Economics: Research Guide

Children early in the birth order get more parental care than later children. Does this significantly affect their life chances? An extensive genealogy of 428, 280 English people 1680-2024, with substantial sets of complete families, suggests that birth order had little effect on social outcomes either for contemporary outcomes, or in earlier centuries. For a small group of elite families in the nineteenth century and earlier, the oldest son was advantaged in terms of wealth, education, and occupational status. But even in this elite group, among later sons, birth order had no effect. We consider in the paper how the absence of birth order effects in England can be reconciled with reports of..

Two of the canonical approaches in regional studies are global production networks (GPNs) and evolutionary economic geography (EEG). Recent geopolitical and economic events have shown the importance of both theories in explaining regional economic change. Yet they remain discrete and separate, and there is now consensus that, together, they could explain more. A vibrant debate on the relationship between these two approaches is needed, starting with identifying unifying themes and areas of analytical difference, to develop a research agenda for future work which can better explain regional change.

Recent studies have shown that individuals’ behavior is sensitive to their perceptions of socially appropri-ate behavior. In this paper, I introduce a theory of injunctive norms in which individuals evaluate the social appropriateness of a given behavior using universalization reasoning. The theory allows one to compute the social appropriateness of any behavior without relying on individuals’ expectations, preferences, and actual behavior. Furthermore, it can be applied to a wide range of interactions and rationalize several observations unaccounted for by theories of social preferences. I test the theory’s predictions with evidence from past studies and new data from a lab experiment..

Experimental evidence on intertemporal choice has documented a preference for consumption smoothing that cannot be explained by discounted utility. We study a general class of dynamically consistent intertemporal dual-self preferences that accommodate a preference for consumption smoothing. We show that these general preferences have a simple and tractable structure. They are characterized by a gain-loss asymmetry where gains with respect to future utility are discounted differently than losses. As applications, first, we show that under the stationarity axiom, these preferences are convex or concave. Second, we show that dynamically consistent intertemporal Choquet expected utility coincide..

Largely forgotten today, Albert Galloway Keller was one of the foremost sociologists of his time. A brilliant scholar and a staunch disciple of William Graham Sumner, Keller spent his entire academic career at Yale, first as a student and then as Professor of the Science of Society, the chair formerly held by his mentor. The main coordinates of Keller’s sociology are to be found in his major work, Societal Evolution (1915), where he sought to apply Charles Darwin’s mechanism of variation, selection, and transmission to Sumner’s general scheme. Although Keller gave priority to social variables, his evolutionary sociology retained many elements of the typically Progressive Era preoccupat..

We study the developmental roots of cooperation in 929 young children, aged 3 to 6. In a unified experimental framework, we examine pre-registered hypotheses about which of three fundamental pillars of human cooperation – direct reciprocity, indirect reciprocity, and third-party punishment – emerges earliest and is more effective as a means to increase cooperation in a repeated prisoner’s dilemma game. We find that already children aged 3 act in a conditionally cooperative way. Yet, direct and indirect reciprocity do not increase overall cooperation rates beyond a control condition. Compared to the latter, punishment more than doubles cooperation rates, making it the mos..

This paper shows how to recover behavioral biases from revealed preference ranking implied by choices. The approach formalizes and unifies well-known behavioral models, including salience thinking, inattention, and logarithmic perception, thereby accounting for many well-documented choice puzzles. I show that this approach provides a way to filter out choice data from behavioral biases explaining rationality breaches before fitting parametric utility models. The approach is applied to workhorse data sets of the literature on choice under risk and scanner consumer choices.

We use novel data on nearly 6, 000 children and adolescents aged 6 to 16 that combine incentivized measures of social, time, and risk preferences with rich information on child behavior and family environment to study whether children’s economic preferences predict their behavior. Results from standard regression specifications demonstrate the predictive power of children’s preferences for their prosociality, educational achievement, risky behaviors, emotional health, and behavioral problems. In a second step, we add information on a family’s socio-economic status, family structure, religion, parental preferences and IQ, and parenting style to capture household environme..

Modeling subrational agents, such as humans or economic households, is inherently challenging due to the difficulty in calibrating reinforcement learning models or collecting data that involves human subjects. Existing work highlights the ability of Large Language Models (LLMs) to address complex reasoning tasks and mimic human communication, while simulation using LLMs as agents shows emergent social behaviors, potentially improving our comprehension of human conduct. In this paper, we propose to investigate the use of LLMs to generate synthetic human demonstrations, which are then used to learn subrational agent policies though Imitation Learning. We make an assumption that LLMs can be use..

On August 24, 2023, Japan controversially decided to discharge nuclear wastewater from the Fukushima Daiichi Nuclear Power Plant into the ocean, sparking intense domestic and global debates. This study uses evolutionary game theory to analyze the strategic dynamics between Japan, other countries, and the Japan Fisheries Association. By incorporating economic, legal, international aid, and environmental factors, the research identifies three evolutionarily stable strategies, analyzing them via numerical simulations. The focus is on Japan's shift from wastewater release to its cessation, exploring the myriad factors influencing this transition and their effects on stakeholders' decisions. Key ..

Economists modeled self-control problems in decisions of people with the time-inconsistence preferences model. They argued that the source of self-control problems could be uncertainty and temptation. This paper uses an experimental test offered to individuals instantaneous reward and future rewards to measure awareness of self-control problems in a tempting condition and also measure the effect of commitment and flexibility cost on their welfare. The quasi-hyperbolic discounting model with time discount factor and present bias at the same time was used for making a model for measuring awareness and choice reversal conditions. The test showed 66% awareness of self-control (partially naive be..

We use novel data on nearly 6, 000 children and adolescents aged 6 to 16 that combine incentivized measures of social, time, and risk preferences with rich information on child behavior and family environment to study whether children's economic preferences predict their behavior. Results from standard regression specifications demonstrate the predictive power of children's preferences for their prosociality, educational achievement, risky behaviors, emotional health, and behavioral problems. In a second step, we add information on a family's socio-economic status, family structure, religion, parental preferences and IQ, and parenting style to capture household environment. As a result, the ..

This research shows that secularization accounts for the remarkably early fertility decline in France. The demographic transition, a turning point in history and an essential condition for development, began in France more than a century earlier than in any other country. Why it happened so early is one of the ‘big questions of history’ because it challenges traditional explanations and because of data limitations. Using a novel dataset crowdsourced from publicly available genealogies, I comprehensively document the decline in fertility and its timing with a representative sample of the population. Drawing on a wide range of sources and data, I document an important process of s..

This paper studies the individual-level assumptions of the Malthusian model in pre-industrial Germany. By exploiting demographic records for 150, 000 individuals from the historical county of Wittgenstein, I test for status gradients in child mortality (the Malthusian positive check) and marital fertility (preventive check). While I find no evidence for a status gradient in child mortality, I find strong evidence for a status gradient in fertility. The richest families had, on average, one extra child when compared to their poorer compatriots. Turning to the mechanics of the preventive check, this appears to have been driven mostly by an earlier age of marriage amongst high status families. ..

Glowacki defines peace as harmonious relationships between groups maintained without the threat of violence, where groups can be anything from families to nation states. However, defining such contentious concepts like “peace” and “groups” is a difficult task, and we discuss the implications of Glowacki’s definitions for understanding intergroup relationships and their evolutionary history.

This paper examines an environment inhabited by self-interested individuals and unconditional cooperators. The individuals are randomly paired and engage in the Prisoner's Dilemma Game. Cooperation among players is incentivized by institutional capital, and selfish individuals incur a cost to identify situations where defection goes unpunished. In this environment, we explore the coevolution of types and institutional capital, with both the distribution of types and capital evolving through myopic best-response dynamics. The equilibria are shown to be Pareto-ranked. The main finding is that any equilibrium level of institutional capital exceeds the optimal amount in the long run. Thus, forwa..

This manuscript is a methodological work on the state of research using meta-analytic procedures in Economic Psychology, with a focus on the investigation of cross-cultural differences. We review published meta-analyses and introduce a new classification thereof by data source, describing how the different categories relate to the study of cross-cultural differences. We also discuss related opportunities and challenges, proposing a sustainable methodological approach that is then implemented in three case studies where we re-analyze data from published meta-analyses. In doing so, the relevance of culture as a determinant is explored by relating country-level cultural indicators to experiment..

Generative artificial intelligence (AI) is poised to reshape the way individuals communicate and interact. While this form of AI has the potential to efficiently make numerous human decisions, there is limited understanding of how individuals respond to its use in social interaction. In particular, it remains unclear how individuals engage with algorithms when the interaction entails consequences for other people. Here, we report the results of a large-scale pre-registered online experiment (N = 3, 552) indicating diminished fairness, trust, trustworthiness, cooperation, and coordination by human players in economic twoplayer games, when the decision of the interaction partner is taken over ..

More than 30 years of research has firmly established the vital role of trust in human organizations and relationships, but the underlying mechanisms by which people build, lose, and rebuild trust remains incompletely understood. We propose a mechanistic model of trust that is grounded in the modern neuroscience of decision making. Since trust requires anticipating the future actions of others, any mechanistic model must be built upon up-to-date theories on how the brain learns, represents, and processes information about the future within its decision-making systems. Contemporary neuroscience has revealed that decision making arises from multiple parallel systems that perform distinct, comp..

We study the dynamics of opinions in a setting where a leader has a payoff that depends on agents' beliefs and where agents derive psychological utility from their beliefs. Agents sample a signal that maximises their utility and then communicate with each other through a network formed by disjoint social groups. The leader has a choice to target a finite set of social groups with a specific signal to influence their beliefs and maximise his returns. Heterogeneity in agents' preferences allows us to analyse the evolution of opinions as a dynamical system with asymmetric forces. We apply our model to explain the emergence of hatred and the spread of racism in a society. We show that when infor..

Douglass North was central to the emergence of New Institutional Economics. Less well known are his later writings where he became interested in complexity theory. He attended the second economics complexity conference at the Santa Fe Institute in 1996 on how the economy functions as a complex adaptive system, and in his 2005 Understanding the Process of Economic Change incorporated this thinking into his argument that market systems depend on how institutions evolve. North also emphasized in the 2005 book the role belief played in evolutionary processes, and drew on cognitive science, especially the famous ‘scaffolding’ idea of cognitive scientist Andy Clark – the idea t..

In the latter half of the fourth millennium BC, our ancestors witnessed a remarkable transformation, progressing from simple agrarian villages to complex urban civilizations. In regions as far apart as the Nile Valley, Mesopotamia, Central Asia, and the Indus Valley, the first states appeared together with writing, cities with populations exceeding 10, 000, and unprecedented socio-economic inequalities. The cause of this “Urban Revolution” remains unclear. We present new empirical evidence suggesting that the discovery of bronze and the ensuing long-distance trade played a crucial role. Using novel panel data and 2SLS techniques, we demonstrate that trade corridors linking metal mines to..

The empirical evidence on the existence of social preferences—or lack thereof—is predominantly based on student samples. Yet, knowledge about whether these findings can be extended to the general population is still scarce. In this paper, we compare the distribution of social preferences in a student and in a representative general population sample. Using descriptive analysis and a rigorous clustering approach, we show that the distribution of the general population’s social preferences fundamentally differs from the students’ distribution. In the general population, three types emerge: an inequality averse, an altruistic, and a selfish type. In contrast, only the altruistic and the..

Collecting and analyzing panel data over the last four U.S. presidential elections, we study the drivers of self-reported happiness. We relate our empirical findings to existing models of elation, reference dependence, and belief formation. In addition to corroborating previous findings in the literature (hedonic asymmetry/hedonic loss aversion, hedonic adaptation and motivated beliefs), we provide novel results that extend the literature in four dimensions. First, happiness responds to changes relative to both the political status quo (i.e., the incumbent presidential party) and the expected electoral outcome, providing support for two major hypotheses regarding reference point formation. I..

There is an ongoing dialogue that explores how the Global Production Network and Evolutionary Economic Geography (EEG) literatures can make promising crossovers. This paper aims to contribute to this debate by outlining a theoretical-analytical approach to regional studies on Global Value Chains (GVCs). Building on the EEG literature on relatedness, economic complexity and regional diversification, this approach aims to develop a better understanding of the ability of regions to develop new and upgrade existing GVCs, and why regions may experience the loss or downgrading of existing GVCs. We present the features of this relatedness/complexity approach to GVCs, and discuss potential fields of..

This paper proposes a new approach to power in Game Theory. Cooperation and conflict are simulated with a mechanism of payoff alteration, called F-game. Using convex combinations of preferences, an F-game can measure players' attitude to cooperate. We can then define actual and potential power as special relations between different states of the system.

Using a unique international database on generalized trust - constructed from more than 1, 000 individual national surveys containing more than 1 million individual observations - covering 142 countries across the world for the 41-year time period from 1980 to 2020, this paper finds strong evidence that generalized trust at the country level is not stable over time. In fact, the paper finds a pronounced intertemporal variation of generalized trust over time in many countries across the globe. The paper's findings lend greater credibility to the theory of "experiential" trust over that of "cultural" trust, which leads the author to argue for using standard and dynamic panel estimation approac..

This paper examines the potential reinforcement of motivated beliefs when individuals with identical biases communicate. We propose a controlled online experiment that allows to manipulate belief biases and the communication environment. We find that communication, even among like-minded individuals, diminishes motivated beliefs if it takes place in an environment without previously declared external opinions. In the presence of external plural opinions, however, communication does not reduce but rather aggravates motivated beliefs. Our results indicate a potential drawback of the plurality of opinions-it may create communication environments wherein motivated beliefs not only persist but al..

Research spanning various disciplines underscores the significance of cultural diversity in facilitating cross-pollination of ideas, while diminishing social cohesiveness. Yet, the exploration of the impact of an equally intriguing dimension of diversity has remained uncharted: has the coalescence of diverse ancestral background in the formation of individuals' mindset shaped their productivity? Has a diverse mindset been central for individual's prosperity? This research advances the hypothesis that an intermediate level of diverse ancestral origins strikes a balance between the conflicting effects of cultural proximity and distinctiveness, creating an individual mindset that is conducive f..

Spontaneous norms, or simply norms, can be defined as rules of conduct that emerge without intentional design and in the absence of purposeful external coordination. While the law and economics scholarship has formally analyzed spontaneous norms, the analysis has typically been limited to scenarios where agents possess complete information about the interaction structure, including others' understanding of desirable and undesirable outcomes. In contrast, this paper examines spontaneous norms under the assumption of agent heterogeneity and private preferences. By employing a game-theoretical framework, the analysis reveals that norms' lifecycle can be divided into a formative phase and a long..