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on Evolutionary Economics |
| By: | Zerong Chen |
| Abstract: | Evolutionary Finance explores the "survival and extinction" questions of investment strategies (portfolio rules) in the market selection process. It models the stochastic dynamics of financial markets based on behavioral and evolutionary principles, where asset prices are determined endogenously by short-run equilibrium between supply and demand, arising from the interaction of competing portfolio rules. This paper presents a survey of developments in Evolutionary Finance with a focus on long-lived, dividend-paying risky securities, where the budget of each investor comes from asset dividends and capital gains. We review several key models in this area addressing the following problems in order: 1) the most general results under the most general assumptions; 2) global evolutionary stability under restrictive assumptions; 3) viewing the model from a different, game-theoretic, perspective and examining almost sure Nash equilibrium strategies under restrictive assumptions. A central goal of the study is to identify an investment strategy that allows an investor to survive in the market selection process, i.e., to keep with probability one, a strictly positive, bounded away from zero share of market wealth over an infinite time horizon, irrespective of the strategies used by other investors. The main results are under general assumptions, such a survival strategy -- an analogue of the famous Kelly rule of "betting one's beliefs" exists -- and is asymptotically unique (within a specific class of strategies called basic). Moreover, under the required stronger assumptions, the Kelly rule is globally evolutionarily stable and is the unique investment strategy that forms a symmetric Nash equilibrium almost surely. |
| JEL: | C73 D53 G11 D58 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:man:sespap:2501 |
| By: | Carol H. Shiue; Wolfgang Keller |
| Abstract: | We study how elite power persisted through the Ming–Qing transition in Central China. Using genealogical microdata on married couples and their descendants, linked to measures of local elite influence, we estimate the effects of the Ming collapse (1368–1644) on families (people) and on regions (places). A family line-level treatment and control approach shows that elites experienced an immediate loss of influence, but their descendants recovered and consolidated elite status under the Qing (1644–1911). In contrast, a region-level design indicates that areas more heavily exposed to Ming-collapse destruction suffered persistent adverse outcomes. Evidence on career choice is consistent with a trauma-induced shift toward civil service examination careers, with stronger intergenerational transmission of exam-oriented norms in families more exposed to destruction. The results document adaptive persistence of elite families despite regime change, alongside lasting regional scarring, and highlight the role of cultural transmission in the persistence of elite status. |
| JEL: | N95 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34451 |
| By: | Oded Galor; Daniel C. Wainstock |
| Abstract: | Is income inequality in the United States primarily driven by disparities between ethnic groups or within them? Contrary to conventional wisdom, this study uncovers a striking and transformative empirical regularity: an overwhelming 96% of contemporary inequality arises from disparities within groups sharing a common ancestral origin, dwarfing the comparatively minor contribution of inequality between groups. This extraordinary pattern persists across time, educational attainment, demographic characteristics, and geographic regions. The findings represent a shift in the empirical understanding of inequality in the United States, revealing that the deepest and most persistent economic divides run within, rather than between, ethnic communities. |
| Keywords: | inequality, ethnicity, within group inequality, between group inequality |
| JEL: | O15 Z13 D63 J15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12245 |