A critical note on the scientific conception of economics: claiming for a methodological pluralism

Opponents of mainstream economics have not yet called attention to the lack of in-depth examination of the general scientific conception of modern economics. However, economic science cannot consistently fulfil the epistemological and ontological requirements of the scientific standards underlying this conception. What can be scientifically recognized as true cannot be answered, neither through the actual ontological structure of the object of observation nor through a methodological demarcation. These limitations necessarily lead to the claim for both a pragmatic and a radical methodological pluralism.

Evolutionary Economics

Agent-Based Computational Economics: Overview and Brief History

Scientists seek to understand how real-world systems work. Models devised for scientific purposes must always simplify reality. However, ideally, a modeling approach should be flexible as well as logically rigorous; it should permit scientists to tailor model simplifications appropriately for specific purposes at hand. Modeling flexibility and logical rigor have been the two key goals motivating the development of Agent-based Computational Economics (ACE), a variant of agent-based modeling adhering to seven specific modeling principles. This perspective provides an overview of ACE and a brief history of its development.

Evolutionary Economics

Borderline Disorder: (De facto) Historical Ethnic Borders and Contemporary Conflict in Africa

We explore the effect of historical ethnic borders on contemporary non-civil conflict in Africa. Exploiting variations across artificial regions (i.e., grids of 50x50km) within an ethnicity's historical homeland, we document that both the intensive and extensive margins of contemporary conflict are concentrated close to historical ethnic borders. Following a theory-based instrumental variable approach, which generates a plausibly exogenous ethno-spatial partition of Africa, we find that grid cells with historical ethnic borders have 27 percentage points higher probability of conflict and 7.9 percentage points higher probability of being the initial location of a conflict. We uncover several ..

Evolutionary Economics

Global Value Chains from an Evolutionary Economic Geography perspective: a research agenda

The research agendas of Evolutionary Economic Geography (EEG) and Global Value Chains (GVC) have developed more or less independently from each other, with little interaction so far. This is unfortunate because both streams of literature have a lot to offer to each other. This paper explores how, looking at four strands in the GVC literature. Promising crossovers between EEG and the GVC literature are identified but also some missing links that need to be taken up in future research. These new research avenues, promoting the adoption of an evolutionary perspective on GVCs, are expected to enrich both literatures in mutual ways.

Evolutionary Economics

The Great Transition: Kuznets Facts for Family-Economists

The 20th century beheld a dramatic transformation of the family. Some Kuznets style facts regarding structural change in the family are presented. Over the course of the 20th century in the United States fertility declined, educational attainment waxed, housework fell, leisure increased, jobs shifted from blue to white collar, and marriage waned. These trends are also observed in the cross-country data. A model is developed, and then calibrated, to address the trends in the US data. The calibration procedure is closely connected to the underlying economic logic. Three drivers of the great transition are considered: neutral technological progress, skill-biased technological change, and drops ..

Evolutionary Economics

The roles of diversity, complexity, and relatedness in regional development – What does the occupational perspective add?

Contemporary research highlights the importance of relatedness, diversity, and complexity for regional economic development. However, few empirical studies simultaneously test the relevance of all these dimensions or examine how their importance varies across distinct spatial contexts. The literature also concentrates on explaining regional diversification, whereas we know less about how they affect economic and employment growth. In addition, most studies have examined industrial relatedness at the expense of the at least similarly crucial occupational dimension when studying knowledge-based regional development. The chapter discusses these issues and presents a study on how occupational di..

Evolutionary Economics

Do patents really foster innovation in the pharmaceutical sector? Results from an evolutionary, agent-based model

The role of the patent system in the pharmaceutical sector is highly debated also due to its strong public health implications. In this paper we develop an evolutionary, agent-based model of the pharmaceutical industry to explore the impact of different configurations of the patent system upon innovation and competition. The model is able to replicate the main stylized facts of the drug industry as emergent properties. We perform policy experiments to assess the impact of different IPR regimes changing the breadth and length of patents. Results suggest that enlarging the extent and duration of patents yields adverse effects in terms of innovation outcomes, as well as of market competition an..

Evolutionary Economics

AgriLOVE: agriculture, land-use and technical change in an evolutionary, agent-based model.

The paper focuses on the capital structure of firms in their early years of operation. Through the lens of Pecking Order Theory, we study how the pursuit of innovation influences the reliance of firms on different types of internal and external finance. Panel analyses of data on 7,394 German start-ups show that innovation activities are relevant predictors of the start-ups' revealed preferences for finance, and that the nature of these effects on the type and order of financing sources depends on the degree of information asymmetries specific to research and development activities, human capital endowments, and the market introduction of new products and processes.

Evolutionary Economics

AgriLOVE: agriculture, land-use and technical change in an evolutionary, agent-based model.

This paper presents a novel agent-based model of land use and technological change in the agricultural sector under environmental boundaries, finite available resources and changing land productivity. In particular, we model a spatially explicit economy populated by boundedly-rational farmers competing and innovating to fulfill an exogenous demand for food, while coping with a changing environment shaped by their production choices. Given the strong technological and environmental uncertainty, farmers learn and adaptively employ heuristics which guide their decisions on engaging in innovation and imitation activities, hiring workers, acquiring new farms, deforesting virgin areas and abandoni..

Evolutionary Economics

Preferences and Covid-19 Vaccination Intentions

This paper shows that prospect theory, extended to account for differences across individuals in their patience and their valuation of the vaccination as a common good can explain why more than 40% of the population has intent to reject the Covid-19 vaccination, as well as the differences in vaccination intentions across population subgroups. Indeed, prospect theory by over-weighting the side effect explains the reject of vaccination. This can be partially compensated by a high patience and/or a large valuation of the collective immunity. The calibrated version of our model, based on an original survey carried out on a representative sample of the adult population living in France allowing u..

Evolutionary Economics

Evolutionary Foundation for Heterogeneity in Risk Aversion

We examine evolutionary basis for risk aversion with respect to aggregate risk. We study populations in which agents face choices between aggregate risk and idiosyncratic risk. We show that the choices that maximize the long-run growth rate are induced by a heterogeneous population in which the least and most risk averse agents are indifferent between aggregate risk and obtaining its linear and harmonic mean for sure, respectively. Moreover, an approximately optimal behavior can be induced by a simple distribution according to which all agents have constant relative risk aversion, and the coefficient of relative risk aversion is uniformly distributed between zero and two.

Evolutionary Economics

The Cliometrics of Onomastics: Modeling Who's Who in Ancient Greece

In ancient Greece, people carried a single name, and some names were quite common, while others were very rare. If these names were used to distinguish people, why didn't everybody have a different name? Looking into the manner in which the ancient Greeks picked names, we develop an economic model for the existence of names, as a way of exchanging identification information. Considering different information frameworks, we justify the exchange of names in this context as the best system in order to promote cooperation. We then study the optimal choice of names in these conditions and show that the impact of strategic naming on the distribution of names works as an alteration of existing mean..

Evolutionary Economics

The content and structure of reputation domains across human societies: a view from the evolutionary social sciences

Reputations are an essential feature of human sociality and the evolution of cooperation and group living. Much scholarship has focused on reputations, yet typically on a narrow range of domains (e.g. prosociality and aggressiveness), usually in isolation. Humans can develop reputations, however, from any collective information. We conducted exploratory analyses on the content, distribution and structure of reputation domain diversity across cultures, using the Human Relations Area Files ethnographic database. After coding ethnographic texts on reputations from 153 cultures, we used hierarchical modelling, cluster analysis and text analysis to provide an empirical view of reputation domains ..

Evolutionary Economics

On the evolution of male competitiveness

Since a man's reproductive success depends on his ability to outcompete other men, male competitiveness may be expected to have been exposed to strong selective pressure throughout human history. Accordingly, the relatively low level of physical violence observed between men has been viewed as a puzzle. What could have limited the eagerness of men to out-compete each other? I study the evolution of male competitiveness in a model where men compete for both reproductive and productive resources. I show that high levels of male competitiveness are then consistent with evolution by natural selection if (a) the ecology is generous enough for men to supply little or no food to their children, (b)..

Evolutionary Economics

The emergence of cooperation from shared goals in the Systemic Sustainability Game of common pool resources

The sustainable use of common-pool resources (CPRs) is a major environmental governance challenge because of their possible over-exploitation. Research in this field has overlooked the feedback between user decisions and resource dynamics. Here we develop an online game to perform a set of experiments in which users of the same CPR decide on their individual harvesting rates, which in turn depend on the resource dynamics. We show that, if users share common goals, a high level of self-organized cooperation emerges, leading to long-term resource sustainability. Otherwise, selfish/individualistic behaviors lead to resource depletion ("Tragedy of the Commons"). To explain these results, we deve..

Evolutionary Economics

Norm Prevalence and Interdependence: Evidence from a Large-Scale Historical Survey of German speaking Villages

We use large-scale survey data of German speaking villages from the 1930's to investigate drivers of cooperation, gender, and religious norms. Through geographic cluster analysis, we show that inter-regional variation explains only little heterogeneity in norms. Villages in the same physical and institutional environment still maintain different norms. We argue that local differences in the structure of social relationships can explain intra-regional heterogeneity in norms. We focus on a community's ability to transmit and enforce norms to derive theoretical links between correlates of community social relationships and the number of norms it maintains (norm prevalence). Empirically we find ..

Evolutionary Economics

Evolutionary Foundation for Heterogeneity in Risk Aversion

We examine the evolutionary basis for risk aversion with respect to aggregate risk. We study populations in which agents face choices between aggregate risk and idiosyncratic risk. We show that the choices that maximize the long-run growth rate are induced by a heterogeneous population in which the least and most risk averse agents are indifferent between aggregate risk and obtaining its linear and harmonic mean for sure, respectively. Moreover, approximately optimal behavior can be induced by a simple distribution according to which all agents have constant relative risk aversion, and the coefficient of relative risk aversion is uniformly distributed between zero and two.

Evolutionary Economics

An Evolutionary Approach to Pollution Control in Competitive Markets

We consider a large population of firms in a market environment. The firms are divided into a finite set of types, with each type being characterized by a distinct private cost function. Moreover, the firms generate an external cost like pollution in the production process. As a result, the Nash equilibrium outcome is not socially optimal. We propose an evolutionary implementation mechanism to achieve the socially optimal outcome. In contrast to the classical Pigouvian pricing and the VCG mechanism, evolutionarily implementation does not require the planner to know or elicit any private information from firms. Hence, it is informationally parsimonious. By imposing a tax equal to the current ..

Evolutionary Economics

Knocking on Hell’s door. Dismantling hate with cultural consumption

How local cultural activities influence development and human behaviour is gaining growing attention in economic geography. Small scale experimental evidence shows that cultural consumption is effective in countering hate. This is crucial, as hate, in turn, has a negative influence on the socioeconomic performance of places. Still, little is known on this, outside few more qualitative case studies. This paper provides a quantitative measure of the impact of cultural consumption on hate events in the Italian NUTS3 regions. IV estimation using a unique longitudinal database, with georeferenced hate manifestations and a population-based measure for cultural consumption, shows that cultural cons..

Evolutionary Economics

Reciprocity or community: Different cultural pathways to cooperation and welfare

In a laboratory experiment we compare voluntary cooperation in Iceland and the US. We furthermore compare the associated thought processes across cultures. The two countries have similar economic performance, but survey measures show that they differ culturally. Our hypotheses are based on two such measures, The Inglehart cultural world map and the Knack and Keefers scale of civic attitudes toward large-scale societal functioning. We prime the participants with different social foci, emphasizing in one a narrow grouping and in the other a larger social unit. In each country we implement this using two different feedback treatments. Under group feedback, participants only know the contributio..

Evolutionary Economics

China, Europe, and the Great Divergence: Further Concerns about the Historical GDP Estimates for China

Broadberry, Guan and Li (2018) made estimates for China’s GDP per capita from 980 to 1840 in order to date the onset of the Great Divergence between China and western European economies. In response to Solar’s (2021) criticisms, they (2021) made some revisions to the estimates but largely dismissed most of Solar’s concerns, particularly those about their series for China’s population and its implications for dating the Great Divergence. This working paper assesses their revisions, reaffirms concerns about the level of their 1840 benchmark, and points out the weaknesses of the population figures in greater detail. The dating of the Great Divergence turns out to depend on the populatio..

Evolutionary Economics

On the empirical relevance of correlated equilibrium

Can an efficient correlated equilibrium emerge without any exogenous benevolent agent providing coordinating signals? Theoretical work in adaptive dynamics suggests a positive answer, which we test in a laboratory experiment. In the well-known Chicken game, we observe time average play that is close to the asymmetric pure Nash equilibrium in some treatments, and in other treatments we observe collusive play. In a game resembling rock-paper-scissors or matching pennies, we observe time average play close to a correlated equilibrium that is more efficient than the unique Nash equilibrium. Estimates and simulations of adaptive dynamics capture much of the observed regularities.

Evolutionary Economics

APOE4 is associated with elevated blood lipids and lower levels of innate immune biomarkers in a tropical Amerindian subsistence population

In post-industrial settings, apolipoprotein E4 (APOE4) is associated with increased cardiovascular and neurological disease risk. However, the majority of human evolutionary history occurred in environments with higher pathogenic diversity and low cardiovascular risk. We hypothesize that in high-pathogen and energy-limited contexts, the APOE4 allele confers benefits by reducing innate inflammation when uninfected, while maintaining higher lipid levels that buffer costs of immune activation during infection. Among Tsimane forager-farmers of Bolivia (N = 1266, 50% female), APOE4 is associated with 30% lower C-reactive protein, and higher total cholesterol and oxidized LDL. Blood lipids were ei..

Evolutionary Economics

Automation and labor market polarization in an evolutionary model with heterogeneous workers

The purpose of this paper is to investigate the mechanisms underlying the relationship between automation and labor market polarization. To do so, we build an agent-based model (ABM) in which workers, heterogeneous in nature and level of skills, interact endogenously on a decentralized labor market with firms producing goods requiring specific set of skills to realize the tasks necessary for the production process. The two scenarios considered, with and without automation, confirm that automation is indeed a key factor in polarizing the structure of skill demand and increasing wage inequality. This result emerges even without reverting to the routine-based technical change (RBTC) hypothesis ..

Evolutionary Economics

Women’s work and wages in the sixteenth-century and Sweden’s position in the “Little divergence”

We use a unique source from the Swedish royal demesnes to examine the work and relative wages of women in sixteenth century Sweden, an economic laggard in the Early Modern period. The source pertains to workers hired on yearly contracts, a type more representative for historical labour markets than day-labour on large construction sites, and allows us to observe directly the food consumed by workers. We speak to the debate on the “Little Divergence” within Europe as women’s work and gender differentials in pay is a key indicator of women’s relative autonomy and seen as a cause for the economic ascendency of the North Sea region during the period. We find small gender differentials am..

Evolutionary Economics

Competition in Transitional Processes: Polanyi and Schumpeter

We examine parallels and differences in the analyses of societal transition by Karl Polanyi and Joseph A. Schumpeter. We argue that although their understanding of historical processes differs – transformational-political vs. evolutionary-natural – the central mechanism of change they describe is the same. We identify three spheres essential to both authors’ works: the economic, the political and the socio-cultural sphere. Polanyi and Schumpeter describe an expansion of the economic sphere culminating in a subordination of the other parts of society. In capitalism this dominance stems from capitalism’s emergence as well as the concept of competition. The consequen..

Evolutionary Economics

A Tale of Two (and More) Altruists

We introduce a minimalist dynamical model of wealth evolution and wealth sharing among $N$ agents as a platform to compare the relative merits of altruism and individualism. In our model, the wealth of each agent independently evolves by diffusion. For a population of altruists, whenever any agent reaches zero wealth (that is, the agent goes bankrupt), the remaining wealth of the other $N-1$ agents is equally shared among all. The population is collectively defined to be bankrupt when its total wealth falls below a specified small threshold value. For individualists, each time an agent goes bankrupt (s)he is considered to be "dead" and no wealth redistribution occurs. We determine the evolut..

Evolutionary Economics

Herding, Warfare, and a Culture of Honor: Global Evidence

According to the widely known ‘culture of honor’ hypothesis from social psychology, traditional herding practices are believed to have generated a value system that is conducive to revenge-taking and violence. We test this idea at a global scale using a combination of ethnographic records, historical folklore information, global data on contemporary conflict events, and large-scale surveys. The data show systematic links between traditional herding practices and a culture of honor. First, the culture of pre-industrial societies that relied on animal herding emphasizes violence, punishment, and revenge-taking. Second, contemporary ethnolinguistic groups that historically subsisted more st..

Evolutionary Economics

Emergent Collaboration in Social Purpose Games

We study a class of non-cooperative aggregative games -- denoted as \emph{social purpose games} -- in which the payoffs depend separately on a player's own strategy (individual benefits) and on a function of the strategy profile which is common to all players (social benefits) weighted by an individual benefit parameter. This structure allows for an asymmetric assessment of the social benefit across players. We show that these games have a potential and we investigate its properties. We investigate the payoff structure and the uniqueness of Nash equilibria and social optima. Furthermore, following the literature on partial cooperation, we investigate the leadership of a single coalition of c..

Evolutionary Economics

How Do We Choose? Towards an Alternative Theory of Consumer Behavior

In this paper we explore how economists have addressed consumer behavior. We begin by analyzing the fundamental underpinning of neoclassical consumer behavior, utility maximization. We show how the contributions of behavioral economics, which prides itself on finding moments of nonconformity within the theory of consumer behavior, has put into question the validity of mainstream consumer choice modeling Accepting that the orthodox theory provides a poor model, the question remains: What alternative theories of consumer behavior exist? We discuss two alternative frameworks for consumer behavior: the endogenous preferences literature and the post-Keynesian notion of consumer choice. While both..

Evolutionary Economics