TITLE:
Social Capital, Perceptions and Economic Performance
AUTHORS:
José A. Hernández, César Guerrero-Luchtenberg
KEYWORDS:
Psychological Equilibrium, Belief-Dependent Behavior, Evolutionary Games, Replicator Dynamics, Economic Development
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.2,
April
22,
2016
ABSTRACT: This paper describes how social capital emerges, relates to economic
performance and evolves in the long run. Using the concept of psychological equilibrium,
two types of individuals are generated in the population regarding their
willingness to cooperate. We propose an evolutionary (learning) process over
those types driven by the total payoffs of the psychological game, and provide
a complete description of its dynamics. Macro-perceptions, defined as the
individual perception of how cooperative the society is as a whole, are key to
explain convergence to the full social capital state in the long run.