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on Evolutionary Economics |
| By: | Daniel Friedman (University of California Santa Cruz Dept. of Economics); Nirvikar Singh (University of California, Santa Cruz) |
| Abstract: | We discuss how small group interactions overcome evolutionary problems that might otherwise erode vengefulness as a preference trait. The basic viability problem is that the fitness benefits of vengeance often do not cover its personal cost. Even when a sufficiently high level of vengefulness brings increased fitness, at lower levels, vengefulness has a negative fitness gradient. This leads to the threshold problem: how can vengefulness become established in the first place? If it somehow becomes established at a high level, vengefulness creates an attractive niche for cheap imitators, those who look like highly vengeful types but do not bear the costs. This is the mimicry problem, and unchecked it could eliminate vengeful traits. We show how within-group social norms can solve these problems even when encounters with outsiders are also important. |
| Date: | 2004–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:1017&r=evo |
| By: | Daniel Friedman (University of California Santa Cruz Dept. of Economics); Nirvikar Singh (University of California, Santa Cruz) |
| Abstract: | A preference for negative reciprocity is an important part of the human emotional repertoire. We model its role in sustaining cooperative behavior but highlight an intrinsic free-rider problem: the fitness benefits of negative reciprocity are dispersed throughout the entire group, but the fitness costs are borne personally. Evolutionary forces tend to unravel people's willingness to bear the personal cost of punishing culprits. In our model, the countervailing force that sustains negative reciprocity is a meme consisting of a group norm together with low-powered (and low-cost) group enforcement of the norm. The main result is that such memes coevolve with personal tastes and capacities so as to produce the optimal level of negative reciprocity. |
| Keywords: | Altruism, reciprocity, negative reciprocity, coevolution, |
| Date: | 2003–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:1028&r=evo |
| By: | Ondrej Rydval; Andreas Ortmann |
| Abstract: | We investigate experimentally the conjecture that loss avoidance solves the tension in stag-hunt games for which payoff dominance and risk dominance make conflicting predictions. Contrary to received textbook wisdom, money-losing outcomes do shift behavior, albeit not strongly, toward the payoff-dominant equilibrium. |
| Keywords: | Loss avoidance, Selection principle, Stag-hunt games, Coordination games, Experiment |
| JEL: | C72 C9 D9 D84 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp245&r=evo |
| By: | Susana Cabrera; C. Mónica Capra; Rosario Gómez |
| Abstract: | We report results of one-shot traveler’s dilemma game experiments to test the predictions of a model of introspection. The model describes a noisy out-of-equilibrium process by which players reach a decision of what to do in one-shot strategic interactions. To test the robustness of the model and to compare it to other models of introspection without noise, we introduce non-binding advice. Advice has the effect of coordinating all players’ beliefs onto a common strategy. Experimentally, advice is implemented by asking subjects who participated in a repeated traveler’s dilemma game to recommend an action to subjects playing one-shot games with identical parameters. In contrast to observations, models based on best-response dynamics would predict lower claims than the advised. We show that our model’s predictions with and without advice are consistent with the data. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0504&r=evo |
| By: | Gary Bornstein; Matthias Sutter; Tamar Kugler; Martin G. Kocher |
| Abstract: | We compared the behavior of groups and individuals in a two-person trust game. The first mover in this game, the sender, receives an endowment and can send any part of it to the responder; the amount sent is tripled, and the responder can then return to the sender any portion of the tripled sum. In a 2x2 design, the players in the roles of sender and responder were either individuals or groups of three players (who conducted face-to-face discussions to decide on a collective group strategy). We found that groups in the role of sender sent smaller amounts than individuals, and expected lower returns. In particular, groups sent nothing more often than individuals did (and were more likely to do so when the responder was another group). Groups and individuals in the role of responder returned on average the same fraction of the amount sent. Hence, we conclude that groups are less trusting than individuals, but just as trustworthy. |
| Keywords: | decision making, trust game, group behavior |
| JEL: | C92 |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-02&r=evo |
| By: | Tilman Becker; Michael Carter; Jörg Naeve |
| Abstract: | We analyze a one-shot experiment on the traveler's dilemma in which members of the Game Theory Society, were asked to submit both a (possibly mixed) strategy and their belief concerning the average strategy of their opponents. Very few entrants expect and play the unique Nash equilibrium, while we observe a fifth playing the cooperative solution of the game, i.e. a strictly dominated strategy. The experimental data suggest to analyze the game as one of incomplete information. Most strategies observed are in the support of its Bayesian Nash equilibria. A notable exception is the Nash equilibrium strategy of the original game. |
| Keywords: | Traveler's Dilemma; Experiment; Experts; Incomplete Information |
| JEL: | C91 C72 |
| URL: | http://d.repec.org/n?u=RePEc:hoh:hohdip:252&r=evo |
| By: | Edward Cartwright |
| Abstract: | We consider a dynamic model of conformity that permits both a conformist and a non-conformist equilibrium. We provide conditions under which conformity can 'invade' a population. More precisely, starting from a non-conformist equilibrium, we show that the conformity of an arbitrarily small proportion of the popultion can lead to the spread of conformism and the ultimate emergence of the conformist equilibrium. This occurs independently of whether or not the non-conformist equilibrium Pareto dominates the conformist equilibrium. |
| Keywords: | Conformity; best reply; coordination; norm. |
| JEL: | C70 C72 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0501&r=evo |