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on Evolutionary Economics |
| By: | Ashraf, Quamrul H.; Galor, Oded; Klemp, Marc |
| Abstract: | This essay explores the deepest roots of economic development. It underscores the significance of evolutionary processes in shaping fundamental individual and cultural traits, such as time preference, risk and loss aversion, and predisposition towards child quality, that have contributed to technological progress, human-capital formation, and economic development. Moreover, it highlights the persistent mark of the exodus of Homo sapiens from Africa tens of thousands of years ago on the degree of interpersonal population diversity across the globe and examines the impact of this variation in diversity for comparative economic, cultural, and institutional development across countries, regions, and ethnic groups. |
| Keywords: | Comparative development; entrepreneurial spirit; human evolution; interpersonal diversity; loss aversion; natural selection; preference for child quality; the; Time Preference |
| JEL: | N10 N30 O11 Z10 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15345&r= |
| By: | Leone Walters; Carolyn Chisadza; Matthew Clance |
| Abstract: | This paper argues that contrary to previous ï¬ ndings, present-day education outcomes in Africa cannot be independently attributed to colonial or pre-colonial ethnic institutions. We propose that it is instead the complementarity or contention between colonial and precolonial institutions that result in education outcomes we observe today. Using geolocated DHS literacy outcomes for Cameroon, Cˆote d’Ivoire, Ghana, and Nigeria, our ï¬ ndings suggest that the positive effect of British rule on contemporary literacy is diminished in centralised ethnic regions. This paper contributes to debates on colonial and pre-colonial ethnic influences on African development, moving beyond country-level analysis. |
| Keywords: | Ethnic Institutions, Education, Africa |
| JEL: | I25 N17 Z13 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:850&r= |
| By: | Diaz, Lina (George Mason University); Houser, Daniel (George Mason University); Ifcher, John (Santa Clara University); Zarghamee, Homa (Barnard College) |
| Abstract: | In this paper, we use stated satisfaction to estimate social preferences: subjects report their satisfaction with payment-profiles that hold their own payment constant while varying another subject's payment. This approach yields significant support for the inequity aversion model of Fehr and Schmidt (1999). This model is among the most renowned in behavioral economics, positing a generalized aversion to inequality that is stronger when one's own payoff is lower–rather than higher–than others'; i.e., "envy" is stronger than "guilt." While aggregate-level estimates based on revealed preferences in laboratory games have supported the model, the assumption that guilt is stronger than envy is often violated at the individual level. This paradox may be due to limitations of the revealed-preference approach. An advantage of avoiding games is that eliciting stated satisfaction is relatively easy to implement and is less prone to being confounded with motives like reciprocity; also the absence of tradeoffs between own and others' payoffs is cognitively less demanding for subjects. Our unstructured approach does not limit the expression of social preferences to inequity aversion, yet our methodology yields significant support for it. At the individual level, 86% of subjects exhibit at least as strong envy as guilt, and 76% (65%) of subjects weakly (strongly) adhere to the model. Our individual-level estimates are robust to changing the value of one's own constant payment and to changing the range of the other subject's payments. Methodologically, eliciting satisfaction can be an easy-to-implement complement to choice-based preference-measures in contexts other than social preferences that are of interest to economists. |
| Keywords: | inequity aversion, social preferences, stated satisfaction, laboratory experiment |
| JEL: | C91 D31 D63 I31 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14347&r= |
| By: | Awad, Edmond; Cebrián, Manuel; Cuevas Rumin, Angel; Cuevas Rumin, Ruben; Desmet, Klaus; Martín, Ignacio; Obradovich, Nick; Ortuño-Ortín, Ignacio; Ozak, Omer; Rahwan, Iyad |
| Abstract: | Culture has played a pivotal role in human evolution. Yet, the ability of social scientists to study culture is limited by the currently available measurement instruments. Scholars of culture must regularly choose between scalable but sparse survey-based methods or restricted but rich ethnographic methods. Here, we demonstrate that massive online social networks can advance the study of human culture by providing quantitative, scalable, and high-resolution measurement of behaviorally revealed cultural values and preferences. We employ publicly available data across nearly 60,000 topic dimensions drawn from two billion Facebook users across 225 countries and territories. We first validate that cultural distances calculated from this measurement instrument correspond to traditional survey-based and objective measures of cross-national cultural differences. We then demonstrate that this expanded measure enables rich insight into the cultural landscape globally at previously impossible resolution. We analyze the importance of national borders in shaping culture, explore unique cultural markers that identify subnational population groups, and compare subnational divisiveness to gender divisiveness across countries. The global collection of massive data on human behavior provides a high-dimensional complement to traditional cultural metrics. Further, the granularity of the measure presents enormous promise to advance scholars' understanding of additional fundamental questions in the social sciences. The measure enables detailed investigation into the geopolitical stability of countries, social cleavages within both small and large-scale human groups, the integration of migrant populations, and the disaffection of certain population groups from the political process, among myriad other potential future applications. |
| Keywords: | Cultural distance; Culture; gender differences; identity; Regional Culture; Subnational Differences |
| JEL: | C80 F1 J1 O10 R10 Z10 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15315&r= |
| By: | Mackowiak, Bartosz Adam; Matejka, Filip; Wiederholt, Mirko |
| Abstract: | We review the recent literature on rational inattention, identify the main theoretical mechanisms, and explain how it helps us understand a variety of phenomena across fields of economics. The theory of rational inattention assumes that agents cannot process all available information, but they can choose which exact pieces of information to attend to. Several important results in economics have been built around imperfect information. Nowadays, many more forms of information than ever before are available due to new technologies, and yet we are able to digest little of it. Which form of imperfect information we possess and act upon is thus largely determined by which information we choose to attend to. These choices are driven by current economic conditions and imply behavior that features numerous empirically supported departures from standard models. Combining these insights about human limitations with the optimizing approach of neoclassical economics yields a new, generally applicable model. |
| Keywords: | Information Choice; rational inattention |
| JEL: | D8 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15408&r= |
| By: | Steve J. Bickley; Benno Torgler |
| Abstract: | In this chapter, we ask (conceptually and methodologically) what exactly is behavioural economics and what are its roots? And further, what may we have missed along the way? We argue that revisiting “classical” behavioural economics concepts and methods will benefit the wider behavioural economics program by questioning its yardstick approach to ‘Olympian’ rationality and optimisation and in doing so, exploring the ‘how’ and ‘why’ of economic behaviours (micro, meso, and macro) in greater detail and clarity. We also do the same for fields which share similar ontological and epistemological roots with “classical” behavioural economics. In particular, cognitive psychology, complexity theory, and artificial intelligence. By engaging in debate and investing thought into multiple layers of the ontology-epistemology- methodology, we look to engage in ‘deeper’ (and potentially more profound) scientific discussions. We also explore the utility and implications of mixed methods in behavioural economics research, policy, and practice. |
| Keywords: | Behavioural Economics; Cognitive Psychology; Complexity Theory; Artificial Intelligence |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2021-21&r= |
| By: | John B. Davis (Department of Economics Marquette University) |
| Abstract: | This paper examines how attribute substitution (AS), central to the psychology of choice and behavioral economic reasoning, can be understood when combined with counterfactual thinking (CFT), often called �what if� or �if only� thinking, and how their combination creates important opportunities for the seeing heterodox economics as a single research program alternative to mainstream economics. The first section of the paper discusses AS, CFT, and what a AS-CFT behavioral framework involves, and then emphasizes how this framework departs from fundamental assumptions mainstream rational choice theory employs. The second section reviews the foundations of behavioral thinking regarding AS, describes what it involves when it includes attention to CFT, distinguishes between more automatic and more reflective types of behavioral adjustment. It notes that heterodox economics has generally emphasized ecological rationality and bounded rationality in its use of AS. The third section then discusses how six prominent heterodox approaches can each be understood to draw on this combination of AS and CFT, and how this represents common ground for a shared critique of the mainstream economic approach. What distinguishes them is how they differ regarding the weight and emphasis placed on more automatic versus more reflective types of behavioral adjustment. The fourth section argues that within this shared framework these different heterodox approaches practice a division of labor in how they address different aspects of economic life understood in behavioral and counterfactual terms. |
| Keywords: | counterfactual thinking, attribute substitution, counterfactual thinking, adjustment behavior, automatic versus reflective, heterodox economics |
| JEL: | A12 A13 B41 D90 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:mrq:wpaper:2021-02&r= |