nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2022‒10‒03
six 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 Gächter, Simon; Starmer, Chris; Tufano, Fabio
  3. Beliefs, Learning, and Personality in the Indefinitely Repeated Prisoner's Dilemma By Gill, David; Rosokha, Yaroslav
  4. Stress, Ethnicity, and Prosocial Behavior By Johannes Haushofer; Sara Lowes; Abednego Musau; David M. Ndetei; Nathan Nunn; Moritz Poll; Nancy Qian
  5. Historical Political Economy: What Is It? By Jeffrey Jenkins; Jared Rubin
  6. Trust Institutions, Perceptions of Economic Performance and the Mitigating role of Political Diversity By Samba Diop; Simplice A. Asongu

  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: 2022–08
  2. By: Gächter, Simon (University of Nottingham); Starmer, Chris (University of Nottingham); Tufano, Fabio (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: social relationships, group cohesion, oneness, coordination, weak-link game, experiments, real groups
    JEL: C92 D91
    Date: 2022–08
  3. By: Gill, David (Purdue University); Rosokha, Yaroslav (Purdue University)
    Abstract: We aim to understand the role and evolution of beliefs in the indefinitely repeated prisoner's dilemma (IRPD). To do so, we elicit beliefs about the supergame strategies chosen by others. We find that heterogeneity in beliefs and changes in beliefs with experience are central to understanding behavior and learning in the IRPD. Beliefs strongly predict cooperation, initial beliefs match behavior quite well, most subjects choose strategies that perform well given their beliefs, and beliefs respond to experience while becoming more accurate over time. Finally, we uncover a novel mechanism whereby trusting subjects learn to cooperate through their interaction with experience.
    Keywords: infinitely repeated prisoner’s dilemma, cooperation, optimism, belief elicitation, supergame strategies, experimentation, trust, experiment
    JEL: C72 C73 C91 D91
    Date: 2022–08
  4. By: Johannes Haushofer; Sara Lowes; Abednego Musau; David M. Ndetei; Nathan Nunn; Moritz Poll; Nancy Qian
    Abstract: While observational evidence suggests that people behave more prosocially towards members of their own ethnic group, many laboratory studies fail to find this effect. One possible explanation is that coethnic preference only emerges during times of stress. To test this hypothesis, we pharmacologically increase levels of the stress hormone cortisol, after which participants complete laboratory experiments with coethnics and noncoethnics. We find mixed evidence that increased cortisol decreases prosocial behavior. Coethnic preferences do not vary with cortisol. However, in contrast to previous studies, we find strong and robust evidence of coethnic preference.
    JEL: O12 Z10
    Date: 2022–08
  5. By: Jeffrey Jenkins; Jared Rubin (Chapman University)
    Abstract: In this chapter, we define what historical political economy (HPE) is and is not, classify the major themes in the literature, assess the relative strengths and weaknesses of the literature, and point to future directions. We view HPE as social scientific inquiry which highlights political causes or consequences of historical issues. HPE is different from conventional political economy in the emphasis placed on historical processes and context. While we view HPE in the most inclusive manner reasonable, we define it to exclude works that are either solely of contemporary importance or use historical data without any historical context (e.g., long-run macroeconomic time series data). The future of HPE is bright, especially as more historical data from around the world become available via digitization. Consequently, the future frontier of the field likely falls outside of the US, which is the concern of a disproportionate amount of the current literature.
    Keywords: historical political economy, economics, political science, economic history, political history
    JEL: N00 P00
    Date: 2022
  6. By: Samba Diop (Alioune Diop University, Bambey, Senegal); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Several previous studies have explored the nexus between trust and socio-economic conditions but do not attempt to examine channels through which the relation operates. In this paper, we examine how political fractionalization mitigates the positive relationship between trust institutions and national economic performance in Africa. Using Round 7 data of Afrobarometer in over 1000 districts in 34 countries, we find that trust institutions positively and significantly affect economic performance. Nevertheless, the positive effect is attenuated in districts with a high level of political diversity. More specifically, a higher level of trust is associated with lower economic performance at a higher level of political fractionalization and vice versa, with a steady linear decrease of the estimated coefficients. Policy implications are discussed.
    Keywords: Trust institutions; economic performance; political diversity
    JEL: K00 O10 P16 P43 P50
    Date: 2022–09

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