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Interethnic relations, informal trading networks, and social integration: imitation, habits, and social evolution

Author

Listed:
  • Bengt-Arne Wickström

    (Andrássy-Universität)

  • Janet Tai Landa

    (York University)

Abstract

The ethnically homogeneous middleman groups (EHMGs), which are informal trading networks, are ubiquitous in less-developed economies where the legal infrastructure for contract enforcement is not well developed. This paper develops a formal model of social interaction among members of the EHMG as well as in more general situations in a multi-ethnic or multi-cultural society consisting of identifiable ethnic or linguistic groups. Behavioral patterns are transmitted between generations and altered via imitation in social contacts. The model demonstrates how different discriminatory behavioral patterns can evolve and persist over time. One result is that the trust between such groups can increase due to a higher frequency of inter-group contacts. In concluding the paper, we speculate about how the model can be expanded to include changes in legal structures, especially contract law. This could lead to an increase in the trust between the different groups.

Suggested Citation

  • Bengt-Arne Wickström & Janet Tai Landa, 2018. "Interethnic relations, informal trading networks, and social integration: imitation, habits, and social evolution," Journal of Bioeconomics, Springer, vol. 20(3), pages 263-286, October.
    • Handle: RePEc:kap:jbioec:v:20:y:2018:i:3:d:10.1007_s10818-018-9278-y
    DOI: 10.1007/s10818-018-9278-y
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    References listed on IDEAS

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    1. Apesteguia, Jose & Huck, Steffen & Oechssler, Jorg, 2007. "Imitation--theory and experimental evidence," Journal of Economic Theory, Elsevier, vol. 136(1), pages 217-235, September.
    2. Janet Tai Landa, 2016. "Economic Success of Chinese Merchants in Southeast Asia," Springer Books, Springer, edition 1, number 978-3-642-54019-6, January.
    3. Manfred J. Holler & Bengt-Arne Wickstr÷m, 1999. "The Use of Scandals in the Progress of Society," Homo Oeconomicus, Institute of SocioEconomics, vol. 16, pages 97-110.
    4. Dennis J. Aigner & Glen G. Cain, 1977. "Statistical Theories of Discrimination in Labor Markets," ILR Review, Cornell University, ILR School, vol. 30(2), pages 175-187, January.
    5. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Chenjian Zhang, 2022. "Formal and informal institutional legacies and inward foreign direct investment into firms: Evidence from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1228-1256, August.
    2. Afiq bin Oslan, 2023. "Persistent and Self-Perpetuating Political Differences between Neighbouring Communities," Working Papers tax-mpg-rps-2023-19, Max Planck Institute for Tax Law and Public Finance.

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    More about this item

    Keywords

    Cultural transmission units; Ethnic networks; Identity; Imitation; Inter-ethnic interaction; Multi-cultural/multi-ethnic society; Trust;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • E71 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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