Wednesday, July 18, 2012

Conventions and traditions

Conventions and traditions are information contained in history. They distill the experiences of millions of human beings over millennia of time.

We imitate what successful people do, even though under some circumstances sucess of other people are not imitable: they might be facing a different problem, or different constraints.

The evolutionary process dictates that parents care for their children, otherwise the children will have an evolutionary disadvantage compared to those whose parents care for their children. Hence the well-being of the children will be  present in the patents utility function.

Heterogeneity can appear on the weight of children's well-beings in parents' utility function.

Distinction between ex ante and ex post. Conventions that are playing an important role in one country may be detrimental to the other if we simply want to enforce them.

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