containment policy must take the propensity of the virus to mutate and escape immunity into account, strengthening the case for genetic and antigenic surveillance even in the early stages of an epidemic.
    Date: 2021–07
  6. By: Ethan Holdalh; Jiabin Wu
    Abstract: This paper proposes a group selection model to explain the rise and fall of handicap signaling. In one population, assortative matching according to types is sustained by handicap signaling. In the other population, individuals do not signal and they are randomly matched. Types evolve within each population. At the same time, the two populations may engage in competition. Due to assortative matching, high types grow faster in the population with signaling, yet they bear the cost of signaling, which lowers their population's fitness in the long run. We show that the survival of the signaling population depends crucially on the timing and the intensity of inter-population competition.
    Date: 2021–06

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