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on Evolutionary Economics |
| By: | Angelo Antoci (University of Sassari); Massimiliano Landi (School of Economics and Social Sciences, Singapore Management University); Pier Luigi Sacco (IUAV, Venice) |
| Abstract: | We consider a (deterministic) evolutionary model where players have dynamic expectations about the strategy distribution. We provide a global analysis of the co-evolution of play and expectations for a generic two{by{two game. Besides the the typical indeterminacy of the evolutionary dynamics, we find some other ones: for any initial strategy configuration the dynamics can converge to any asymptotically stable fixed point, for different initial values of the expectations. Moreover, starting from the same initial pair of strategy configuration and values of expectations, the dynamics may lead to different asymptotically stable fixed points for different parameters of the expectations. |
| Keywords: | evolutionary games, dynamic systems, animal spirits |
| JEL: | C73 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:10-2006&r=evo |
| By: | Brishti Guha (School of Economics and Social Sciences, Singapore Management University) |
| Abstract: | Final goods producers, who may be intrinsically honest (a behavioral type) or opportunistic (strategic), play a repeated game of imperfect information with suppliers of an input of variable (and non-verifiable) quality. Returns to cheating are increasing in the proportion of intrinsically honest producers. If producers compete for another scarce input, adverse selection reduces this proportion enough to enforce universal honesty, whether at a high or a low quality equilibrium. This mechanism limits the proportion of behavioral types in the population of producers over a wide range of parameters: despite their inability to compete with opportunists, they are not wholly wiped out due to the strategic response of input suppliers. Moreover, in equilibrium, opportunists must replicate the behavioral type’s behavior. Thus competition curtails the presence of the behavioral type but increases the incidence if its behavior. If a labor market, where skilled and unskilled labor coexist, is also endogenized, an honest equilibrium with both high and low quality will generally be reached; however an exclusively high quality equilibrium with unemployment of unskilled labor is also possible. |
| Keywords: | Moral hazard, evolution, strategic response, repeated games, skill. |
| JEL: | C7 D8 J4 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:06-2006&r=evo |
| By: | Alexander Harin (MODERN UNIVERSITY FOR THE HUMANITIES - Modern University for the Humanities - [Modern University for the Humanities]) |
| Abstract: | A man is a key subject of economics. “A man is irrational” - this opinion can be made from Allais paradox, risk aversion and other well-known fundamental problems. For a long time, this opinion was a barrier to proper solution of these problems and the development of the economics. A radically new way is proposed to solve them and remove this barrier. The way is the generalization of a breach of a term of contract. |
| Keywords: | contract; business; bank; trade; industry; development; risk; “ideal” economics; investment; choice |
| Date: | 2006–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00089118_v1&r=evo |
| By: | John Malcolm Dowling (School of Economics and Social Sciences, Singapore Management University); Yap Chin Fang (Tampines Junior College, Singapore) |
| Abstract: | The paper suggests that maintenance of a homeostatic equilibrium provides a rationale for many actions of economic agents. Homeostatic equilibrium has physical, economic, emotional, psychological and environmental dimensions. The characteristics of this equilibrium include feelings of safety, trust, connectedness with friends, family and community, and a predictable and welcoming social and work environment. Individuals generally make decisions that help them move toward and achieve this state of equilibrium. Departure from homeostasis reduces well being and stimulates agents to take actions that will return them to a state of homeostasis. This hypothesis is tested with probit analysis using sample responses from the four waves of the World Values Surveys conducted between 1980 and 2002. Results generally support the homeostasis hypothesis. Variables that reflect departure from homeostasis such as divorce and poor health are highly significant, pointing to a reduction in well being. Variables that reflect the importance of friends, family, a trusting social and work environment have significant impacts to raise well being. |
| JEL: | I3 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:09-2006&r=evo |