nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2022‒09‒19
ten papers chosen by
Matthew Baker
City University of New York

  1. Evolutionarily stable preferences By Alger, Ingela
  2. Measuring “group cohesion” to reveal the power of social relationships in team production By Simon Gaechter; Chris Starmer; Fabio Tufano
  3. Economic history and the future of pedagogy in economics By Brownlow, Graham; Colvin, Christopher L.
  4. Neural Payoff Machines: Predicting Fair and Stable Payoff Allocations Among Team Members By Daphne Cornelisse; Thomas Rood; Mateusz Malinowski; Yoram Bachrach; Tal Kachman
  5. Extensive-Form Level-k Thinking By Burkhard C. Schipper; Hang Zhou
  6. Democracy and the quality of economic institutions: Theory and evidence By Krieger, Tommy
  7. The development of the arid tropics: lessons for economic history By Roy, Tirthankar
  8. Measuring Preferences for Competition By Lina Lozano; Ernesto Reuben
  9. Sheila Dow's Open Systems By Davis, John B.
  10. The Analogical Foundations of Cooperation By Philippe Jehiel; Larry Samuelson

  1. By: Alger, Ingela
    Abstract: The 50-year old definition of an evolutionarily stable strategy provided a key tool for theorists to model ultimate drivers of behavior in social interactions. For decades economists ignored ultimate drivers and used models in which individuals choose strate-gies based on their preferences. This article summarizes some key findings in the literature on evolutionarily stable preferences, which in the past three decades has proposed models that combine the two approaches: Nature equips individuals with preferences, which deter-mine their strategy choices, which in turn determines evolutionary success. The objective is to highlight complementarities and potential avenues for future collaboration between biologists and economists.
    Date: 2022–09–01
  2. By: Simon Gaechter (University of Nottingham); Chris Starmer (University of Nottingham); Fabio Tufano (University of Nottingham)
    Abstract: We introduce “group cohesion” to study the economic relevance of social relationships in team production. We operationalize measurement of group cohesion, adapting the “oneness scale” from psychology. A series of experiments, including a pre-registered replication, reveals strong positive associations between group cohesion and performance assessed in weak-link coordination games, with high-cohesion groups being very likely to achieve superior equilibria. In exploratory analysis, we identify beliefs rather than social preferences as the primary mechanism through which factors proxied by group cohesion influence group performance. Our evidence provides proof-of-concept for group cohesion as a useful tool for economic research and practice.
    Keywords: group cohesion; social relationships; team production
    Date: 2022–12
  3. By: Brownlow, Graham; Colvin, Christopher L.
    Abstract: Economic history is integral to the study of economics and economies. Besides providing students with a valuable long-run perspective on the modern world, the field also helps them to better understand the contingency of economic theory. Despite a newfound interest in economic history among economists, teaching and learning in economic history at undergraduate level varies enormously across the UK. We review the different types of economic history provisioning in UK universities, account for the trends we document, and set out viable options for reform. We advance the idea that the teaching of economic history can be integrated into other higher-level undergraduate field courses, an approach we call "Teaching Economics With Economic History". We end by focusing on economic history teaching within the context of business schools.
    Keywords: economic history,pedagogy,undergraduate curriculum
    JEL: A22 B20 N01
    Date: 2022
  4. By: Daphne Cornelisse; Thomas Rood; Mateusz Malinowski; Yoram Bachrach; Tal Kachman
    Abstract: In many multi-agent settings, participants can form teams to achieve collective outcomes that may far surpass their individual capabilities. Measuring the relative contributions of agents and allocating them shares of the reward that promote long-lasting cooperation are difficult tasks. Cooperative game theory offers solution concepts identifying distribution schemes, such as the Shapley value, that fairly reflect the contribution of individuals to the performance of the team or the Core, which reduces the incentive of agents to abandon their team. Applications of such methods include identifying influential features and sharing the costs of joint ventures or team formation. Unfortunately, using these solutions requires tackling a computational barrier as they are hard to compute, even in restricted settings. In this work, we show how cooperative game-theoretic solutions can be distilled into a learned model by training neural networks to propose fair and stable payoff allocations. We show that our approach creates models that can generalize to games far from the training distribution and can predict solutions for more players than observed during training. An important application of our framework is Explainable AI: our approach can be used to speed-up Shapley value computations on many instances.
    Date: 2022–08
  5. By: Burkhard C. Schipper; Hang Zhou (Department of Economics, University of California Davis)
    Abstract: Level-k thinking and Cognitive Hierarchy have been widely applied as a normal-form solution concept in behavioral and experimental game theory. We consider the extension of level-k thinking to extensive-form games. Player’s may learn about levels of opponents’ thinking during the play of the game because some information sets may be inconsistent with certain levels. In particular, for any information set reached, a level-k player attaches the maximum level-l thinking for l
    Keywords: Level-k thinking, Cognitive hierarchy, Theory-of-Mind, Rationalizability, Iterated admissibility, Extensive-form rationalizability, ∆-rationalizability, Mutual belief in rationality, Experimental game theory.
    JEL: C72 C92 D91
    Date: 2022–09–01
  6. By: Krieger, Tommy
    Abstract: We present a simple model, illustrating how democracy may improve the quality of the economic institutions. The model further suggests that institutional quality varies more across autocracies than across democracy and that the positive effect of democracies on economic institutional quality increases in people's human capital. Using a panel data set that covers 150 countries and the period from 1920 to 2019, and different measures of economic institutional quality, we show results from fixed effect and instrumental variable regressions that are in line with the predictions of our model.
    Keywords: Democracy,Development,Economic Institutions,Human Capital,Political Economy,Political Transitions
    JEL: D73 H11 O43 P14 P48
    Date: 2022
  7. By: Roy, Tirthankar
    Abstract: For centuries, the world’s tropical regions have been poorer than the temperate-zone countries. Does tropicality make the struggle for economic development harder? What do people caught up in the struggle do? The paper defines ‘tropicality’ as the combination of aridity and seasonal rainfall, and in turn, high inter- and intra-year variability in moisture influx. In the past, this condition would generate a variety of adaptive strategies such as migration and transhumance. In the twentieth century, the response pattern changed from adapting to moisture supply towards control of moisture supply. This process unleashed conflict and environmental stress in the vulnerable geography of the semi-arid tropics.
    Keywords: tropical; economic growth; inequality; drought; development; Taylor & Francis deal
    JEL: N10 N55 N57
    Date: 2022–08–11
  8. By: Lina Lozano; Ernesto Reuben (Division of Social Science)
    Abstract: Recent research has found that competitive behavior measured in experiments strongly predicts individual differences in educational and labor market outcomes. However, there is no consensus on the underlying factors behind competitive behavior in these experiments. Are participants who compete more capable, more confident, and more tolerant of risk, or are they competing because they enjoy competition per se? In this study, we present an experiment designed to measure individuals’ preferences for competition. Compared to previous work, our experiment rules out risk preferences by design, measures beliefs more precisely, and allows us to measure the magnitude of preferences for competition. In addition, we collect multiple decisions per participant, which lets us evaluate the impact of noisy decision-making. We find strong evidence that many individuals possess preferences for competition. Most participants are either reliably competition-seeking or competition averse, and their choices are highly consistent with expected utility maximization. We also find that preferences for competition depend on the number of competitors but not on the participants’ gender.
    Date: 2022–08
  9. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: This paper reviews Sheila Dow’s contributions to open systems thinking as a form of methodological argument and as an important foundation for pluralism in economics. It reviews the origins of her thinking in connection with her distinction between Cartesian/Euclidian and Babylonian thinking in the history of economics, discusses the further development of her views regarding open and closed systems in her 2002 Economic Methodology book and in connection with her ‘structured pluralism’ concept, discusses the 2005 paper co-authored with Victoria Chick, “The Meaning of Open Systems.†examines Dow’s and Chick’s view and critique of critical realism in regard to the relationship between models and theorizing and uses Piero Sraffa’s 1930s the open-closed distinction to provide a similar understanding of such boundaries and the relationship between models and theorizing, and finally comments on Dow’s contribution to openclosed systems thinking and pluralism in economics.
    Keywords: open systems, Babylonian, Euclidian, structured pluralism, critical realism, Samuels, Sraffa
    JEL: B41 B50
    Date: 2022–08
  10. By: Philippe Jehiel (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UCL - University College of London [London]); Larry Samuelson (Yale University [New Haven])
    Abstract: We offer an approach to cooperation in repeated games of private monitoring in which players construct models of their opponents' behavior by observing the frequencies of play in a record of past plays of the game in which actions but not signals are recorded. Players construct models of their opponent's behavior by grouping the histories in the record into a relatively small number of analogy classes to which they attach probabilities of cooperation. The incomplete record and the limited number of analogy classes lead to misspecified models that provide the incentives to cooperate. We provide conditions for the existence of equilibria supporting cooperation and equilibria supporting high payoffs for some nontrivial analogy partitions.
    Keywords: Analogical reasoning,Cooperation,Prisoners' dilemma,Repeated game,Private monitoring Analogical reasoning,Private monitoring
    Date: 2022–07

This nep-evo issue is ©2022 by Matthew Baker. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.