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on Evolutionary Economics |
| By: | Songjia Fan; Yi Tao; Cong Li |
| Abstract: | Selection shapes all kinds of behaviors, including how we make decisions under uncertainty. The risk attitude reflected from it should be simple, flexible, yet consistent. In this paper we engaged evolutionary dynamics to find the decision making rule concerning risk that is evolutionarily superior, and developed the theory of evolutionary rationality. We highlight the importance of selection intensity and fitness, as well as their equivalents in the human mind, named as attention degree and meta-fitness, in the decision making process. Evolutionary rationality targets the maximization of the geometric mean of meta-fitness (or fitness), and attention degree (or selection intensity) holds the key in the change of attitude of the same individual towards different events and under varied situations. Then as an example, the Allais paradox is presented to show the application of evolutionary rationality, in which the anomalous choices made by the majority of people can be well justified by a simple change in the attention degree. |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.09813&r= |
| By: | Raphaël Franck; Oded Galor; Omer Moav; Ömer Özak |
| Abstract: | This research explores the persistent effect of the Neolithic Revolution on the evolution of life expectancy in the course of human history. It advances the hypothesis and establishes empirically that the onset of the Neolithic Revolution and the associated rise in infectious diseases triggered a process of adaptation reducing mortality from infectious diseases while increasing the propensity for autoimmune and inflammatory diseases. Exploiting an exogenous source of variation in the timing of the Neolithic Revolution across French regions, the analysis establishes the presence of these conflicting forces - the beneficial effects on life expectancy before the second epidemiological transition and their adverse effects thereafter. |
| JEL: | I15 O10 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30221&r= |
| By: | Andreas Ek (Lund University); Gunes Gokmen (Lund University); Kaveh Majlesi (Monash University, Lund University, IZA, and CEPR) |
| Abstract: | There are large cross-country differences in the portfolio composition of individual investors. In this paper, we study the role of cultural heritage in explaining these differences by combining data on the asset allocation of second-generation immigrants in Sweden with the cultural attributes of their parents' countries of origin. Descendants of more risk-loving and less patient cultures take more idiosyncratic risk by keeping a higher share of their financial wealth in directly held stocks. They are also less likely to delegate their equity investment, as they assign a lower share of their wealth to mutual funds. We show that these findings are not driven by the selection of migrating parents, other country of origin attributes, or individual socio-economic characteristics. Our findings also provide an alternative explanation for under-diversification and lack of delegation among many individual investors. |
| Keywords: | culture, cultural transmission, delegation, diversification, investment behaviour |
| JEL: | G11 G40 G50 G51 Z10 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2022-16&r= |
| By: | Davis, John B. (Department of Economics Marquette University) |
| Abstract: | Change in economics has likely always been a subject of discussion in economics and political economy. That discussion may have languished in the first post-World War II decades when neoclassicism was ascendent and dominated economics, but the emergence of game theory, more recently behavioral economics, and a variety of other new fields and approaches in economics since the 1980s has re-invigorated interest in the subject so that now there are many views on it. Yet systematic investigation of what change in economics involves has advanced little. Change is clearly always on-going in any discipline, but when it is said there is or is not ‘change in economics’ something more significant beyond this is usually intended. How, then, can this more significant sort of change be identified and explained? I begin by discussing the issue of method for analyzing change in economics. |
| Keywords: | change, boundaries, interdisciplinary, core-periphery, research practices, world values survey, open-closed systems |
| JEL: | A12 A13 A14 B20 B41 B50 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:2022-05&r= |
| By: | Leonard Hoeft (Humboldt University to Berlin); Michael Kurschilgen (Technical University of Munich, the Max Planck Institute for Research on Collective Goods, and the Stanford Graduate School of Business); Wladislaw Mill (University of Mannheim); Simone Vannuccini (Science Policy Research Unit, University of Sussex) |
| Abstract: | Economists model legal compliance as the process of maximizing utility while weighing the consequences from norm violation against other (monetary and non-monetary) considerations. Legal philosophers, on the other hand, believe that norms provide exclusionary reasons, i.e. that people apply the norm precisely to make a choice without weighing up on other issues. We test and compare both models in a controlled online experiment. We conduct a modified dictator game with partially unknown yet ascertainable payoffs, and vary between treatments the presence and content of authoritative norms. Our experimental results show that – in the presence of a norm – participants follow norms without searching for information that they deem important in the absence of a norm. This pattern is independent of the specific content of the norm. Our results are consistent with the legal model of norm compliance. |
| Keywords: | Norms, Information, Authority, Willful Ignorance, Dictator Game, Legal Theory, Experiment |
| JEL: | C91 D63 D81 D83 K10 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:aiw:wpaper:22&r= |
| By: | Héloise Cloléry (CREST-Ecole polytechnique, IP Paris); Guillaume Hollard (CREST-Ecole polytechnique, IP Paris and CNRS); Fabien Perez (CREST-Ensae, IP Paris); Inès Picard (CREST-Genes, IP Paris) |
| Abstract: | Trust is an important economic variable that may however be subject to measurement error, leading to econometric issues such as attenuation bias or spurious correlations. We use a test/retest protocol to assess the measurement error in the two main tasks that are used to elicit trust, namely survey questions and experimental games. We find that trust measures based on the trust game entail substantial measurement error (with up to 15% of noise), while there is virtually no noise in stated trust measures. Given the specificity of our subject pool (students in a top Engineering school) and the short period of time between the test and the retest, we consider these percentages of noise as lower bounds. We also provide a sub-group analysis based on measures of cognitive ability and effort. We find substantial heterogeneity across sub-groups in trust-game behavior, but none for the survey questions. We finally discuss which measure of trust should be used, and the estimation strategies that can be applied to limit the effect of measurement error. |
| Keywords: | Trust; Trust Game; Measurement Error; ORIV. |
| JEL: | C18 C26 C91 D91 |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2022-13&r= |
| By: | Xiqian Cai (Institute of Economics, School of Economics and Wang Yanan Institute for Studies in Economics, Xiamen University); Lata Gangadharan (Department of Economics, Monash Business School, Monash University); Yi Lu (School of Economics and Management, Tsinghua University); Xiaojian Zhao (Department of Economics, Monash Business School, Monash University) |
| Abstract: | In the modern economy, entrepreneurship is associated with individuals' tendency to invest in risky projects. We conjecture that societies with a historical background in sea fishing are more likely than other societies to exhibit risk taking behaviors in modern times, as the earliest sea fishers needed to be sufficiently risk seeking to venture into the unpredictable ocean. We examine the effect of a sea fishing legacy on risk attitudes in modern societies and find that ancestors' dependence on sea fishing increases risk-taking preferences and eco- nomically related characteristics. This approach provides a novel explanation for the origin of individuals'preference for risk. |
| Keywords: | Risk preferences; Sea-fishing legacy; Cross-country differences |
| JEL: | Z10 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2022-17&r= |