nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2005‒11‒09
five papers chosen by
Matthew Baker
US Naval Academy, USA

  1. Why is Economic Geography not an Evolutionary Science? By Ron Boschma; Koen Frenken
  2. Inequality Reduces Punishment-Induced Cooperation in Humans By James Fowler; Tim Johnson; Richard McElreath; Oleg Smirnov
  3. The Evolution of Trust and Reputation: Results from Simulation Experiments By Andreas Diekmann; Wojtek Przepiorka
  4. Does Competition Affect Giving? An Experimental Study By John Duffy; Tatiana Kornienko
  5. Cooperation with Strategy-Dependent Uncertainty Attitude By Nicola Dimitri

  1. By: Ron Boschma; Koen Frenken
    Abstract: This paper explains the main commonalities and differences between neoclassical, institutional and evolutionary approaches that have been influential in economic geography during the last couple of decades. For all three approaches, we argue that they are in agreement in some respects and in conflict in other respects. While explaining to what extent and in what ways the Evolutionary Economic Geography approach differs from the Neoclassical (or ‘new’) Economic Geography and the Institutional Economic Geography, we can specify the value-added of economic geography as an evolutionary science. Finally, we briefly outline a research agenda of the Evolutionary Economic Geography we like to explore.
    Date: 2004–08
  2. By: James Fowler (University of California, Davis); Tim Johnson (Max Planck Institute for Human Development); Richard McElreath (University of California, Davis); Oleg Smirnov (University of Miami)
    Abstract: Humans often cooperate, voluntarily paying an individual cost to supply a benefit to others. Public good experiments show that punishment induces a high level of cooperation, even when it is costly to the punisher. It is unclear, however, what motivates individuals to engage in costly punishment: a desire to retaliate against non-cooperators or a desire to reduce inequality among group members. Although both motives might have a positive effect on cooperation, they cannot be separated in the conventional public good game. Here we conduct an experiment in which we add a randomly-generated fixed payoff to a public good game with punishment. This design allows us to determine whether punishment is aimed at low contributors or high earners. The results show that players punish frequently, penalizing both those who contribute the least and those who earn the most. However, the exogenously-created inequality tends to distort the meaning of punishment, which dramatically reduces the amount of cooperation observed. This evidence suggests that social equality may be necessary if punishment is to have a positive influence on cooperation in humans.
    JEL: C9
    Date: 2005–08–26
  3. By: Andreas Diekmann (ETH Zurich, Department of Social Sciences & Humanities); Wojtek Przepiorka (ETH Zurich, Department of Social Sciences & Humanities)
    Abstract: In online interactions in general, but especially in interactions between buyers and sellers on internet-auction platforms, the interacting parties must deal with trust and cooperation problems. Whether a rating system is able to foster trust and cooperation through reputation and without an external enforcer is an open question. We therefore explore through ecological analysis different buyer and seller strategies in terms of their success and their contribution to supporting or impeding trust and cooperation. In our agent-based model, the interaction between a buyer and a seller is defined by a one-shot trust game with a reputation mechanism. In every interaction, a buyer has complete information about a seller's past behavior. We find that cooperation evolves under two conditions even in the absence of an external sanctioning authority. On the one hand, some minimal fraction of buyers must make use of the sellers’ reputation in their buying strategies and, on the other hand, trustworthy sellers must be given opportunities to gain a good reputation through their cooperative behavior. Despite the apparent usefulness of the reputation mechanism, a small number of deceitful sellers are able to hold their ground.
    Keywords: trust game, reputation, agent-based simulation
    JEL: C9
    Date: 2005–08–30
  4. By: John Duffy (University of Pittsburgh); Tatiana Kornienko (University of Stirling)
    Abstract: We explore whether natural human competitiveness can be exploited to stimulate charitable giving in a controlled laboratory experiment involving three different treatments of a sequential ``dictator game.'' Without disclosing the actual amounts given and kept, in each period players are publicly ranked -- by the amount they give away, by the amount they keep for themselves, or spuriously. Our results are generally supportive of the hypothesis that competitive urges can encourage or frustrate altruistic behavior, depending on the competitive frame. We find some support for an alternative hypothesis that relative concerns are due to information-gathering rather than competition.
    Keywords: Dictator game, repeated decisions, charitable giving, altruistic behavior, competitive altruism, status, relative standing, tournaments, motivation, information-based relative concerns
    JEL: C91 D64
    Date: 2005–08–13
  5. By: Nicola Dimitri
    Abstract: The paper shows that in a Prisoner’s Dilemma Knightian uncertainty, formalised by multiple priors, may entail cooperation at a generalised Nash Equilibrium. The main idea is that players may have an attitude towards uncertainty that depends upon their available strategies. In particular, if players anticipate to be sufficiently more optimistic when choosing to cooperate, than when defecting, then they may indeed cooperate. Though uncommon in economic modelling, choice-dependent uncertainty attitude formalises a behaviour which is well understood and widely accepted by cognitive psychologists, within the theory of Cognitive Dissonance.
    Keywords: Cooperation, Cognitive Dissonance, Equilibrium, Games, Uncertainty
    JEL: C72
    Date: 2005–07

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