Working Paper: NBER ID: w29804
Authors: Nathan Nunn
Abstract: I provide a theoretically-guided discussion of the dynamics of human behavior, focusing on the importance of culture (socially-learned information) and tradition (transmission of culture across generations). Decision-making that relies on tradition can be an effective strategy and arises in equilibrium. While dynamically optimal, it generates static `mismatch.' When the world changes, since traits evolve slowly, they may not be beneficial in their new environment. I discuss how mismatch helps explain the world around us, presents special challenges and opportunities for policy, and provides important lessons for our future as a human species.
Keywords: Culture; Tradition; Decision-making; Human behavior; Social learning
JEL Codes: B5; B52; N00; O10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| traditionalists (T) (P30) | decision-making (D70) |
| previous generation's values (D15) | traditionalists (T) (P30) |
| decision-making based on tradition (D70) | effective strategy (L21) |
| proportion of traditionalists (J26) | expected payoff for traditionalists (D81) |
| higher values of tradition (Z13) | slower response to environmental changes (F64) |
| past traditions (B15) | current behaviors and beliefs (D91) |