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on Evolutionary Economics |
| By: | Christian Cordes (University of Bremen) |
| Abstract: | This article reviews the most important transfers of this kind into evolutionary economics. It broadly differentiates between approaches that draw on an analogy construction to the biological sphere, those that make metaphorical use of Darwinian ideas, and avenues that are based on the fact that other forms of – cultural – evolution rest upon foundations laid before by natural selection. It is shown that an evolutionary approach within economics informed by insights from cognitive science, evolutionary biology, and anthropology contributes to more realistic models of human behavior in economic contexts. |
| Keywords: | evolutionary economics, human behavior, biological evolution, cultural evolution, generalized Darwinism, continuity hypothesis, Neo-Schumpeterians, American Institutionalism, competition |
| JEL: | B15 B25 B52 D03 Z1 |
| Date: | 2014–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2014-02&r=evo |
| By: | Charles Yuji Horioka (School of Economics, University of the Philippines Diliman) |
| Abstract: | This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded behavioral assumptions and technological innovation and that the goal of the evolutionary theory of household behavior is to improve upon the neoclassical theory of household behavior by replacing the neoclassical assumption of selfish utility maximization with bounded rationality and satisficing and by incorporating the reaction of households to the introduction of new goods and services. The paper concludes with a brief discussion of loss aversion and self-interest vs. altruism. |
| Keywords: | Altruism, altruistic bequest motive, behavioral assumptions, behavioral economics, bequest motives, bounded rationality, consumption behavior, creative destruction, destructive technologies, dynastic bequest motive, evolution, evolutionary economics |
| JEL: | A12 B15 B25 B52 D11 D91 E21 O31 O33 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201412&r=evo |
| By: | Enrico Spolaore; Romain Wacziarg |
| Abstract: | We investigate the historical dynamics of the decline in fertility in Europe and its relation to measures of cultural and ancestral distance. We test the hypothesis that the decline of fertility was associated with the diffusion of social and behavioral changes from France, in contrast with the spread of the Industrial Revolution, where England played a leading role. We argue that the diffusion of the fertility decline and the spread of industrialization followed different patterns because societies at different relative distances from the respective innovators (the French and the English) faced different barriers to imitation and adoption, and such barriers were lower for societies that were historically and culturally closer to the innovators. We provide a model of fertility choices in which the transition from higher to lower levels of fertility is the outcome of a process of social innovation and social influence, whereby late adopters observe and learn about the novel behaviors, norms and practices introduced by early adopters at the frontier. In the empirical analysis we study the determinants of marital fertility in a sample of European populations and regions from 1830 t0 1970, and successfully test our theoretical predictions using measures of genetic distance between European populations and a novel data set of ancestral linguistic distances between European regions. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0779&r=evo |
| By: | Dalton, Patricio S.; Ghosal, Sayantan |
| Abstract: | This paper examines whether the degree of confidence and overconfidence in one's ability is determined biologically. In articular, we study whether foetal testosterone exposure correlates with an incentive-compatible measure of confidence within an experimental setting. We find that men (rather than women) who were exposed to high testosterone levels in their mother's womb are less likely to overestimate their actual performance, which in turn helps them to gain higher monetary rewards. Men exposed to low prenatal testosterone levels, instead, set unrealistically high expectations which results in self-defeating behaviour. These results from the lab are able to reconcile hitherto disconnected evidence from the field, by providing a link between traders'overconfidence bias, long-term financial returns and prenatal testosterone exposure. |
| Keywords: | 2D:4D, testosterone, neuroeconomics, expectations, overcon dence, self-confidence, goals, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:edn:sirdps:564&r=evo |
| By: | Wolfgang Leininger; Hamed Moghadam |
| Abstract: | It is a very well-known result that in terms of evolutionary stability the long-run outcome of a Cournot oligopoly market with finitely many firms approaches the perfectly competitive Walrasian market outcome (Vega-Redondo, 1997). However, in this paper we show that an asymmetric structure in the cost functions of firms may change the long-run outcome. Contrary to Tanaka (1999) we show that the evolutionarily stable price in an asymmetric Cournot oligopoly needs not equal the marginal cost, it may rather equal a weighted average of (different) marginal cost. We apply a symmetrization technique in order to transform the game with asymmetric firms into a symmetric oligopoly game and then extend Schaffer’s definition (1988) of a finite population ESS (FPESS) to this setup. Moreover, we show that the FPESS in this game represents a stochastically stable state of an evolutionary process of imitation with experimentation. |
| Keywords: | Cournot oligopoly; asymmetry; finite population evolutionary stable strategy; stochastic stability |
| JEL: | C72 C73 D43 L13 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0497&r=evo |
| By: | Mark Ottoni-Wilhelm (Indiana University Purdue University-Indianapolis); Lise Vesterlund (University of Pittsburgh); Huan Xie (Concordia University) |
| Abstract: | The extant experimental design to investigate warm glow and altruism elicits a single measure of crowd-out. Not recognizing that impure altruism predicts crowd-out is a function of giving-by-others, this design's power to reject pure altruism varies with the level of giving-by-others, and it cannot identify the strength of warm glow and altruism preferences. These limitations are addressed with a new design that elicits crowd-out at a low and at a high level of giving-by-others. Consistent with impure altruism we find decreasing crowd-out as giving-by-others increases. However warm glow is weak in our experiment and altruism largely explains why people give. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:crd:wpaper:14002&r=evo |
| By: | Andreas Pondorfer; Toman Omar Mahmoud; Katrin Rehdanz; Ulrich Schmidt |
| Abstract: | We use a controlled experiment to analyze gender differences in risk preferences and stereotypes about risk preferences of men and women across two distinct island societies in the Pacific: the patrilineal Palawan in the Philippines and the matrilineal Teop in Papua New Guinea. We find no gender differences in actual risk preferences, but evidence for culture-specific stereotypes. Like men in Western societies, Palawan men overestimate women’s actual risk aversion. By contrast, Teop men underestimate women’s actual risk aversion. We argue that observed differences in stereotypes between the two societies are determined by the different social status of women |
| Keywords: | Gender roles, culture, stereotype, experiment, risk aversion |
| JEL: | C93 D81 J15 J16 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1957&r=evo |
| By: | Alejandro Francetich; David M. Kreps |
| Abstract: | The problemof choosing an optimal toolkit day after day,when there is uncertainty concerning the value of different tools that can only be resolved by carrying the tools, is a multi-armed bandit problem with nonindependent arms. Accordingly, except for very simple specifications, this optimization problem cannot (practically) be solved. Decision takers facing this problem presumably resort to decision heuristics, “sensible” rules fordeciding which tools to carry, based on past experience. In this paper, we examine and compare the performance of a variety of heuristics, some very simple and others inspired by the computer-science literature on these problems. Some asymptotic results are obtained, especially concerning the long-run outcomes of using the heuristics, hence these results indicate which heuristics do well when the discount factor is close to one. But our focus is on the relative performance of these heuristics for discount factors bounded away from one, which we study through simulation of the heuristics on a collection of test problems. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:524&r=evo |