The committee for selecting the 2012 winners of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (remember, it is not an original Nobel Prize) seems to have done a better job than the Peace Prize Committee. Alvin Roth and Lloyd Shapely have been awarded the prize “for the theory of stable allocations and the practice of market design”, and they are worthy winners. There is plenty of commentary about their contribution in the media and blogosphere, so I’ll draw attention to just one element of Shapely’s work - the 1962 development of the Gale-Shapely algorithm with David Gale, and its application to marriage markets.

As I noted in a postscript to my last post, Quamrul Ashraf and Oded Galor have prepared a response [Update: the response is no longer online] to the Harvard academic critique of their paper on genetic diversity and economic development (I recommend having a look through the comments on that post, where Jade d’Alpoim Guedes, Nick Patterson (both authors of the critique), Henry Harpending and others continue the debate). Apart from the broader question of whether this work should even be undertaken, the Harvard critique focused on two issues: causation and the statistical foundations of the work.

A group of Harvard academics have penned a short response to Ashraf and Galor’s forthcoming American Economic Review paper, The Out of Africa Hypothesis, Human Genetic Diversity and Comparative Economic Development. Ashraf and Galor argue that economic development is affected by genetic diversity, which increases innovation but also increases conflict and distrust. This leads to an optimum “goldilocks” level of diversity, with genetically diverse Africans and less genetically diverse native Americans falling on either side of that optimum.

I recently came across a review of Robert Frank’s The Darwin Economy by Ted Bergstrom. Frank’s argument is largely based on the concept that a person is made worse off when they respond to someone else’s consumption choices, as it often turns into a winner takes all arms race. Bergstrom makes an important point that people may wish for someone else to increase their level of conspicuous consumption or competitive output.

While I find the occasional Ayn Rand (or Ayn Rand fan) bashing amusing, critics of Rand typically mis-characterise her writings (as many of her ardent fans also do). A Slate article by Eric Michael Johnson continues this tradition, where Johnson sets Rand up as the representative of selfish individualists against the altruists of hunter-gather tribes. Johnson’s altruistic case study is the Mbuti hunters of the Congo: The Mbuti employed long nets of twined liana bark to catch their prey, sometimes stretching the nets for 300 feet.

From a recent letter in Nature by Rand, Greene and Nowak: We find that across a range of experimental designs, subjects who reach their decisions more quickly are more cooperative. Furthermore, forcing subjects to decide quickly increases contributions, whereas instructing them to reflect and forcing them to decide slowly decreases contributions. Finally, an induction that primes subjects to trust their intuitions increases contributions compared with an induction that promotes greater reflection.

The Economist notes a new working paper (pdf) by Bloom and colleagues of the Harvard School of Public Health, which shows that a short-term implication of reduced fertility in poor countries may be increased inequality. As fertility declines initially among the richer residents of the country, they are the first to reap the demographic dividend. From The Economist: The three countries in the Harvard study which saw the largest declines in child dependency were Côte d’Ivoire (with a GDP per head in 2011 of $1,800), Namibia ($6,800) and Peru ($10,300).

Having given my thoughts on Haidt’s generally excellent The Righteous Mind in my last post, I want to turn to Haidt’s use of group selection in the last third of his book. The central themes of his book don’t rest on group selection (in my opinion), but Haidt is at the centre of the reemergence of group selection in the social sciences and his points are worth discussing. Haidt uses the more modern phrase “multilevel selection” in addition to “group selection” through the book.

I am going to give my thoughts on Jonathan Haidt’s The Righteous Mind: Why Good People Are Divided by Politics and Religion over two posts as I want to split the good from the bad (second post here). The first two-thirds and the conclusion of the book are excellent. However, slotted in the last third is Haidt’s take on group selection. His group selection argument deserves attention, but I don’t want to derail this post with a group selection critique, particularly when Haidt’s broader arguments do not rest on it.

One common explanation for fertility declines over the last 200 years is that parents have shifted to investing in quality of children, rather than quantity. What is often not made clear is that this quality-quantity trade-off has two dimensions. The first trade-off relates to socioeconomic status (SES), with greater numbers of children resulting in less investment in education and resource dilution. The second trade-off relates to fitness, as a short-term increase in children may reduce fertility in future generations.