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on Evolutionary Economics |
| By: | Azomahou T.T.; Opolot D. (UNU-MERIT) |
| Abstract: | This paper introduces epsilon-stability as a generalization of the concept of stochastic stability in learning and evolutionary game dynamics. An outcome of a model of stochastic evolutionary dynamics is said to be epsilon-stable in the long-run if for a given model of mistakes it maximizes its invariant distribution. We construct an efficient algorithm for computing epsilon-stable outcomes and provide conditions under which epsilon-stability can be approximated by stochastic stability. We also define and provide tighter bounds for contagion rate and metastability as measures for characterizing the short-run and medium-run behaviour of a typical stochastic evolutionary model. Keywords Stochastic evolution, network games, epsilon-stable sets, expected waiting time, metastability, contagion rate. |
| Keywords: | Stochastic and Dynamic Games; Evolutionary Games; Repeated Games; Information, Knowledge, and Uncertainty: General; |
| JEL: | C73 D80 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014036&r=evo |
| By: | Azomahou T.T.; Opolot D. (UNU-MERIT) |
| Abstract: | Learning and stochastic evolutionary models provide a useful framework for analyzing repeated interactions and experimentation among economic agents over time. They also provide sharp predictions about equilibrium selection when multiplicity exists. This paper defines three convergence measures, diffusion rate, expected waiting time and convergence rate, for characterizing the short-run, medium-run and long-run behavior of a typical model of stochastic evolution. We provide tighter bounds for each without making restrictive assumptions on the model and amount of noise as well as interaction structure. We demonstrate how they can be employed to characterize evolutionary dynamics for coordination games and strategic diffusion in networks. Application of our results to strategic diffusion gives insights on the role played by the network topology. For example we show how networks made up of cohesive subgroups speed up evolution between quasi-stable states while sparsely connected networks have the opposite effect of favoring almost global stability. Keywords Learning and evolution, networks, diffusion rate, convergence rate, expected waiting time |
| Keywords: | Stochastic and Dynamic Games; Evolutionary Games; Repeated Games; Information, Knowledge, and Uncertainty: General; |
| JEL: | C73 D80 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014035&r=evo |
| By: | Simon Gächter (School of Economics, University of Nottingham) |
| Abstract: | This chapter presents some insights from basic behavioural research on the role of human pro-social motivation to maintain social order. I argue that social order can be conceptualised as a public good game. Past attempts to explain social order typically relied on the assumption of selfish and rational agents ("homo economicus"). The last twenty years of research in behavioural and experimental economics have challenged this view. After presenting the most important findings of recent research on human pro-sociality I discuss the evidence on three pillars of the maintenance of social order. The first pillar is internalised norms of cooperation, sustained by emotions such as guilt and shame. The second pillar is the behaviour of other people who typically are "conditional cooperators" willing to cooperate if others do so as well. This motivation can sustain cooperation if enough people cooperate but can jeopardise social order if many others follow selfish inclinations. The third pillar are sanctions meted out to anyone who does not cooperate; ideally punishment can work as a mere threat without being executed much. The chapter also presents some evidence on the cross-cultural variability of some findings, in particular with regard to punishment behaviour. The chapter concludes with remarks on future research. |
| Keywords: | social order; social dilemma; pro-sociality; strong reciprocity; moral emotions; social norms; conditional cooperation; punishment; rule of law |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2014-02&r=evo |
| By: | Proto, Eugenio (University of Warwick and CAGE); Rustichini, Aldo (University of Minnesota) |
| Abstract: | Cooperating behavior may be fostered by personality traits re ecting either favorable inclination to others or willingness to comply with norms and rules. We test the relative importance of these two factors in an experiment where subjects provide real mental effort in two treatments with identical task, differing only by whether others' payment is affected. If the rst hypothesis is true, subjects reporting high Agreeableness score should put more effort; if the second is true, reporting higher Conscientiousness should predict more effort. We find experimental support for the second hypothesis but not for the first, as subjects reporting high Altruism do not behave consistently with this statement. |
| Keywords: | Personality Traits, Cooperation, Effort Provision |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:190&r=evo |
| By: | Fabrizio Adriani (School of Economics, University of Leicester); Silvia Sonderegger (Department of Economics, University of Nottingham) |
| Abstract: | We study Nature's trade-off when endowing people with the cognitive ability to distinguish between different time periods or different prizes. Our key premise is that cognitive ability is a scarce resource, to be deployed only where and when it really matters. We show that this simple insight can explain a number of observed anomalies: (i) time preference reversal, (ii) magnitude effects, (iii) cycles, (iv) interval length effects. An implication of our analysis is that, from an evolutionary perspective, people may be suffering from too much tendency to postpone (rather than to anticipate) consumption, turning upside-down existing interpretations of preference reversal. |
| Keywords: | Foundations of preferences, intertemporal choice, similarity judgments |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2014-06&r=evo |
| By: | Gill, David (University of Oxford); Prowse, Victoria L. (Cornell University) |
| Abstract: | In this paper we investigate how cognitive ability and character skills influence behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive ability: more cognitively able subjects choose numbers closer to equilibrium, converge more frequently to equilibrium play and earn more even as behavior approaches the equilibrium prediction. To understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning based on level-k reasoning. We find a systematic positive relationship between cognitive ability and levels; furthermore, the average level of more cognitively able subjects responds positively to the cognitive ability of their opponents, while the average level of less cognitively able subjects does not respond. Finally, we compare the influence of cognitive ability to that of character skills, and find that both cognition and personality affect behavior and learning. More agreeable and emotionally stable subjects perform better and learn faster, although the effect of cognitive ability on behavior is stronger than that of character skills. |
| Keywords: | cognitive ability, character skills, personality traits, level-k, bounded rationality, learning, convergence, non-equilibrium behavior, beauty contest, repeated games, structural modeling, theory of mind, intelligence, IQ, cognition, Raven test |
| JEL: | C92 C73 D83 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8236&r=evo |
| By: | Christoph HEINZEL (Structures et Marchés Agricoles, Ressources et Territoires) |
| Abstract: | Qualitative change is widely recognised as a defining feature of evolution. Schumpeter and Georgescu-Roegen put it at the centre of their methodological reasoning. I revisit important contributions of these two authors, paying attention to the immediate relationship of the major traits and treated issues between their works. With reference to qualitative change, their joint approach provides answers as to (i) why an evolutionary analysis has to necessarily apply a varied less formal set of methods as compared with modern static and dynamic analysis, (ii) why an evolutionary analysis is a necessary component of economic analysis and (iii) how it can be seen as complementary to modern statics and dynamics. They argued for methodological pluralism, where the choice of methods shall derive from close observation of the subject matter under scrutiny. Georgescu-Roegen’s reasoning shows the necessity of interdisciplinary contributions and the interrelation of economic activity and environmental impact and constraints, putting environmental issues immediately on the evolutionary economics agenda. The paper provides a new ground for evaluating Georgescu-Roegen’s own and their joint contribution to modern research. |
| Keywords: | Schumpeter, Georgescu-Roegen, Qualitative change, Evolution, Evolutionary methodology, changement qualitatif, économie évolutionnisteenvironnement, activité économique |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:inr:wpaper:190153&r=evo |
| By: | Eric B. Schneider (University of Sussex) |
| Abstract: | This paper presents a new adaptive framework for understanding children’s growth in the past. Drawing upon the recent work of Gluckman and Hanson (2006) and their co-authors on adaptive responses in relation to growth, I present three prenatal and three postnatal adaptive mechanisms that affect the growth patterns of children. The most novel adaptive response to the historical literature is the prenatal predictive adaptive response where the foetus develops assuming that the postnatal environment will closely match prenatal conditions. Thus, the metabolism and growth trajectory of a child is programmed during the prenatal period: children experiencing good conditions in utero would have a higher metabolism and growth trajectory than their counterparts facing poor conditions. Having discussed the framework and other responses in detail, I then use it to reinterpret the growth pattern of American slaves (Steckel, 1979, 1986). I argue that the mismatch between relatively good conditions in utero and absolutely appalling conditions in infancy and early childhood led slave children to become incredibly stunted by age three or four. However, after this age, slave children experienced rapid catch-up growth, first because their immune systems had become more developed and had adapted to the poor disease environment and later because their diet improved tremendously and hookworm exposure was reduced when they entered the labour force around age ten. Thus, American slave children were able to experience rapid catch-up growth because they were prenatally programmed for a higher metabolism and growth trajectory. The paper concludes by setting out some stylized facts about children’s growth in the past and pointing toward areas of future research. |
| Date: | 2014–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:esohwp:_130&r=evo |
| By: | Vidal-Robert, Jordi (University of Warwick and CAGE) |
| Abstract: | Using a newly collected dataset on inquisitorial activity for seven regions, fourteen provinces and 947 municipalities, I analyze the long-term economic consequences of the Spanish Inquisition (1478-1834). I show that inquisitorial activity is negatively associated to regional and provincial economic growth (an increase of a thousand inquisitorial trials is associated with 3% to 5% lower urbanization rates). At the municipal level, I find that municipalities affected by the Inquisition experienced an annual population growth rate 0.11% lower than their counterparts. This result is robust when controlling for alternative explanatory factors, such as pre-existent religiosity and proxies for trade activity. I explore three channels through which the Inquisition may have had an impact on economic outcomes. While inquisitorial activity is not linked to levels of trust or social polarization, I find it is negatively associated with the adoption of new technologies and the creation of municipal centres of cultural transmission. |
| Keywords: | Spanish Inquisition, polarization |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:192&r=evo |