former Evolutionary Economics Group

The label "evolutionary" is currently used in economics to describe a variety of theories and topics. Far from inspiring the paradigmatic shift envisioned by some of the early proponents of evolutionary economics, the patchwork of theories and topics in this field demonstrates the need of an overarching interpretative frame. In other disciplines, the adoption of the Darwinian theory of evolution extended by hypotheses on cultural evolution has led to such a paradigm shift. This paper explores what can be accomplished by adopting that theory as an interpretative frame also for economics. Attention is directed in particular to the modalities of causal explanations that are germane to such a frame. The relevance of these modalities to the various thematic and theoretical specializations carrying the label "evolutionary" in economics is established to demonstrate the suitability as a common frame. Moreover, these modalities suggest a criterion on the basis of which evolutionary research can be distinguished from non-evolutionary research in economics. The case of institutional economics is used to outline some implications in an exemplary fashion. (PDF)

The paper provides an overview of major recent contributions in evolutionary economics. It starts of demonstrating that the pioneers of this approach such as Veblen, Schumpeter, Marshall and Hayek saw the economy as continuously changing and that this kind of "realism of perception" guides essentially also contemporary evolutionary economics. The economy is viewed as an evolving system of structured knowledge governing economic operations. Theoretically, a micro-meso-macro architecture is proposed, whereby meso (lacking in traditional economics) represents the theoretical key unit for analyzing the economy's structure and evolutionary change. Analytically, knowledge is specified on the basis of a unified generic rule approach and empirically-based rule taxonomy. A rule-based partial market theory highlighting the dynamic of demand and supply as a process of co-evolution of consumer rules, producer rules and product rules is serving as exemplar. As for paradigmatic-ontological foundations, a set of "empirical axioms" for evolutionary economic analysis is introduced at the outset. The final section on evolutionary economic policy indicates the practical relevance of the approach. (PDF)

Work and life satisfaction depend on a number of pecuniary and non-pecuniary factors at the workplace and determine these in turn. We analyze these causal linkages using a structural vector autoregression approach for a German sample of the working populace from 1984-2008. (PDF)

Ever since Darwin biologists have emphasised the commonalities between non-human and human species, while anthropologists have stressed the big difference between them. This paper not only endorses commonalities between species but takes them as a means to give extant phylogenetic differences a clear profile. It introduces the notion of universal culture, applicable to all phylogenies of culture-making species. Culture is defined as a system of socially generated and transmitted rules that allow their carrier cultural operations, economic operations taking centre stage in the study. Based on explorative induction – employing macaques washing sweet potatoes and 60,000-year-old ornamented ostrich eggs as exemplars – commonalities and differences between the cultures of non-human and human primates are highlighted. The hypothesis is advanced that non-human primates are capable of endosomatic culture, meaning that the origination of their culture is conditional upon a sensory nexus between the rule maker and the external referent; for instance, a tool rule is originated by inferring a tool function from the shape of a pre-existing stone. In contrast, humans can evolve exosomatic culture, as they possess the unique ability of imagination, which enables them to originate rules independent of any sensory nexus. Genetically equipped with the ability to use abstract language, humans can transmit rules both horizontally and vertically, not just as object-dependent templates but also as symbols. The possession of shared imagination is seen as representing the major proximate cause of the evolution of human culture, facilitating its distinctive economic operations. (PDF)

While the importance of personality for understanding differences in labor market outcomes has come to be increasingly appreciated by economic scholars, little research has so far focused on the question whether these measures also explain some of the individual heterogeneity in demand behavior. Using data from the British Household Panel Survey, this study provides evidence for the relationship between the Big Five personality traits and expenditures for food away from home and other leisure activities. Additionally, we assess the relationship between dimensions of personality and individual preferences in predicting expenditure on these categories. Results indicate that aspects of personality predict a non-negligible part of expenditure behavior, and that these effects are independent of the individual’s preference stock. Our results provide empirical support for approaches that include personality as a constraint into economic models of human behavior. (PDF)

Behavioral economics has shown that individuals sometimes make decisions that are not in their best interest. This insight has prompted calls for behaviorally-informed policy interventions popu-larized under the notion of "libertarian paternalism". This type of soft paternalism aims at helping individuals without reducing their freedom of choice. We highlight three problems of libertarian paternalism: the difficulty to detect what is in the best interest of an individual, the focus on freedom of choice at the expense of a focus on autonomy, and the neglect of the dynamic effects of libertarian paternalistic policy interventions. We present a form of soft paternalism called "autonomy-enhancing paternalism" that seeks to constructively remedy these problems. Autonomy-enhancing paternalism suggests using insights from subjective well-being research in order to determine what makes individuals better off. It imposes an additional con-straint on the set of permissible interventions highlighting the importance of autonomy in the sense of the capability to make critically reflected, i.e. autonomous, decisions. Finally, it acknowl-edges that behavioral interventions can change the strength of individual decision making anomalies over time as well as influence individual preference learning. We illustrate the differences between libertarian paternalism and autonomy-enhancing paternalism in a simple formal model in the context of optimal sin nudges. (PDF)

The greater awareness of the negative environmental and health-related externalities of the large-scale food industry is directly responsible for the diminished confidence of the quality of its products. Using the multi-level perspective on socio-technical transitions (Geels, 2004; 2010), I argue that the initial impetus for the emergence of mass production was the presence of threats to health and safety in the broader societal context. Rather than simply serving economic considerations, the scale and scientific expertise of mass production functioned as a credible signal due to its relationship to these threats. The declining health and safety of the food industry represents, however, a consequence of the changing relationship of scale and quality due to the emergence of new threats to health and safety. Scale as a signal of credibility is no longer sufficient to guarantee these qualities, however. Absent the incentives to undertake costly investments in quality production, the criteria of productivity and efficiency become duly emphasized to the detriment of health and safety. Hence, the continued emphasis on scale now represents a limitation to improving health and safety. Instead, further quality innovation demands the development of a costly signal appropriate to the extant social context. (PDF)

As a result of the disenchantment with traditional income-based measures of welfare, alternative welfare measures have gained increasing attention in recent years. Two of the most prominent measures of well-being come from subjective well-being research and the (objective) capability approach. Despite their promising features, both approaches have a number of weaknesses when considered on their own. This paper sets out to examine to what extent a fusion between both approaches can overcome the weaknesses of both individual approaches. It uses features of the capability framework to enrich what is basically a subjective well-being perspective. Key drawbacks of normative subjective well-being views can be overcome by focussing welfare assessments on "Subjective Well-being Capabilities" (SWC), i.e. focussing on the substantive opportunities of individuals to pursue and achieve happiness. (PDF)

It is argued that the explosive growth experienced in much of the World since the middle of the 19th Century is due to the exploitation and use of fossil fuels which, in turn, was made possible by capital good innovations that enabled this source of energy to be used effectively. Economic growth, it is argued, has been due to an autocatalytic co-evolution of energy use and the application of new knowledge relating to energy use. A simple 'evolutionary macroeconomic' model of economic growth is developed and tested using almost two centuries of British data. The empirical findings strongly support the hypothesis that growth has been due to the presence of a 'super-radical innovation diffusion process.' Also, the evidence suggests that large and sustained movements in energy prices have had a very significant long term role to play. The paper concludes with an assessment of the implications of the findings for the future prospects of economic growth in Britain and the possible lessons that can be learned about the future of the global economy. (PDF)