nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2008‒09‒05
four papers chosen by
Matthew Baker
City University of New York

  1. Image Building By B. Curtis Eaton; William D. White
  2. Perfect Sequential Reciprocity and Dynamic Consistency By Penta, Antonio
  3. Preference reversals and probabilistic choice By Pavlo R. Blavatskyy
  4. Dynamics of social trust and human capital in the learning process: The case of the Japan garment cluster in the period 1968-2005 By yamamura, eiji

  1. By: B. Curtis Eaton; William D. White
    Abstract: We humans engage in a lot of costuming that can often be interpreted as type communication. Uniforms are the obvious example (cops on the beat, for example, wear uniforms because they want us to know that they are cops), but there are many other examples. This paper models costuming, or image building, as type communication. At the heart of the analysis is a model of social interaction in which information concerning the type of the people with whom we interact is mutually valuable - that is, valuable to them and to us. We first examine the equilibria of an image building game in which players choose their costumes and then engage in a series of social interactions in which their costumes might serve as type signals. Obviously, there are as many perfect signaling equilibria as there are ways to assign costumes to player types, so the image building game has a very nasty coordination problem. We look at two ways in which this problem might be solved. First we look for salient, history dependent costume replacement strategies in a dynamic image building game with imperfectly durable costumes. Then we examine the possibility that the firms who make and sell costumes can solve the coordination problem through image advertising. Image advertising as we conceive of it has a number of interesting features that distinguish it from other forms of advertising.
    Date: 2008–01–28
  2. By: Penta, Antonio
    Abstract: Dufwenberg and Kirchsteigers (2004) extends Rabins (1993) theory of reciprocity in a dynamic sense, introducing a rule of revision for players beliefs. The Sequential Reciprocity Equilibrium [SRE] they define can be dynamically inconsistent. In this article it is argued that such dynamic inconsistency is not intrinsically related to issues of reciprocity, but rather to the particular way the beliefsupdating process is modeled. A refinement of the SRE, which is both dynamically consistent and, it is argued, more sound to assumptions usually made in the literature of information economics and philosophy, is proposed.
    Keywords: Reciprocity; Dynamic Consistency
    JEL: D64 D83 C72 C73
    Date: 2004–06
  3. By: Pavlo R. Blavatskyy
    Abstract: Preference reversals occur when different (but formally equivalent) elicitation methods reveal conflicting preferences over two alternatives. This paper shows that when people have fuzzy preferences i.e. when they choose in a probabilistic manner, their observed decisions can generate systematic preference reversals. A simple model of probabilistic choice and valuation can account for a higher incidence of standard (nonstandard) preference reversals for certainty (probability) equivalents and it can also rationalize the existence of strong reversals. An important methodological contribution of the paper is a new definition of a probabilistic certainty/probability equivalent of a risky lottery.
    Keywords: Preference reversal, probabilistic choice, certainty equivalent, probability equivalent, valuation
    JEL: D01 D80 D81 C91
    Date: 2008–08
  4. By: yamamura, eiji
    Abstract: This paper examined how and the extent to which human capital and social trust are associated with the learning process of a manager in making operations decisions through experience. To this end, using a data set originally and purposively constructed by the author, I investigate the development and transformation of the garment industry cluster region of Kojima, Japan. The major findings through statistical estimations are as follows. (1) In the cluster development stage, the social trust of an enterprise and its manager’s experiences in firm operations could be regarded as forming a complimentary association. (2) In the stage following cluster development, however, a manager’s human capital as accumulated through schooling and personal experience becomes complimentary instead of social trust.
    Keywords: Social trust; Human capital; Bayesian learning
    JEL: O10 L20
    Date: 2008–05–17

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