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on Evolutionary Economics |
| By: | Tavoni, Alessandro |
| Abstract: | Substantial evidence has accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium concepts which perform better empirically, often by introducing a reference point to which players compare the available payoff allocations, as in impulse balance equilibrium and in the inequity aversion model. The first part of this paper is concerned with reviewing the recent reference point literature and advancing a new, empirically sound, hybrid concept. In the second part, evolutionary game theoretic models are employed to investigate the role played by fairness motives as well as spatial structure in explaining the evolution of cooperative behavior. |
| Keywords: | Other-regarding preferences; Inequity aversion; Endogenous preferences; Evolutionary stability; Prisoner’s dilemma |
| JEL: | B52 A13 D64 C72 C73 |
| Date: | 2008–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9252&r=evo |
| By: | Benno Torgler; Markus Schaffner; Bruno S.Frey; Sascha L. Schmidt |
| Abstract: | The experimental literature and studies using survey data have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis, testing the model of inequity aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequity aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives. |
| Keywords: | Inequity aversion, relative income, positional concerns, envy, social comparison, performance, interdependent preferences |
| JEL: | D00 D60 L83 |
| Date: | 2008–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:230&r=evo |
| By: | Fershtman, Chaim; Gneezy, Uri; List, John |
| Abstract: | Models of inequity aversion and fairness have dominated the behavioural economics landscape in the last decade. This study gathers data from 240 subjects exposed to variants of two of the major experimental games - dictator and trust - that are employed to provide important empirical content to these models. With a set of simple laboratory treatments that focus on a manipulation of an important feature of real markets, competition over resources, we show that extant behavioural models are unable to explain data drawn from realistic manipulations of either game. Our empirical results highlight that if placed in an environment wherein socially acceptable actions provide one person with a greater portion of the rents, people will put forth extra effort to secure those rents, to the detriment of the other player. In this manner, when one can earn more than the other player through actions deemed customary, people reveal a preference for equity aversion, not inequity aversion. We propose an alternative modelling approach that can explain these data as well as accommodate other major data patterns observed in the experimental literature. |
| Keywords: | Equity Aversion; Social Preferences; Social Status |
| JEL: | C91 Z13 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6853&r=evo |
| By: | Fershtman, Chaim; Gneezy, Uri; Hoffman, Moshe |
| Abstract: | A taboo is an "unthinkable" action, that is, even the thought of violating it triggers social punishment. Taboos are the social "thought police," discouraging individuals from considering certain type of actions. We consider a simple model in which taboos are part of the definition of one's identity. Deliberating over breaking the taboo adds the action to the individual’s choice set and provides information on possible private benefits but is costly because it contradicts one's identity. The strength of the taboo is endogenously determined by the number of individuals that obey it without any consideration of its violation. We model stable taboos and examine how they can change and disappear over time as a result of changes in the distribution of private benefits gained from its violation. We assume that individuals are heterogeneous with respect to their attitudes towards social punishment. We then analyze the relationship between social heterogeneity and the strength as well as effectiveness of taboos, i.e., are taboos stronger in homogenous or heterogeneous societies? We extend our analysis and examine societies in which individuals may choose among several identities, characterized by different taboos or varying strengths of taboos. Having such a choice defines an evolutionary process with respect to identity: Some identities disappear while others flourish. We examine the characterization and the conditions giving rise to a multi-identity society. |
| Keywords: | Identity; Social Norms; Taboos |
| JEL: | D63 H41 Z13 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6854&r=evo |
| By: | Shlomo Naeh (Hebrew University); Uzi Segal (Boston College) |
| Abstract: | Transitivity is a fundamental axiom in Economics that appears in consumer theory, decision under uncertainty, and social choice theory. While the appeal of transitivity is obvious, observed choices sometimes contradict it. This paper shows that treatments of violations of transitivity al- ready appear in the rabbinic literature, starting with the Mishnah and the Talmud (1st–5th c CE). This literature offers several solutions that are similar to those used in the modern economic literature, as well as some other solutions that may be adopted in modern situations. We analyze several examples. One where nontransitive relations are acceptable; one where a violation of transitivity leads to problems with extended choice functions; and a third where a nontransitive cycle is deliberately created (to enhance justice). |
| Keywords: | transitivity, Talmud |
| Date: | 2008–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:687&r=evo |