nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2006‒01‒24
five papers chosen by
Matthew Baker
US Naval Academy, USA

  1. The Importance of Emotions for the Effectiveness of Social Punishment By Astrid Hopfensitz; Ernesto Reuben
  2. Economists on Darwin’s theory of social evolution and human behaviour By A. Marciano
  3. Social memory, social stress, and economic behaviors By Taiki Takahashi
  4. Vicarious Learning and Socio-Economic Transformation in Indian Trans-Himalaya: An evolutionary tale of economic development and policy making By K. Chandrasekhar; S. Bhaduri
  5. The Origin of Prospect Theory, or Testing the Intuitive Statistician By Floris Heukelom

  1. By: Astrid Hopfensitz (Faculty of Economics and Econometrics, University of Amsterdam); Ernesto Reuben (Faculty of Economics and Econometrics, University of Amsterdam)
    Abstract: This paper experimentally explores how the enforcement of cooperative behavior in a social dilemma is facilitated through institutional as well as emotional mechanisms. Recent studies emphasize the importance of negatively valued emotions, such as anger, which motivate individuals to punish free riders. However, these types of emotions also trigger retaliatory behavior by the punished individuals. This makes the enforcement of a cooperative norm more costly. We show that in addition to anger, ‘social’ emotions like shame and guilt need to be present for punishment to be an effective deterrent of uncooperative actions. They play a key role by subduing the desire of punished individuals to retaliate and by motivating them to behave more cooperatively in the future.
    Keywords: Emotions; Punishment; Retaliation; Counter punishment; Social Norms; Fairness; Cooperation
    JEL: Z13 C92 D74 H41
    Date: 2005–08–02
  2. By: A. Marciano
    Abstract: The purpose of this article is to analyse the way economists interested in social and economic evolution cite, mention or refer to Darwin. We focus on the attitude of economists towards Darwin’s theory of social evolution – an issue he considered as central to his theory. We show that economists refer to and mention Darwin as a biologist and neglect or ignore his theory of social and cultural evolution. Three types of reference are identified: first, economists view and quote Darwin as having borrowed concepts from classical political economists, Malthus and Smith. Darwin is then mentioned to emphasize the existence of economic theories of social evolution. Second, economists refer to and cite Darwin from the perspective of the use of biological concepts in social sciences. Darwin's biological theories are then equated with those of Spencer. From these two perspectives, Darwin's theory of social evolution is ignored and Darwin considered as a biologist exclusively. Third, economists acknowledge the existence of Darwin's general (biological and social) theory of evolution. Darwin is then considered and quoted as a biologist and a social evolutionist.
    Keywords: Darwin, social evolution, evolutionary economics, bioeconomics
    JEL: A11 B52
    Date: 2006–01
  3. By: Taiki Takahashi (Hokkaido University)
    Abstract: Social memory plays a pivotal role in social behaviors, from mating behaviors to cooperative behaviors based on reciprocal altruism. More specifically, social/person recognition memory is supposed, by behavioral-economic and game-theoretic analysis, to be required for tit- for-tat like cooperative behaviors to evolve under the N-person iterated prisonerfs dilemma game condition. Meanwhile, humans are known to show a social stress response during face-to-face social interactions, which might affect economic behaviors. Furthermore, it is known that there are individual differences in a social stress response, which might be reflected in individual differences in various types of economic behaviors, partially via different capacities of social memory. In the present study, we investigated the acute effects of social stress- induced free cortisol (a stress hormone) elevation on hippocampus- dependent social memory by utilizing the Trier social stress test (consisting of a public speech and a mental arithmetic task).We also examine the correlation between an economic behavior-related personality trait (i.e., general trust scale) and social stress-induced cortisol elevations. We found that (1) social stress acutely impairs social memory during social interaction and (2) interpersonal trust reduces social stress response. Together, interpersonal trust may modulate economic behaviors via stress hormonefs action on social cognition- related brain regions.
    Keywords: neuroeconomics, hormone, trust, game theory, social cognition, stress, social memory
    JEL: C9
    Date: 2005–12–27
  4. By: K. Chandrasekhar; S. Bhaduri
    Abstract: Recently, it has been suggested that the process of economic development should ideally be viewed as a socioeconomic transformation. Such a view requires a comprehensive understanding of how agents learn and change their behaviour. However, these aspects have only been inadequately addressed in development theory. This paper argues that social-cognitive vicarious learning theories can become a useful methodological tool by incorporating a triadic interaction between personal factors (beliefs, values), behaviour and environment. Our analysis is based on a survey of the Indian trans-Himalayan regions. The development trajectory of these regions suggests that a proper understanding of the vicarious learning mechanism provides crucial insight into the speed of socioeconomic transformations. It also helps to identify appropriate change agents within a society and, in turn, underscores the need for a comprehensive, yet flexible, development policy framework.
    Keywords: development, socio-economic transformation, vicarious learning, evolution, traditional societies
    Date: 2006–01
  5. By: Floris Heukelom (Faculty of Economics, Universiteit van Amsterdam)
    Abstract: The origin of prospect theory is the desire to test the intuitive statistician in the real world. The development of this theory by the cognitive psychologists Kahneman and Tversky can be traced to the formers work in cognitive psychophysics, in which deviations from average behavior are termed (statistical) errors; and the latters work on decision theory, with its normative vs. descriptive framework. The combination of these two types of probabilistic psychology culminated in a new descriptive theory of human decision making in the real world, coined Heuristics and Biases. The 1979 Econometrica article applies this new descriptive theory to economists EUT. It equates the intuitive statistician with the rational economic man and shows how it descriptively fails.
    Keywords: Kahneman and Tversky; Prospect Theory; Intuitive Statistician; Heuristics and Biases
    JEL: B31 B41 D81
    Date: 2005–12–08

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