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on Evolutionary Economics |
| By: | Funk, Matt |
| Abstract: | Darwin's "Origin" launched evolution into theoretical orbit and it continues to influence its course. This magnum opus detailed a tenable solution to the most fundamental problem of human existence, and although this Promethean vision contains sundry trivial flaws, there is, however, one nontrivial error which misguides several crucial developments – not only in the evolving structure of evolutionary theory, but across the entire spectrum of science, including politico-economics. This problem has led social and evolutionary theorists alike to mistakenly favour earth-based inputs over cosmic inputs, to over-emphasize biological evolution, and to under-emphasize stellar evolution. These methodological and logical errors have, in turn, emphasized the significance of the individual “struggle against competitors” over the cooperative “struggle against inclement environments”, and thus, as a result, fashionable theories relating to Global Warming, The Problem of Sustainable Economic Development, and The Tragedy of the Commons have been erected on a false foundations – and, moreover, point toward inherently unstable solutions. And to these salient points, in light of the theory presented here, we discover that the effective coordination of global threat mitigation efforts requires unprecedented levels of international politico-economic cooperation. |
| Keywords: | tragedy of the commons; sustainable economic development; global warming; mass extinctions; ecological economics; ideological environmentalism; stellar evolution; cosmic inputs; global threat mitigation; international cooperation |
| JEL: | Q51 Q54 Q57 |
| Date: | 2009–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18807&r=evo |
| By: | Kris De Jaegher; Robert van Rooij |
| Abstract: | This paper brings together several approaches to vagueness, and ends by suggesting a new approach. The common thread in these approaches is the crucial role played by context. Using a single example where there is a conflict of interest between speaker and listener, we start by treating game-theoretic rationales for vagueness, and for the related concepts of generality and ambiguity. We argue that the most plausible application of these models to vagueness in natural language is one where the listener only imperfectly observes the context in which the speaker makes her utterances. We next look at a rationale for vagueness when there is no conflict between speaker and listener, and which is an application of Horn's rule. Further, we tackle the Sorites paradox. This paradox apparently violates standard axioms of rational behaviour. Yet, once it is taken into account that vague language is used in an appropriate context, these axioms are no longer violated. We end with a behavioural approach to vagueness, where context directly enters agents. preferences. In an application of prospect theory, agents think in terms of gains and losses with respect to a reference point. Vague predicates now allow agents to express their subjective valuations, without necessarily specifying the context. |
| Keywords: | Vagueness, signalling games, decision theory, prospect theory |
| JEL: | D82 D83 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0931&r=evo |
| By: | Kim, Young Chul; Loury, Glenn |
| Abstract: | Previous literature on statistical discrimination explained stereotypes based on the existence of multiple equilibria, in which principals have different self-confirming beliefs about different social groups (Arrow, 1973; Coate and Loury, 1993). However, the literature has not provided an account of where the principals' prior beliefs come from. Moreover, the static models dominating the literature do not offer relevant information about the dynamic paths that lead to each equilibrium. This paper develops a dynamic version of statistical discrimination in which economic players' forward-looking behaviors determine the dynamic paths to each equilibrium. Defining ``Group Reputation'' as the objective information shared by principals regarding the average characteristics of agents belonging to each group, this study identifies groups as advantaged or disadvantaged, based on their initial reputation states, and provides conditions by which a group can switch from one reputation state to another. By understanding this dynamic structure of reputation evolution, we examine the strategy that well-coordinated principals may voluntarily utilize to maximize their profits, helping the group in the reputation trap to improve its skill investment rate. |
| Keywords: | Statistical Discrimination; Group Reputation; Reputation Trap; Forward-Looking Behavior |
| JEL: | H0 J60 J71 |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18765&r=evo |