scholarly journals Persistence and Change in Culture and Institutions under Autarchy, Trade, and Factor Mobility

2017 ◽  
Vol 9 (4) ◽  
pp. 245-276 ◽  
Author(s):  
Marianna Belloc ◽  
Samuel Bowles
Keyword(s):  
Social Norms ◽  
Opposite Effect ◽  
Evolutionary Model ◽  
Gains From Trade ◽  
Factor Mobility ◽  
Endogenous Preferences ◽  
Factor Endowments ◽  
International Factor Mobility ◽  
The Cost ◽  
Pareto Improving

Differences among nations in culture (preferences including social norms) and institutions (contracts) may result in specialization and gains from trade even in the absence of exogenous differences in factor endowments or technologies. Goods differ in the kinds of contracts that are appropriate for their production, and so strategic complementarities between contracts and social norms may result in a multiplicity of cultural-institutional equilibria. The resulting country differences in culture and institutions provide the basis for comparative advantage. In our evolutionary model of endogenous preferences and institutions, transitions among persistent cultural-institutional configurations occur as a result of decentralized and uncoordinated contractual or behavioral innovations by employers or employees. We show that the gains from trade raise the cost of deviations from the prevailing culture and institutions. As a result, trade liberalization impedes decentralized transitions, even to Pareto-improving cultural-institutional configurations. International factor mobility has the opposite effect. (JEL D02, D86, F11, F21, J41, O43, Z13)

scholarly journals Competing Conventions with Costly Information Acquisition

Games ◽  
2021 ◽  
Vol 12 (3) ◽  
pp. 53
Author(s):  
Roberto Rozzi
Keyword(s):  
Information Acquisition ◽  
Evolutionary Model ◽  
Equilibrium Selection ◽  
The Other ◽  
Group Interactions ◽  
Social Coordination ◽  
Long Run ◽  
Stochastic Stability Analysis ◽  
The Stability ◽  
The Cost

We consider an evolutionary model of social coordination in a 2 × 2 game where two groups of players prefer to coordinate on different actions. Players can pay a cost to learn their opponent’s group: if they pay it, they can condition their actions concerning the groups. We assess the stability of outcomes in the long run using stochastic stability analysis. We find that three elements matter for the equilibrium selection: the group size, the strength of preferences, and the information’s cost. If the cost is too high, players never learn the group of their opponents in the long run. If one group is stronger in preferences for its favorite action than the other, or its size is sufficiently large compared to the other group, every player plays that group’s favorite action. If both groups are strong enough in preferences, or if none of the groups’ sizes is large enough, players play their favorite actions and miscoordinate in inter-group interactions. Lower levels of the cost favor coordination. Indeed, when the cost is low, in inside-group interactions, players always coordinate on their favorite action, while in inter-group interactions, they coordinate on the favorite action of the group that is stronger in preferences or large enough.

scholarly journals Interventions with Sticky Social Norms: A Critique

2021 ◽  
Author(s):  
Rohan Dutta ◽  
David K Levine ◽  
Salvatore Modica
Keyword(s):  
Social Norms ◽  
Public Goods ◽  
Case Studies ◽  
General Model ◽  
Negative Externality ◽  
Pigouvian Tax ◽  
Policy Interventions ◽  
The Cost ◽  
Unexpected Consequences

Abstract We study the consequences of policy interventions when social norms are endogenous but costly to change. In our environment a group faces a negative externality that it partially mitigates through incentives in the form of punishments. In this setting policy interventions can have unexpected consequences. The most striking is that when the cost of bargaining is high introducing a Pigouvian tax can increase output - yet in doing so increase welfare. An observer who saw that an increase in a Pigouvian tax raised output might wrongly conclude that this harmed welfare and that a larger tax increase would also raise output. This counter-intuitive impact on output is demonstrated theoretically for a general model and found in case studies for public goods subsidies and cartels.

scholarly journals Elite collective agency and the state

2019 ◽  
Vol 16 (1) ◽  
pp. 13-24 ◽  
Author(s):  
Korkut Alp Ertürk
Keyword(s):  
Opposite Effect ◽  
The State ◽  
The Other ◽  
Collective Agency ◽  
Collective Interest ◽  
Other Hand ◽  
The Cost ◽  
Basic Insight

AbstractThe paper explores how elites can develop capacity for collective agency through coordination.. The challenge for elites is to simultaneously deter the state from abusing power while at the same time relying on it to discipline defectors in their midst..The basic insight holds that the credibility of the state's threats depends on the cost of carrying them out, which elites can control. The elites can coordinate by being compliant when the ruler's threats serve their collective interest, which by reducing the cost of carrying them out make them more credible. On the other hand, their coordinated non-compliance has the opposite effect...

International factor mobility and national advantage

1983 ◽  
Vol 14 (1-2) ◽  
pp. 103-114 ◽  
Author(s):  
Guillermo Calvo ◽  
Stanislaw Wellisz
Keyword(s):  
Factor Mobility ◽  
International Factor Mobility
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