LANGUAGES AND CULTURES: AN ECONOMIC AND EVOLUTIONARY ANALYSIS

Languages and cultures are mediums of transmitting information. Their value rests on their ability to lower variable costs in communication. Lower variable cost systems in general entail higher fixed costs. Each culture or language has evolved to adapt to the local environment. As environment changes, however, different cultural systems may fare differently under new conditions. An analytical economic theory is applied to study the co-evolution of languages, cultures and social systems. Many problems about the evolution and diffusion of cultures and languages and how they co-evolve with the social and economic systems can be understood in a very consistent way.culture, language, information, fixed and variable cost, thermodynamic theory of economics

Wealth Constraints and Self-Employment: Evidence from Birth Order

I revisit the question of whether entrepreneurs face liquidity constraints in business formation. The principle challenge is that wealth is correlated with unobserved ability, and adequate instruments are often difficult to identify. This paper uses the son’s birth order as an instrument for household wealth. The instrument would likely not be useful in Western data, but it is in many non-Western cultures where primogeniture remains important. I exploit the data available in the Korean Labor and Income Panel Study, and find evidence of liquidity constraints associated with self-employment in South Korea.Liquidity constraints, self-employment, instrument, birth order.

Selection and Serial Entrepreneurs

This paper develops and tests a model that explains entry into serial entrepreneurship and the performance of serial entrepreneurs as the result of selection on innate ability. The model supposes that agents establish businesses with imperfect information about their entrepreneurial ability and the profitability of business ideas. Agents continually observe signals with which they update their beliefs, and this process eventually determines their next business choice. Selection on ability induces a positive correlation between entrepreneurial experience (measured by previous business earnings and founding experience) and serial business formation, as well as its subsequent performance. The predictions in the model are tested using panel data from the NLSY79. The analysis permits a distinction to be made between selection on innate ability and learning by doing.Serial entrepreneurs, selection, ability, entrepreneurial experience, learning by doing.

Imperfect Market or Imperfect Theory: A Unified Analytical Theory of Production and Capital Structure of Firms

We present a unified analytical theory of production and capital structure of firms. It is extended from an analytical theory of production, whose main result is an analytical formula of variable cost of production as a function of fixed cost and uncertainty. Problems on capital structure can be naturally incorporated into the theory on production from a simple observation. Debt is fixed income for investors and hence fixed cost for issuing firms. The decision on capital structure is part of the decision process that determines the level of the fixed cost and variable cost of firms to achieve a high rate of return based on the understanding of current and future market conditions. The new theory offers a simple and parsimonious understanding to a broad range of empirical patterns documented in the literature. It reinforces the impression from other recent studies that puzzles in corporate finance often result not from “imperfect market” but rather from “imperfect theory”.capital structure, analytical theory, fixed cost, variable cost, imperfection

Unfolding Hidden Barriers by Active Enhanced Sampling

Collective variable (CV) or order parameter based enhanced sampling algorithms have achieved great success due to their ability to efficiently explore the rough potential energy landscapes of complex systems. However, the degeneracy of microscopic configurations, originating from the orthogonal space perpendicular to the CVs, is likely to shadow "hidden barriers" and greatly reduce the efficiency of CV-based sampling. Here we demonstrate that systematic machine learning CV, through enhanced sampling, can iteratively lift such degeneracies on the fly. We introduce an active learning scheme that consists of a parametric CV learner based on deep neural network and a CV-based enhanced sampler. Our active enhanced sampling (AES) algorithm is capable of identifying the least informative regions based on a historical sample, forming a positive feedback loop between the CV learner and sampler. This approach is able to globally preserve kinetic characteristics by incrementally enhancing both sample completeness and CV quality.Comment: 5 pages, 3 figure