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on Evolutionary Economics |
| By: | George Ehrhardt; Matteo Marsili; Fernando Vega-Redondo |
| Abstract: | The paper proposes a model to study the conditions under which complex networks emerge (or not) when agents are involved in a dynamic coordination setup. The focus, however, is not on the classical issue of equilibrium selection - instead, our aim is to shed light on how agents' efforts to coordinate a¤ect the process of network formation in a large and complex environment. The model posits that, over time, new links are created if they are pro.table, and existing links disappear due to exogenous decay. Alongside this struggle between link creation and link destruction, agents' choices in the coordination game adapt to their current local conditions and thus coevolve with the social network. The dynamic behavior of the system is studied within di¤erent time scales (the long and ultralong runs), which di¤er in the role accorded to the noise that is induced by finite populations. We characterize analytically the evolution of the modelin each case and show that, depending on the time scale under consideration, the process displays discontinuous transitions in overall connectivity, resilient transformations in network topology, and equilibrium multiplicity. This behavior is akin to that observed concerning various network phenomena where coordination and network formation display mutually reinforcing roles. |
| JEL: | C73 D83 D85 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2008/08&r=evo |
| By: | Daniela Di Cagno; Emanuela Sciubba (School of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | We run a laboratory experiment were friendship networks are generated endogenously within an anonymous group. Our experiment builds on two phases in sequence: a network formation game and a trust game. We ?find that in those sessions where the trust game is played before the network formation game, the overall level of trust is not signi?cantly different from the one observed in a simple trust game; in those sessions where the trust game is played after the network formation game we ?find that the overall level of trust is signi?cantly lower than in the simple trust game. Hence surprisingly trust does not increase because of enforced reciprocity and moreover a common social history does affect the level of trust, but in a negative manner. Where network effects matter is in the choice of whom to trust: while we tend to trust less on average those with whom we have already interacted compared to total strangers, past history allows us to select whom to trust relatively more than others. |
| Keywords: | network formation, trust game, experiments |
| JEL: | C91 C92 L14 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0801&r=evo |
| By: | Oded Galor; Quamrul Ashraf |
| Abstract: | This research contributes to the understanding of human genetic diversity within a society as a significant determinant of its economic development. The hypothesis advanced and empirically examined in this paper suggests that there are socioeconomic trade-offs associated with genetic diversity within a given society. The investigation exploits an exogenous source of cross-country variation in genetic diversity by appealing to the “out of Africa” hypothesis of human origins to empirically establish a non-monotonic effect of genetic diversity on development outcomes in the pre-colonial era. Contrary to theories that reject a possible role for human genetics in influencing economic development, this study demonstrates the economic significance of diversity in genetic traits, while abstaining entirely from conceptual frameworks that posit a hierarchy of such traits in terms of their conduciveness to the process of economic development. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2008-3&r=evo |