Understanding 'The Essential Fact about Capitalism': markets, competition and creative destruction

This paper examines two ways in which competition works in modern capitalist economies to improve productivity. The first is through incentives: encouraging improvements in technology, organisation and effort on the part of existing establishments and firms. The second is through selection: replacing less-productive with more productive establishments and firms, whether smoothly via the transfer of market shares from less to more productive firms, or roughly through the exit of some firms and the entry of others. We report evidence from the UK suggesting that selection is responsible for a large proportion of aggregate productivity growth in manufacturing, and that much of this is due in turn to selection between plants belonging to multi-plant firms. We also investigate whether the nature of the selection process varies across the business cycle and report evidence suggesting that it is less effective in booms and recessions. Finally, although in principle productivity catch-up by low-income countries ought to be easier than innovation at the frontier, in the absence of a well functioning competitive infrastructure (a predicament that characterises many poor countries), selection may be associated with much more turbulence and a lower rate of productivity growth than in relatively prosperous societies. We report results of a survey of firms in transition economies suggesting that, particularly in the former Soviet states (excluding the Baltic states), poor output and productivity performance has not been due to an unwillingness on the part of firms to change and adapt. On the contrary, there has been a great deal of restructuring, much new entry and large reallocations of output between firms; but such activity has been much more weakly associated with improved performance than we would expect in established market economies

Competition, restructuring and firm performance: evidence of an inverted-U relationship from a cross-country survey of firms in transition economies

This paper examines the importance of competition in the growth anddevelopment of firms. We draw on a survey of 3,300 firms in 25transition countries to shed light on the factors that influencerestructuring by firms and their subsequent performance. These datahave three main advantages over those used in previous work. First,they measure directly the degree of competition perceived by each firmin its principal market rather than attempting to infer this from marketdata as measured by statistical agencies. Second, the fact that transitioncountries have market structures inherited from the past avoids some ofthe endogeneity problems associated with measures of competition inmarket economies. Third, the breadth of cross-country variationprovides a method of dealing with the fact that firm-level measures ofthe external environment will not be independent of the firm?s ownperformance. We find evidence of a robust inverted-U effect ofcompetition on performance that is both statistically and economicallysignificant. This paper examines the importance of competition in the growth anddevelopment of firms. We draw on a survey of 3,300 firms in 25transition countries to shed light on the factors that influencerestructuring by firms and their subsequent performance. These datahave three main advantages over those used in previous work. First,they measure directly the degree of competition perceived by each firmin its principal market rather than attempting to infer this from marketdata as measured by statistical agencies. Second, the fact that transitioncountries have market structures inherited from the past avoids some ofthe endogeneity problems associated with measures of competition inmarket economies. Third, the breadth of cross-country variationprovides a method of dealing with the fact that firm-level measures ofthe external environment will not be independent of the firm?s ownperformance. We find evidence of a robust inverted-U effect ofcompetition on performance that is both statistically and economicallysignificant

Migration and The Equilibrium Prevalence of Infectious Diseases

This paper models how migration both influences and responds to differences in disease prevalence between cities and shows how the possibility of migration away from high-prevalence areas affects long-run steady state disease prevalence. We develop a dynamic framework where migration responds to the prevalence of disease, to the costs of migration and to the costs of living. The model explores how pressure for migration in response to differing equilibrium levels of disease prevalence generates differences in city characteristics such as land rents. Competition for scarce housing in low-prevalence areas can create segregation, with disease concentrated in high-prevalence ”sinks”. We show that policies affecting migration costs affect the steady-state disease prevalences across cities. In particular, migration can reduce steady-state disease incidence in low-prevalence areas while having no impact on prevalence in high-prevalence areas. This suggests that, in some circumstances, public health measures may need to avoid discouraging migration away from high disease areas

Escaping infectious diseases through migration? Quarantine measures under incomplete information about infection risk

This paper explores the implications for public policy of the fact that individuals have incomplete but private information about their exposure to infectious disease when they make migration decisions. In a 2-period model we study conditions under which the presence of quarantine measures may lead to inefficient outcomes by strengthening individuals' interest in migration to escape centres of disease and thereby imposing negative externalities on other uninfected individuals. We show first that when the disease has an epicentre, the marginal migrant imposes a net negative externality. Secondly, quarantine policies may sometimes encourage migration instead of discouraging it. Thirdly, even when they succeed in discouraging migration, quarantine policies may lower social welfare, and even increase overall disease incidence, if they go too far, thereby discouraging those intra-marginal migrants for whom private benefits exceed private costs by more than the negative externality they impose on others

Evolutionary Roots of Property Rights; The Natural and Cultural Nature of Human Cooperation

Debates about the role of natural and cultural selection in the development of prosocial, antisocial and socially neutral mechanisms and behavior raise questions that touch property rights, cooperation, and conflict. For example, some researchers suggest that cooperation and prosociality evolved by natural selection (Hamilton 1964, Trivers 1971, Axelrod and Hamilton 1981, De Waal 2013, 2014), while others claim that natural selection is insufficient for the evolution of cooperation, which required in addition cultural selection (Sterelny 2013, Bowles and Gintis 2003, Seabright 2013, Norenzayan 2013). Some scholars focus on the complexity and hierarchical nature of the evolution of cooperation as involving different tools associated with lower and the higher levels of competition (Nowak 2006, Okasha 2006); others suggest that humans genetically inherited heuristics that favor prosocial behavior such as generosity, forgiveness or altruistic punishment (Ridley 1996, Bowles and Gintis 2004, Rolls 2005). We argue these mechanisms are not genetically inherited; rather, they are features inherited through cultural selection. To support this view we invoke inclusive fitness theory, which states that individuals tend to maximize their inclusive fitness, rather than maximizing group fitness. We further reject the older notion of natural group selection - as well as more recent versions (West, Mouden, Gardner 2011) – which hold that natural selection favors cooperators within a group (Wynne-Edwards 1962). For Wynne-Edwards, group selection leads to group adaptations; the survival of individuals therefore depends on the survival of the group and a sharing of resources. Individuals who do not cooperate, who are selfish, face extinction due to rapid and over-exploitation of resources

Corrigendum: Visual surround suppression in schizophrenia

In the original article, we neglected to include the funder “European Research Council (ERC), ERC Consolidator Award” to Professor Sukhwinder S. Shergill. A correction has therefore been made to Acknowledgments and the correct statement appears below: “This work was funded by the Wellcome Trust. SS received funding from the European Research Council (ERC) Consolidator Award. The authors gratefully acknowledge the generous assistance of Cambian Healthcare in the data collection. The authors have no financial interests to disclose.” The authors apologize for this error and state that this does not change the scientific conclusions of the article in any way. The original article has been updated

Clonal karyotype evolution involving ring chromosome 1 with myelodysplastic syndrome subtype RAEB-t progressing into acute leukemia

s Karyotypic evolution is a well-known phenomenon in patients with malignant hernatological disorders during disease progression. We describe a 50-year-old male patient who had originally presented with pancytopenia in October 1992. The diagnosis of a myelodysplastic syndrome (MDS) FAB subtype RAEB-t was established in April 1993 by histological bone marrow (BM) examination, and therapy with low-dose cytosine arabinoside was initiated. In a phase of partial hernatological remission, cytogenetic assessment in August 1993 revealed a ring chromosome 1 in 13 of 21 metaphases beside BM cells with normal karyotypes {[}46,XY,r(1)(p35q31)/46,XY]. One month later, the patient progressed to an acute myeloid leukemia (AML), subtype M4 with 40% BM blasts and cytogenetic examination showed clonal evolution by the appearance of additional numerical aberrations in addition to the ring chromosome{[}46,XY,r(1),+8,-21/45,XY,r(1),+8,-21,-22/46, XY]. Intensive chemotherapy and radiotherapy was applied to induce remission in preparation for allogeneic bone marrow transplantation (BMT) from the patient's HLA-compatible son. After BMT, complete remission was clinically, hematologically and cytogenetically (normal male karyotype) confirmed. A complete hematopoietic chimerism was demonstrated. A relapse in January 1997 was successfully treated using donor lymphocyte infusion and donor peripheral blood stem cells (PB-SC) in combination with GM-CSF as immunostimulating agent in April 1997, and the patient's clinical condition remained stable as of January 2005. This is an interesting case of a patient with AML secondary to MDS. With the ring chromosome 1 we also describe a rare cytogenetic abnormality that predicted the poor prognosis of the patient, but the patient could be cured by adoptive immunotherapy and the application of donor's PB-SC. This case confirms the value of cytogenetic analysis in characterizing the malignant clone in hernatological neoplasias, the importance of controlling the quality of an induced remission and of the detection of a progress of the disease. Copyright (c) 2006 S. Karger AG, Basel

Robotic Pollination - Targeting kiwifruit flowers for commercial application

This paper contains the initial evaluation of a novel platform mounted robotic pollination system. Advancement in artificial pollination is an important step forward in agricultural sectors due to the global decline of natural pollinators. Robotic pollination allows for potentially autonomous, precision operation; however, background research suggested that prior development in the area has been sparse. The featured wet-application robotic pollination system was capable of detecting >70% of flowers whilst driving at a slow-pace through kiwifruit orchard rows. Over 80% of flowers were robotically pollinated

Comparative Approaches to Studying Strategy: Towards an Evolutionary Account of Primate Decision Making

How do primates, humans included, deal with novel problems that arise in interactions with other group members? Despite much research regarding how animals and humans solve social problems, few studies have utilized comparable procedures, outcomes, or measures across different species. Thus, it is difficult to piece together the evolution of decision making, including the roots from which human economic decision making emerged. Recently, a comparative body of decision making research has emerged, relying largely on the methodology of experimental economics in order to address these questions in a cross-species fashion. Experimental economics is an ideal method of inquiry for this approach. It is a well-developed method for distilling complex decision making involving multiple conspecifics whose decisions are contingent upon one another into a series of simple decision choices. This allows these decisions to be compared across species and contexts. In particular, our group has used this approach to investigate coordination in New World monkeys, Old World monkeys, and great apes (including humans), using identical methods. We find that in some cases there are remarkable continuities of outcome, as when some pairs in all species solved a coordination game, the Assurance game. On the other hand, we also find that these similarities in outcomes are likely driven by differences in underlying cognitive mechanisms. New World monkeys required exogenous information about their partners’ choices in order to solve the task, indicating that they were using a matching strategy. Old World monkeys, on the other hand, solved the task without exogenous cues, leading to investigations into what mechanisms may be underpinning their responses (e.g., reward maximization, strategy formation, etc.). Great apes showed a strong experience effect, with cognitively enriched apes following what appears to be a strategy. Finally, humans were able to solve the task with or without exogenous cues. However, when given the chance to do so, they incorporated an additional mechanism unavailable to the other primates - language - to coordinate outcomes with their partner. We discuss how these results inform not only comparative psychology, but also evolutionary psychology, as they provide an understanding of the evolution of human economic behavior, and the evolution of decision making more broadly

An evolutionary model explaining the Neolithic transition from egalitarianism to leadership and despotism.

The Neolithic was marked by a transition from small and relatively egalitarian groups, to much larger groups with increased stratification. But the dynamics of thisremain poorly understood. It is hard to see how despotism can arise without coercion, yet coercion could not easily have occurred in an egalitarian setting. Using a quanti-tative model of evolution in a patch-structured population, we demonstrate that the interaction between demographic and ecological factors can overcome this conundrum.We model the co-evolution of individual preferences for hierarchy alongside the degree of despotism of leaders, and the dispersal preferences of followers. We show that voluntary leadership without coercion can evolve in small groups, when leaders help to solve coordination problems related to resource production. An example is coordinating construction of an irrigation system. Our model predicts that the transition to larger despotic groups will then occur when: 1. surplus resources lead to demographicexpansion of groups, removing the viability of an acephalous niche in the same areaand so locking individuals into hierarchy; 2. high dispersal costs limit followers' abilityto escape a despot. Empirical evidence suggests that these conditions were likely metfor the first time during the subsistence intensification of the Neolithic