nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2008‒01‒19
four papers chosen by
Matthew Baker
City University of New York

  1. Humans versus computer algorithms in repeated mixed strategy games By Spiliopoulos, Leonidas
  2. The Population Cycle Drives Human History - from a Eugenic Phase into a Dysgenic Phase and Eventual Collapse By Weiss, Volkmar
  3. Behavioural Decisions and Welfare By Dalton, Patricio; Ghosal, Sayantan
  4. Procrastination and Impatience By Ernesto Reuben; Paola Sapienza; Luigi Zingales

  1. By: Spiliopoulos, Leonidas
    Abstract: This paper is concerned with the modeling of strategic change in humans’ behavior when facing different types of opponents. In order to implement this efficiently a mixed experimental setup was used where subjects played a game with a unique mixed strategy Nash equilibrium for 100 rounds against 3 preprogrammed computer algorithms (CAs) designed to exploit different modes of play. In this context, substituting human opponents with computer algorithms designed to exploit commonly occurring human behavior increases the experimental control of the researcher allowing for more powerful statistical tests. The results indicate that subjects significantly change their behavior conditional on the type of CA opponent, exhibiting within-sub jects heterogeneity, but that there exists comparatively little between-subjects heterogeneity since players seemed to follow very similar strategies against each algorithm. Simple heuristics, such as win-stay/lose-shift, were found to model subjects and make out of sample predictions as well as, if not better than, more complicated models such as individually estimated EWA learning models which suffered from overfitting. Subjects modified their strategies in the direction of better response as calculated from CA simulations of various learning models, albeit not perfectly. Examples include the observation that subjects randomized more effectively as the pattern recognition depth of the CAs increased, and the drastic reduction in the use of the win-stay/lose-shift heuristic when facing a CA designed to exploit this behavior.
    Keywords: Behavioral game theory; Learning; Experimental economics; Simulations; Experience weighted attraction learning; Simulations; Repeated games; Mixed Strategy Nash equilibria; Economics and psychology
    JEL: C9 C63 C70 C73 C72 C91
    Date: 2008–01–09
  2. By: Weiss, Volkmar
    Abstract: In the period before the onset of demographic transition, when fertility rates were positively associated with income levels, Malthusian pressure gave an evolutionary advantage to individuals whose characteristics were positively correlated with child quality and hence higher IQ, increasing in such a way the frequency of underlying genes in the population. As the fraction of individuals of higher quality increased, technological progress intensified. Positive feedback between technological progress and the level of education reinforced the growth process, setting the stage for an industrial revolution that facilitated an endogenous take-off from the Malthusian trap. The population density rose and with it social and political friction, especially important at the top of the social pyramid. Thus, from a certain turning point of history, the well-to-do have fewer children than the poor. Once the economic environment improves sufficiently, the evolutionary pressure weakens, and on the basis of spreading egalitarian ideology and general suffrage the quantity of people gains dominance over quality. At present, we have already reached the phase of global human capital deterioration as the necessary prerequisite for a global collapse by which the overpopulated earth will decimate a species with an average IQ, still too mediocre to understand its own evolution and steer its course.
    Keywords: IQ; Dysgenics; Democracy; Poverty; Francis Galton; Darwinism; Fertility; Demographic transition; Human capital
    JEL: N3 J1 O4
    Date: 2007–07–10
  3. By: Dalton, Patricio (Department of Economics, University of Warwick); Ghosal, Sayantan (Department of Economics, University of Warwick)
    Abstract: We study decision problems where (a) preference parameters are defined to include psychological/moral considerations and (b) there is a feedback effect from chosen actions to preference parameters. In a standard decision problem the chosen action is required to be optimal when the feedback effect from actions to preference parameters is fully taken into account. In a behavioural decision problem the chosen action is optimal taking preference parameters as given although chosen actions and preference parameters are required to be mutually consistent. Our framework unifes seemingly disconnected papers in the literature. We characterize the conditions under which behavioural and standard decisions problems are indistinguishable : in smooth settings, the two decision problems are generically distinguishable. We show that in general, revealed preferences cannot be used for making welfare judgements and we characterize the conditions under which they can inform welfare analysis. We provide an existence result for the case of incomplete preferences. We suggest novel implications for policy and welfare analysis.
    Keywords: Decisions ; psychology ; indistinguishability ; revealed preferences ; welfare ; existence ; aspirations
    JEL: D01 D62 C61 I30
    Date: 2008
  4. By: Ernesto Reuben; Paola Sapienza; Luigi Zingales
    Abstract: There is a large body of literature documenting both a preference for immediacy and a tendency to procrastinate. O'Donoghue and Rabin (1999a,b, 2001) and Choi et al. (2005) model these behaviors as the two faces of the same phenomenon. In this paper, we use a combination of lab, field, and survey evidence to study whether these two types of behavior are indeed linked. To measure immediacy we had subjects choose between a series of smaller-sooner and larger-later rewards. Both rewards were paid with a check in order to control for transaction costs. To measure procrastination we use the subjects' actual behavior in cashing the check and completing tasks on time. Our results lend support to the hypothesis that subjects who have a preference for immediacy are indeed more likely to procrastinate.
    JEL: D0 G0
    Date: 2007–12

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