nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2022‒09‒12
eight papers chosen by
Matthew Baker
City University of New York

  1. Market paternalism: Do people really want to be nudged towards consumption? By Braganza, Oliver
  2. Deep historical roots, culture choice and the New World Order By Miller, Marcus
  3. Civil and Ethnic Conflict in Historical Political Economy By Jha, Saumitra
  4. Confidence, Self-Selection and Bias in the Aggregate By Benjamin Enke; Thomas Graeber; Ryan Oprea
  5. Systemic-risk and evolutionary stable strategies in a financial network By Indrajit Saha; Veeraruna Kavitha
  6. The German Local Population Database (GPOP), 1871 to 2019 By Felix Roesel
  7. Intelligence Disclosure and Cooperation in Repeated Interactions By Lambrecht, Marco; Proto, Eugenio; Rustichini, Aldo; Sofianos, Andis
  8. Estimating Intergenerational and Assortative Processes in Extended Family Data By Collado, Dolores; Ortuño-Ortín, Ignacio; Stuhler, Jan

  1. By: Braganza, Oliver
    Abstract: Modern societies, almost unequivocally, pursue the goal of economic growth. The central normative reason for this has recently been called the 'consumerist claim', namely the standard economic claim that increases in consumption (i.e. growth), by and large entail welfare increases. However, the consumerist claim does not take account of behavioral economics. Specifically, it disregards that consumption increases can also be achieved by nudging, as practiced e.g. in marketing or advertising. Remarkably, proponents of the consumerist claim are often vocal critics of governmental nudging, which is decried as manipulative and paternalistic, but are simultaneously dismissive or apologetic about market-derived nudging. Here we argue, that in light of behavioral economics Adam Smiths 'invisible hand' will often produce outcomes as if it belonged to an 'invisible paternalist', who systematically and efficiently nudges individuals towards ever increasing consumption. Specifically, we develop the notion of 'market paternalism' (MP), based on a synthesis of behavioral and evolutionary economic reasoning. MP entails three central properties: First, unregulated markets naturally give rise to pervasive nudges, modifying our behavior, preferences and beliefs in ways beyond our conscious awareness and control. Second, these nudges will coalesce towards an emergent system-level end, that cannot be derived from any coherent notion of individual preferences. Third, MP operates in part by a cultural evolutionary mechanism, implying that it will occur with computational and coordinative power far beyond any individual (or government). To assess the potential practical relevance of MP, we survey the literature, finding clear evidence that MP drives or exacerbates numerous pressing societal problems, including rampant obesity, mass surveillance and the climate crisis. It does so by covertly and incessantly nudging not only our behavior, but also our preferences, values and beliefs towards the single goal of increasing consumption. The surprising consequence is that, in light of behavioral economics, unregulated markets should be expected to systematically subvert individual autonomy and rationality, the very values typically invoked to defend the consumerist claim.
    Date: 2022
  2. By: Miller, Marcus (University of Warwick, CAGE and CEPR)
    Abstract: Gerard Roland examines data going back to 3,000 BC for historical roots that might explain the current division of nations as between cultures of collectivism and individualism. In response to the appeal for theories bearing on the empirical evidence presented - and of recent moves by Russia and China to create a ‘New World Order’ based on similar cultural division - three contributions are discussed. First is the ‘competing powers’ perspective of Acemoglu and Robinson, who propose that individualism flourishes where power is evenly balanced between the state and the people : otherwise, either Despotism or Disorder will ultimately prevail. Then there is Ken Binmore’s study of cooperative social contracts: this offers support for stable societies of each cultural type, based on the folk theorem of repeated games. Finally the notion that dictatorship may be sustained by deception rather than repression - by leaders whom Guriev and Treisman call ‘spin dictators’. In the light of these perspectives, what to make of the current drive for a new global order that recognizes different ‘spheres of influence’ for each of Roland’s cultural types? We look specifically at the case of Russia.
    Keywords: Individualism ; Collectivism ; Culture ; Social Contracts ; Social preferences ; Neofeudalism ; Despotism ; New World Order. JEL Codes: C70 ; C73 ; N00 ; P00 ; P50 ; Z10 ; Z13
    Date: 2022
  3. By: Jha, Saumitra (Stanford U)
    Date: 2022–07
  4. By: Benjamin Enke; Thomas Graeber; Ryan Oprea
    Abstract: The influence of behavioral biases on aggregate outcomes like prices and allocations depends in part on self-selection: whether rational people opt more strongly into aggregate interactions than biased individuals. We conduct a series of betting market, auction and committee experiments using 15 classic cognitive bias tasks. We document that some cognitive errors are strongly reduced through self-selection, while others are not affected at all. A large part of this variation is explained by the quality of people's meta-cognition. In some cognitive tasks, confidence and performance are strongly positively correlated, while for others this link is absent or even negative.
    JEL: D01 D03
    Date: 2022–07
  5. By: Indrajit Saha; Veeraruna Kavitha
    Abstract: We consider a financial network represented at any time instance by a random liability graph which evolves over time. The agents connect through credit instruments borrowed from each other or through direct lending, and these create the liability edges. These random edges are modified (locally) by the agents over time, as they learn from their experiences and (possibly imperfect) observations. The settlement of the liabilities of various agents at the end of the contract period (at any time instance) can be expressed as solutions of random fixed point equations. Our first step is to derive the solutions of these equations (asymptotically and one for each time instance), using a recent result on random fixed point equations. The agents, at any time instance, adopt one of the two available strategies, risky or risk-free investments, with an aim to maximize their returns. We aim to study the emerging strategies of such replicator dynamics that drives the financial network. We theoretically reduce the analysis of the complex system to that of an appropriate ordinary differential equation (ODE). Using the attractors of the resulting ODE we showed that the replicator dynamics converges to one of the two pure evolutionary stable strategies (all risky or all risk-free agents); one can have mixed limit only when the observations are imperfect. We verified our theoretical findings using exhaustive Monte Carlo simulations. We established that the dynamics avoid the emergence of the systemic-risk regime (where majority default).
    Date: 2022–06
  6. By: Felix Roesel
    Abstract: I present the first database of historical local population figures for all Germany. The German Local Population Database (GPOP) includes total population in 1871, 1910, 1939, 1946, 1961, 1987, 1996, 2011, and 2019 for the universe of all German municipalities, counties, and states at consistent contemporary boundaries (31 December 2019). The database was hand-collected and assembled from more than 50 sources. The data reflect 150 years of regional development and disparities in Germany. For example, East and West Germany are heavily diverging in population since 1945; and the divide was not reversed but even doubled after reunification.
    Keywords: population, data, history, Germany, GPOP
    JEL: J11 R11 N33 N34
    Date: 2022
  7. By: Lambrecht, Marco (Hanken School of Economics); Proto, Eugenio (University of Glasgow); Rustichini, Aldo (University of Minnesota); Sofianos, Andis (Heidelberg University)
    Abstract: We investigate in a laboratory setting whether revealing information on the intelligence of both players affects behavior in repeated games. We study the Prisoners' Dilemma (PD) and Battle of Sexes (BoS) as they cover a large set of the interesting scenarios generated by repeated games of two actions two players symmetric stage games. Furthermore, in order to understand how cognitive skills disclosure interacts with different potential payoff allocations, we consider two versions of the BoS, with high and low payoff inequality. In PD, disclosure markedly hampers cooperation, as higher intelligence players trust their partners less when made aware that they play against someone of lower ability than themselves. Similarly, in BoS with low payoff inequality, disclosure disrupts coordination, as higher intelligence players try to force their most preferred outcome. However, in the BoS with high payoff inequality, this pattern of behavior changes substantially. Disclosure does not significantly affect coordination, while coordination is more often on outcomes that favor the less intelligent player. This result may indicate an intention to achieve a fairer division, or that the intelligent player anticipates that the other player will not concede.
    Keywords: repeated prisoners dilemma, cooperation, intelligence, IQ
    JEL: C73 C91 C92 D83
    Date: 2022–07
  8. By: Collado, Dolores (Universidad de Alicante); Ortuño-Ortín, Ignacio (Universidad Carlos III de Madrid); Stuhler, Jan (Universidad Carlos III de Madrid)
    Abstract: We quantify intergenerational and assortative processes by comparing different degrees of kinship within the same generation. This “horizontal” approach yields more, and more distant kinship moments than traditional methods, which allows us to account for the transmission of latent advantages in a detailed intergenerational model. Using Swedish registers, we find strong persistence in the latent determinants of status, and a striking degree of sorting – to explain the similarity of distant kins, assortative matching must be much stronger than previously thought. Latent genetic influences explain little of the variance in educational attainment, and sorting occurs primarily in non-genetic factors.
    Keywords: intergenerational transmission, multigenerational transmission, assortative mating, extended kins
    JEL: J62
    Date: 2022–07

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