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on Evolutionary Economics |
| By: | Mohlin, Erik (Swedish Defense University); Rigos, Alexandros (University of Copenhagen) |
| Abstract: | We present a model of how an individual’s preference for a specific behaviour can evolve as an adaptation to her social environment. Our key assumptions are that the decision maker (DM) (i) is boundedly rational in her ability to process information and evaluate which actions yield the highest payoff and (ii) can develop a subjective preference for actions. A stronger preference for an action reduces the probability of not taking it when it is optimal (omission error), but it also increases the probability of taking the action when it is suboptimal (commission error). The optimally adapted preference strikes a balance between these errors and depends on the DM’s environment. DMs are typically better off (in objective terms) if they are endowed with subjective preferences that deviate from maximisation of expected objective payoff. Importantly, if DMs can evaluate actions perfectly, they do not develop such biases. The results extend in an intuitive manner to n-player, two-strategy supermodular games. Our framework can be used to interpret preferences for specific actions or strategies (e.g., conditional cooperation, truth-telling, or norm-following) as psychological and cultural consequences of material incentives and social organisation. |
| Keywords: | Preference evolution; Bounded rationality; Culture; Cooperation; Cognitive economics; Logit choice; Monotone comparative statics; Supermodular games |
| JEL: | C72 C73 D01 D83 D91 |
| Date: | 2026–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lunewp:2026_008 |
| By: | Schnell, Eric; Schimmelpfennig, Robin; Li, Xueheng; Muthukrishna, Michael |
| Abstract: | Visible wealth creates both prestige and envy. In some societies, prestige wins with people gaining status through conspicuous consumption, while in others, envy dominates with people concealing signs of success. We argue that these are alternative cultural equilibria that can be explained by two structural features of societies: (1) the intensity of status competition (how strongly relative status translates into payoffs) and (2) the strength of property rights (how costly it is for others to damage or appropriate others' wealth). We formalize this context in an economic model in which players choose their level of production and consumption, where consumption acts as a signal of a player's status, and players destroy others' wealth at a cost. The model predicts three regimes. When property rights are very weak and status competition is strong, the model predicts compressed and homogenized consumption (i.e., egalitarianism) and low production. Standing out invites destruction, the threat of which serves as a leveling mechanism. This first regime is consistent with many hunter-gatherer societies. As property rights increase, a second regime emerges with most individuals concealing wealth to some degree. This second regime is consistent with societies where evil eye beliefs are common; evil eye may be a culturally evolved mechanism that encourages wealth shielding. When property rights are strong, conspicuous consumption becomes the dominant strategy. This effect increases when the intensity of status competition is stronger, as long as property rights are strong. This third regime is consistent with many highly developed societies. We derive testable predictions linking institutions and competitive intensity to (a) display versus concealment, (b) visible inequality, and (c) productive versus destructive competition, and evaluate them against existing evidence. |
| Keywords: | evil eye beliefs;egalitarianism;conspicuous consumption;zero-sum competition;formal modeling |
| JEL: | J1 |
| Date: | 2026–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140808 |
| By: | Alberto Bisin; Thierry Verdier |
| Abstract: | In this paper we survey recent advances in the economic theory of identity formation. We restrict our analysis to models which conceptualize identity formation as embedded into an inter-generational cultural transmission process, and therefore have implications for the dynamics of social identity. Through the lens of a general framework linking identity formation to cultural evolution, we discuss issues related to the dynamics of oppositional, racial, or minority attitudes, cultural polarization, identity switching, and openness to alternative identities. An application of the set-up to multidimensional identities constructed from combinations of characteristics, provides conditions under which societies converge (or not) toward narrow identities centered on salient markers such as religion, ethnicity, or race. We conclude by outlining promising avenues for future research. |
| JEL: | D1 J13 J15 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35506 |
| By: | Pedro Henrique Gonçalves da Silva Napoli de Lima; Bruno Brandão Fischer; Ron Boschma; Gustavo Hermínio Salati Marcondes de Moraes |
| Abstract: | Why do some urban regions sustain a much broader range of economic activities than others? Evolutionary Economic Geography (EEG) has answered this question mainly through the principle of relatedness, in which urban scale has been treated as a control variable. Doing so, it has paid little attention to regional urban scale as a structural determinant of sectoral diversity. . We address this gap by combining the urban scaling tradition with EEG's capability-theoretic framework. Our study explores the relationship between sectoral diversity, urban size, and regional capabilities for US metropolitan statistical areas (MSAs) over the period 2012–2023. Three findings emerge. First, sectoral diversity scales logarithmically with population and the relationship is temporally stable across the panel — what we call the saturation principle: urban scale defines a diminishing-returns frontier for sectoral breadth. Second, regional capabilities (proxied by the Economic Complexity Index) are associated with deviations from this frontier and with the technological intensity of newly entered sectors. Third, urban scale conditions these capability effects asymmetrically — compressing the capability premium for sectoral breadth as regions approach the frontier, while amplifying the conversion of capabilities into more technologically intensive entries. Overall, the study contributes to bridging urban scaling theory and EEG by formalising urban scale as a structural boundary condition for regional diversification. |
| Keywords: | evolutionary economic geography, urban scaling, complexity economics, complex adaptive systems, regional diversification, geography of innovation |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2620 |
| By: | Paul X. McCarthy; Xian Gong; John A. Johnson; Marian-Andrei Rizoiu; Margaret L. Kern; Jean M. Twenge |
| Abstract: | Generational stereotypes are widespread, but they often rely on anecdotes, and it remains challenging to disentangle true birth-cohort differences from the universal effects of ageing and historical periods. Using a statistical approach that separates effects of age, calendar time, and cohort, we analyzed Big Five personality data (five broad dimensions of personality) from N=773, 714 individuals assessed across 30 years. Traits that shape social interaction diverged between generations, whereas a prosocial core comprising morality, discipline, and emotional awareness was stable across cohorts. Generation Z (born between 1995 and 2012) showed lower excitement seeking and gregariousness alongside higher self-consciousness and anxiety. These findings suggest that cohort change is selective rather than global: the dispositions through which people engage with the social world may be adapting to contemporary cultural conditions, while core prosocial tendencies remain stable across generations. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.18119 |