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Imitation and evolutionary stability of poverty traps

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Journal of Bioeconomics Aims and scope

Abstract

This paper develops a bioeconomic model applying evolutionary game theory to the notion of poverty traps. We study the evolution of the social norm of being either a high-type or low-type in a dynamic environment where agents are driven by an imitative behavior. History matters because given initial conditions, agents imitate according to their current success in payoffs and the current profile of economic agents in the economy. We define a poverty trap as an evolutionarily stable strategic profile and steady state of the replicator dynamics. We show that in poor economies with a large fraction of low-type agents imitative strategies do not support a take-off into sustained growth. To achieve that take-off, society should subsidize critical parameters of the expected payoffs such that economic agents may change the initial conditions and the economy gets a critical mass of high-type economic agents, and so to overcome the poverty trap.

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Authors and Affiliations

  1. Faculty of Economics, Autonomous University of San Luis Potosi, 78263, San Luis Potosí SLP, Mexico

    Edgar J. Sánchez Carrera

  2. Department of Economics, University of Siena, 53100, Siena, Italy

    Edgar J. Sánchez Carrera

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  1. Edgar J. Sánchez Carrera
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Correspondence to Edgar J. Sánchez Carrera.

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Carrera, E.J.S. Imitation and evolutionary stability of poverty traps. J Bioecon 14, 1–20 (2012). https://doi.org/10.1007/s10818-011-9114-0

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  • DOI: https://doi.org/10.1007/s10818-011-9114-0

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