A vibrant research program in political economy today studies the persistent effects of historical “shocks,” such as colonial era institutional interventions like forced labor or missionary education. Many of these studies are great, showing careful attention to both historical detail and nuances of causal identification. A great example is a paper that Felipe Valencia Caicedo presented in our department seminar this week of the persistent effects of colonial era missionary education in the Guarani regions of Argentina, Brazil, and Paraguay [link]. (The bibliography to that paper lists many other really good examples.) That said, I am often left wanting more in terms of an explanation for such persistence. Such papers sometimes reference cultural transmission models [link], but in these cases, the papers often leave unclear why culture is not transmitted “horizontally,” for example through mimicry of success. Why doesn’t this happen? Evolutionary models of persistence typically reference “increasing returns” (and the mirror image, “traps”) [link]. In that spirit, what is the role of processes of agglomeration or more political in spirit, the accumulation of resources that can be used to defend privilege?
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[I]ncreasing the multiplier on amount sent by the “trustor” from two to three decreases the amount of money returned by the receiver by a little over one standard deviation. This means that, at least in part, second movers take into account the ‘‘size of the pie’’ by adjusting downwards what they return to the senders.
From a meta-analysis of trust game results by Johnson and Mislin (2011): ungated link.