nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2005‒06‒27
four papers chosen by
Matthew Baker
US Naval Academy, USA

  1. The Evolution of Our Preferences: Evidence from Capuchin-Monkey Trading Behavior By M. Keith Chen; Venkat Lakshminarayanan; Laurie Santos
  2. Local and Global Interactions in an Evolutionary Resource Game By Joëlle Noailly; Jeroen C.J.M. van den Bergh; Cees A. Withagen
  3. Spatial Evolution of Social Norms in a Common-Pool Resource Game By Joëlle Noailly; Cees A. Withagen; Jeroen C.J.M. van den Bergh
  4. Do Parents Favor their Biological Offspring over Adopted Orphans? Theory and Evidence from Tanzania By Papa Seck

  1. By: M. Keith Chen (School of Management, Yale University); Venkat Lakshminarayanan; Laurie Santos
    Abstract: Behavioral economics has demonstrated systematic decision-making biases in both lab and field data. But are these biases learned or innate? We investigate this question using experiments on a novel set of subjects — capuchin monkeys. By introducing a fiat currency and trade to a capuchin colony, we are able to recover their preferences over a wide range of goods and risky choices. We show that standard price theory does a remarkably good job of describing capuchin purchasing behavior; capuchin monkeys react rationally to both price and wealth shocks. However, when capuchins are faced with more complex choices including risky gambles, they display many of the hallmark biases of human behavior, including reference-dependent choices and loss-aversion. Given that capuchins demonstrate little to no social learning and lack experience with abstract gambles, these results suggest that certain biases such as loss-aversion are an innate function of how our brains code experiences, rather than learned behavior or the result of misapplied heuristics.
    Keywords: Prospect theory, Loss aversion, Reference dependence, Evolution, Neuroeconomics, Capuchin monkeys, Monkey business
    JEL: C91 C99 D12 D46 D80 D81
    Date: 2005–06
  2. By: Joëlle Noailly (CPB Netherlands Bureau for Economic Policy Analysis); Jeroen C.J.M. van den Bergh (Free University); Cees A. Withagen (Free University and Tilburg University)
    Abstract: Conditions for the emergence of cooperation in a spatial common-pool resource game are studied. This combines in a unique way local and global interactions. A fixed number of harvesters are located on a spatial grid. Harvesters choose among three strategies: defection, cooperation, and enforcement. Individual payoffs are affected by both global factors, namely, aggregate harvest and resource stock level, and local factors, such as the imposition of sanctions on neighbors by enforcers. The evolution of strategies in the population is driven by social learning through imitation. Numerous types of equilibria exist in these settings. An important new finding is that clusters of cooperators and enforcers can survive among large groups of defectors. We discuss how the results contrast with the non-spatial, but otherwise similar, game of Sethi and Somanathan (1996).
    Keywords: Common property, Cooperation, Evolutionary game theory, Global interactions, Local interactions, Social norms
    JEL: C72 Q2
    Date: 2005–05
  3. By: Joëlle Noailly (CPB Netherlands Bureau for Economic Policy Analysis); Cees A. Withagen (Free University and Tilburg University); Jeroen C.J.M. van den Bergh (Free University)
    Abstract: We study the conditions for the emergence of cooperation in a spatial common-pool resource game. We consider three types of agents: cooperators, defectors and enforcers. The role of enforcers is to punish defectors for overharvesting the resource. Agents are located around a circle and they only observe the actions of their two nearest neighbors. Their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest payoffs on average. Using theoretical and numerical analysis, we find that a large diversity of equilibria exists in this game. In particular, we derive conditions for the occurrence of equilibria in which the three strategies coexist. We also discuss the stability of these equilibria. Finally, we show that introducing resource dynamics favors the occurrence of cooperative equilibria.
    Keywords: Common property, Evolutionary game theory, Local interactions game, Self-organization, Cooperation
    JEL: C72 Q2
    Date: 2005–05
  4. By: Papa Seck (Hunter College, Department of Economics)
    Abstract: This paper looks at the consequences children face when they lose a parent(s). After modeling the representative household’s bargaining process between their biological and orphaned children, the empirical section of this paper looks at the types of activities that children engage in, and the differences in educational outlays of host households between those children who have lost their parents and those who have not. The results indicate that orphanhood is of critical importance to human capital formation as the probability of engaging in child labor and being idle increases relative to school attendance, following the loss of both parents. This has the same distortionary effect as a tax on children as a result of orphanhood. Even though these children do not have markedly lower abilities to read, write or perform written calculation before the death of their parents, they are outperformed in all three categories once they join the new household following the loss of both parents. It concludes that for policymakers, in-kind subsidies provided at the school level will have a bigger impact than those provided at the household level.
    JEL: C23 C25 D13 D19 I20 I30 J12 O15
    Date: 2005

This nep-evo issue is ©2005 by Matthew Baker. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.