nep-cbe New Economics Papers
on Cognitive and Behavioural Economics
Issue of 2005‒02‒27
five papers chosen by
Marco Novarese
Universita del Piemonte Orientale

  1. The Nature and Units of Social Selection. By G. Hodgson; T. Knudsen
  2. Useful Knowledge as an Evolving System: the view from Economic History. By J. Mokyr
  3. The Effect of Group Identity in an Investment Game By Werner Güth; Matteo Ploner; Vittoria Levati
  4. The Impact of Price Disclosure on Dynamic Shopping Decisions By Dellaert,Benedict G.C.; Golounov,Vladislav Y.; Prabhu,Jaideep
  5. On the Early Holocene: Foraging to Early Agriculture By Nicolas Marceau; Gordon Myers

  1. By: G. Hodgson; T. Knudsen
    Abstract: On the basis of the technical definition of selection developed by George Price (1995), we describe two forms of selection that commonly occur at the social level, subset selection and generative selection. Both forms of selection are abstract and general, and therefore also incomplete; both leave aside the question of explaining the selection criterion and why entities possess stable traits. However, an important difference between the two kinds of selection is that generative selection can accommodate an explanation of how new variation is created, while subset selection cannot. An evolutionary process involving repeated cycles of generative selection can, in principle, continue indefinitely because imperfect replication generates new variation along the way, whereas subset selection reduces variation and eventually grinds to a halt. Even if the two kinds of selection examined here are very different, they share a number of features. First, neither subset selection nor generative selection implies improvement. Neither kind of selection necessarily lead to efficiency or imply systematic outcomes. Second, both subset selection and generative selection can lead to extremely rapid effects in a social population. Third, in the social domain, both generative selection and subset selection involve choice and preference. Neither form of selection necessarily excludes intentionality. In concluding the article, we single out a challenge for future research in identifying the role of various units of culture in selection processes and the multiple levels at which social selection processes take place.
    Keywords: Subset selection, generative selection, generalized selection, Price equation
    JEL: B25 B52 D20 D83 L20
  2. By: J. Mokyr
    Abstract: The process of modern growth is different from the kind of growth experienced in Europe and the Orient before 1800 in that it is sustained. Whereas in the premodern past, growth spurts would always run into negative feedback, no such ceiling seems to have been limiting the economic expansion of the past two centuries. The enigma of modern growth has led to a great deal of modeling and speculation amongst economists interested in the topic. One important strand in the literature has been that the Malthusian models that provided much of the negative feedback before 1800, have been short-circuited by the desire and ability of a growing number of individuals to reduce their fertility. Another has been institutional change, which has reduced opportunistic behavior and uncertainty. What has not been stressed enough is that the new technology was made possible by ever increasing "useful knowledge" as Kuznets called it. The sources of this growth in knowledge, surprisingly, have not been fully analyzed. How does "useful knowledge" emerge and develop? Why does it occur in one society and not another, at one time, and why does it take the form it does? This paper examines the details of how new knowledge is created by various combinations of luck, trial and error, inference, and experiment. To analyze the history of useful knowledge, an evolutionary framework to the economic history of useful knowledge is employed.
  3. By: Werner Güth; Matteo Ploner; Vittoria Levati
    Abstract: The present research experimentally examines the influence of group identity on trust behavior in an investment game. In one treatment, group identity is manipulated only through the creation of artificial (minimal) groups. In other treatments group members are additionally related by outcome interdependence established in a prior public goods game. In moving from the standard investment game (where no group identity is prompted) to minimal group identity to two-dimensional group identity, we find no significant differences in trust decisions. However, trust is significantly positively correlated with contribution decisions. This suggests that cooperative attitudes are idiosyncratic preferences, which are not affected by the creation of an arbitrary group identity.
    Keywords: trust, group identity, outcome interdependence, experiment
  4. By: Dellaert,Benedict G.C.; Golounov,Vladislav Y.; Prabhu,Jaideep (METEOR)
    Abstract: A potentially powerful way to assist consumers in making dynamic shopping decisions is to disclose price information to them before they shop, for example by posting prices on the Internet. This paper addresses the differential impact of disclosing either only current, or both current and future prices, on consumer shopping decisions in multi-period tasks involving multiple product purchases. In the context of an Internet-based experiment, we find that consumer expenditure deviates more strongly from that of a normative model when both current and future prices are disclosed than if only current prices are disclosed. We investigate the behavioral effects underlying this finding by estimating a model that allows for variations in consumer discounting, strength of store price format preferences, as well as choice consistency between different price disclosure conditions.
    Keywords: marketing ;
    Date: 2005
  5. By: Nicolas Marceau; Gordon Myers
    Abstract: We consider a world in which the mode of food production, foraging or agriculture, is endogenous, and in which technology grows exogenously. Within a model of coalition formation, we allow individuals to rationally form cooperative communities (bands) of foragers or farmers. At the lowest levels of technology, equilibrium entails the grand coalition of foragers, a cooperative structure which avoids over-exploitation of the environment. But at a critical state of technology, the cooperative structure breaks down through an individually rational splintering of the band. At this stage, there can be an increase in work and through the over-exploitation of the environment, a food crisis. In the end, technological growth may lead to a one-way transition from foraging to agriculture.
    Keywords: Foraging, Agriculture, Transition, Coalition Formation, Cooperation
    JEL: N50 O13
    Date: 2005

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