nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2008‒07‒05
three papers chosen by
Matthew Baker
City University of New York

  1. Behavorial Effects in Individual Decisions of Network Formation By Harmsen-van Hout Marjolein J.W.; Dellaert Benedict G.C.; Herings P. Jean-Jacques
  2. Eliciting motives for trust and reciprocity by attitudinal and behavioural measures By Francesco Farina; Niall O'Higgins; Patrizia Sbriglia
  3. Altruism and Career Concern By Shchetinin, Oleg

  1. By: Harmsen-van Hout Marjolein J.W.; Dellaert Benedict G.C.; Herings P. Jean-Jacques (METEOR)
    Abstract: Network formation constitutes an important part of many social and economic processes, but relatively little is known about how individuals make their linking decisions. This article provides an experimental investigation of behavioral effects in individual decisions of network formation. Our findings demonstrate that individuals systematically simplify more complex components of network payoff in their linking decisions. Specifically, they focus on only part of the normative payoff, namely on their own direct payoff and tend to ignore indirect payoff and payoff for others in the network. Additionally, individuals use descriptive behavioral traits of link choice alternatives to guide their choices. They are sensitive to whether an alternative involves link deletion or creation and whether it concerns an isolated or a central node. Furthermore, we find that complexity of one type can moderate individuals’ dealing with a complex feature of another type. These behavioral effects have important implications for researchers and managers working in areas that involve network formation.
    Keywords: Economics (Jel: A)
    Date: 2008
  2. By: Francesco Farina; Niall O'Higgins; Patrizia Sbriglia
    Abstract: The intention to “invest” in the Trust Game in extensive form revealed by a move could conceal different motivations. Whether the motive hidden beneath the manifest behaviour of the first mover is the desire to invest in a relationship of mutual advantage with the trustee or the desire to be good to him independently from his own final payoff, remains an unsettled question. The question then is how to identify the motive which is actually at work, out of the two possible motives embedded in the trust game: 1) an “investment” motive - conditional cooperation is a way to express the expectation of reciprocal behaviour; and/or, 2) an altruistic motive - what may appear as an “investment” actually conceals a social preferences, that is the intention to gratuitously favour the other player. In this paper we attempt to elicit the true motive underlying the behaviour of each of the two players and suggest that the most informative utilization of surveys in this regard goes beyond the simple comparison between answers to a questionnaire and actual behaviour. The statistical treatment of players’ behaviour in the sessions, by means of attitudes as shown by their answers, allows a deeper understanding of the players’ behaviour and a better evaluation of the experimental results. Therefore, the objective of disentangling the strategic motive (the intention of the trustor to elicit benevolence from the trustee, and the trustee interest in reciprocating) from the altruistic motive will be pursued by establishing a correlation between the attitudinal and the behavioural measures of trust and trustworthiness. In this paper, we will then be using the “words” of answers to a questionnaire in order to more deeply understand the motivations behind “actions”.
    Keywords: Experimental economics, Surveys, Trust, Reciprocity
    JEL: C42 C72 C91 D63 D64 D83
    Date: 2008–06
  3. By: Shchetinin, Oleg
    Abstract: The paper studies the impact of altruism on Agent's motivation in the career concerns model. The main result is that higher altruism can decrease effort though conventional wisdom suggests the opposite should always the case. The key for the result is the distinction between current and anticipated altruism. The current altruism stimulates the Agent because it makes him partially internalize the Principal's benefit from output. More subtle, the anticipated altruism weakens effort because it lessens career concerns. The paper contributes to the literature on interaction between intrinsic and extrinsic motivation. It gives an example when intrinsic motivator (altruism) lessens extrinsic motivation (career concerns). The model has a number of other interesting features. It gives an example of winner's blessing. It shows that if the worker pushes himself too hard trying to pretend more skilled, it can hinder altruistic relationship. Whereas if the worker shirks, his laziness is safe for establishing altruistic relation in the future. The natural interpretation of the model is labor contract between friends, other applications are also discussed.
    Keywords: career concern; altruism; labor contract; intrinsic motivation
    JEL: D86 D64 M50
    Date: 2008–07

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