nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2008‒02‒09
four papers chosen by
Matthew Baker
City University of New York

  1. Managing the Evolution of Cooperation By Julian Dormann; Thomas Ehrmann
  2. Better-Reply Dynamics with Bounded Recall By Andriy Zapechelnyuk
  3. The evolution of cheating in asymmetric contests By Aleksander Berentsen; Esther Bruegger; Simon Loertscher
  4. An Experimental Investigation of Violations of Transitivity in Choice under Uncertainty By Michael H. Birnbaun; Ulrich Schmidt

  1. By: Julian Dormann; Thomas Ehrmann
    Abstract: Management scholars have long stressed the importance of evolutionary processses for inter-firm cooperation but have mostly missed the promising opportunity to incorporate ideas from evolutionary theories into the analysis of collaborative arrangements. In this paper, we first present three rules for the evolution of cooperation - kinship selection, direct reciprocity, and indirect reciprocity. Second, we apply our theoretical considerations, enriched with ideas from cultural anthropology, to the context of a specific and particularly attractive type of cooperative arrangement, the franchise form of organization. Third, we provide a preliminary empirical test with regards to conditions under which evolutionary modes can secure cooperative behavior. We conclude by summarizing our results and deriving fertile areas for further research.
    Keywords: Length 46 pages
    Date: 2008–01
  2. By: Andriy Zapechelnyuk (Kyiv School of Economics)
    Abstract: A decision maker is engaged in a repeated interaction with Nature. The objective of the decision maker is to guarantee to himself the average payoff as large as the best-reply payoff to Nature's empirical distribution of play, no matter what Nature does. The decision maker with perfect recall can achieve this objective by a simple better-reply strategy. In this paper we demonstrate that the relationship between perfect recall and bounded recall is not straightforward: The decision maker with bounded recall may fail to achieve this objective, no matter how long recall he has and no matter what better-reply strategy he employs.
    Keywords: Better-reply dynamics, regret, bounded recall, fictitious play, approachability
    JEL: C73 D81 D83
    Date: 2008–01
  3. By: Aleksander Berentsen; Esther Bruegger; Simon Loertscher
    Abstract: Consider a society where all agents initially play "fair" and one agent invents a "cheating" strategy such as doping in sports. Which factors determine the success of the new cheating strategy? In order to study this question we consider an evolutionary game with local information. Three factors determine the imitation dynamics of the model: the location and the type of the innovator, the distribution of types, and the information available to the agents. In particular we find that the economy is more likely to end up in a state where all agents cheat if the innovator is of low type or when the agents are maximally segregated.
    Keywords: Evolutionary game theory, imitation dynamics, heterogeneity, local information, global interaction
    JEL: C70 C79 D83
    Date: 2007–02
  4. By: Michael H. Birnbaun; Ulrich Schmidt
    Abstract: Several models of choice under uncertainty imply systematic violations of transitivity of preference. Our experiments explored whether people show patterns of intransitivity predicted by these models. To distinguish “true” violations from those produced by “error,” a model was fit in which each choice can have a different error rate and each person can have a different pattern of true preferences that does not need to be transitive. Error rate for a choice is estimated from preference reversals between repeated presentations of the same choice. Our results showed that very few people repeated intransitive patterns. We can retain the hypothesis that transitivity best describes the data of the vast majority of participants.
    Keywords: decision making, errors, regret theory, transitivity
    JEL: C91 D81
    Date: 2008–01

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