43 research outputs found
How trade saved humanity from biological exclusion: An economic theory of Neanderthal extinction.
The solution to the Tullock rent-seeking game when R > 2: mixed-strategy equilibria and mean dissipation rates
In Tullock's rent-seeking model, the probability a player wins the game depends on expenditures raised to the power R. We show that a symmetric mixed-strategy Nash equilibrium exists when R>2, and that overdissipation of rents does not arise in any Nash equilibrium. We derive a tight lower bound on the level of rent dissipation that arises in a symmetric equilibrium when the strategy space is discrete, and show that full rent dissipation occurs when the strategy space is continuous. Our results are shown to be consistent with recent experimental evidence on the dissipation of rents.
An earlier version of this paper circulated under the title, No, Virginia, There is No Overdissipation of Rents. We are grateful to Dave Furth and Frans van Winden for stimulating conversations, and for comments provided by workshop participants from the CORE-ULB-KUL IUAP project, Purdue University, Pennsylvania State University, Rijksuniversiteit Limburg, and Washington State University. We also thank Max van de Sande Bakhuyzen and Ben Heijdra for useful discussions, and Geert Gielens for computational assistance. An earlier version of the paper was presented at the ESEM 1992 in Brussels and the Mid-West Mathematical Economics Conference in Pittsburgh. All three authors would like to thank CentER for its hospitality during the formative stages of the paper. The second author has also benefited from the financial support of the Katholieke Universitieit Leuven and the Jay N. Ross Young Faculty Scholar Award at Purdue University. The third author benefitted from visiting IGIER where part of the paper was written. The third author also benefitted from grant IUAP 26 of the Belgian Government
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Sympathy, tragedy and the morality of sentiment in Lessing's Laocoon
We propose a paleoeconomic coevolutionary explanation for the origin of speech in modern humans. The coevolutionary process, in which trade facilitates speech and speech facilitates trade, gives rise to multiple stable trajectories. While a `trade-speech¿ equilibrium is not an inevitable outcome for modern humans, we find it is a relatively likely scenario given our species evolved in Africa under climatic conditions supporting relatively high population densities. The origin of human speech is not independent of economic institutions¿the economics of early human trade can provide additional insight to help explain the physiological emergence of human speech
Experiments on Common Property Management
Common property resources are (renewable) natural resources where current excessive extraction reduces future resource availability, and the use of which is de facto restricted to a specific set of agents, such as inhabitants of a village or members of a community; think of community-owned forests, coastal fisheries, or water reserves used for irrigation purposes. Standard economic theory predicts that the shared use of a renewable natural resource results in the resource being overexploited. In the real world, some commonly owned resources are indeed severely degraded, but others are not. Identifying why community resource management is successful in some instances but not in others is difficult because of the many confounding mechanisms that are present in the real world. Therefore, economists use economic experiments to pretest the effectiveness of various institutions in sustaining cooperation in resource use such as punishments, rewards, and communication