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on Evolutionary Economics |
| By: | Andrew Reeson; Karel Nolles (CSIRO Sustainable Ecosystems, Australia) |
| Abstract: | Incentives, regulations and other policy interventions intended to promote sustainability work through influencing human behaviour. There is therefore much to be gained from a thorough understanding of exactly how various policy interventions relate to the decision-making process. Experimental economics, and the closely related fields of behavioural economics and behavioural finance, apply an empirical approach to study how people act when faced with a range of economic and social scenarios. The experimental approach was pioneered by Vernon Smith and Daniel Kahneman and others, building on early studies by Chamberlin (1948). In recognition of this work, Kahneman and Smith were awarded the 2002 Nobel Prize in Economic Sciences. This paper briefly reviews the applications and methods of experimental economics, relates some key research findings and describes some examples of its use in informing environmental policy. |
| Keywords: | Experimental economics; Behavioral economics; Environmental economics; Environmental markets; Market-based instruments; MBIs |
| JEL: | C90 Q50 Q58 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:cse:wpaper:2009-03&r=evo |
| By: | Dietrich Franz; List Christian (METEOR) |
| Abstract: | According to standard rational choice theory, as commonly used in political science and economics, an agent''s fundamental preferences are exogenously fixed, and any preference change over decision options is due to Bayesian information learning. Although elegant and parsimonious, this model fails to account for preference change driven by experiences or psychological changes distinct from information learning. We develop a model of non-informational preference change.Alternatives are modelled as points in some multidimensional space, only some of whose dimensions play a role in shaping the agent''s preferences.Any change in these `motivationally salient'' dimensions can change the agent''s preferences. How it does so is described by a new representation theorem. Our model not only captures a wide range of frequently observed phenomena, but also generalizes some standard representations of preferences in political science and economics. |
| Keywords: | mathematical economics; |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2009017&r=evo |
| By: | Reuben, Ernesto (Northwestern University); Suetens, Sigrid (Tilburg University) |
| Abstract: | We use a novel experimental design to disentangle strategically- and non-strategically-motivated cooperation. By using contingent responses in a repeated sequential prisoners' dilemma with a known probabilistic end, we differentiate end-game behavior from continuation behavior within individuals while controlling for expectations. This design allows us to determine the extent to which strategically-cooperating individuals are responsible for the so-called end-game effect. Experiments with two different subject pools indicate that the most common motive for cooperation in repeated games is strategic and that the extent to which end-game effects are driven by strategically-cooperating individuals depends on the profitability of cooperation. |
| Keywords: | reputation building, strong reciprocity, conditional cooperation, strategic cooperation |
| JEL: | C91 D01 D74 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4107&r=evo |
| By: | Matthias Sutter; Peter Lindner; Daniela Platsch |
| Abstract: | This paper examines the influence of third-party observation and third-party reward on behavior in an experimental prisoner’s dilemma (PD) game. Whereas the existing literature on third-party intervention as a means to sustain social norms has dealt almost exclusively with third-party punishment, we show that both third-party observation and third-party reward have positive effects on cooperation rates, compared to a treatment where no third party is involved. Third-party reward is more effective in increasing cooperation than third-party observation. However, rewards are given too late to prevent a steady downward trend of cooperation rates. |
| Keywords: | Social norms, third-party reward, third-party observation, prisoner’s dilemma experiment |
| JEL: | C72 C91 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2009-08&r=evo |
| By: | J. Stan Metcalfe; John Foster (School of Economics, The University of Queensland) |
| Abstract: | We begin by outlining competing stylised facts about economic growth and then set out the relations between structural change and aggregate productivity growth contingent on the evolution of the pattern of demand. We then introduce the concept of an industry level technical progress function and show how rates of technical progress are mutually determined as a consequence of increasing returns and the changing distribution of demand. We next sketch a macroeconomic closure of the evolutionary process, expressed in terms of the mutual determination of rates of capital accumulation and rates of productivity growth. In the final section we elaborate upon the restless nature of innovation-based economic growth and the conditions under which Nicholas Kaldor’s stylised facts are compatible with the Clark-Kuznets stylised facts. We may summarise our perspective quite sharply. What distinguishes modern capitalism is not only its order imposing properties that lead to the self organisation of the economy, but also the self transforming properties that create wealth from knowledge and, in so doing, induce the further development of useful knowledge. The manner in which self-organisation and self-transformation interact in terms of adjustments to the composition of demand, as well as the structure of technology and production, is at the core of this essay |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:388&r=evo |
| By: | Abigail Barr; Chris Wallace; Jean Ensminger; Joseph Henrich; Clark Barrett; Alexander Bolyanatz; Juan Camilo Cardenas; Michael Gurven; Edwins Gwako; Carolyn Lesorogol; Frank Marlowe; Richard McElreath; David Tracer; John Ziker |
| Abstract: | Data from three bargaining games - the Dictator Game, the Ultimatum Game, and the Third-Party Punishment Game - played in 15 societies are presented. The societies range from US undergraduates to Amazonian, Arctic, and African hunter-gatherers. Behaviour within the games varies markedly across societies. The paper investigates whether this behavioural diversity can be explained solely by variations in inequality aversion. Combining a single parameter utility function with the notion of subgame perfection generates a number of testable predictions. While most of these are supported, there are some telling divergencies between theory and data: uncertainty and preferences relating to acts of vengeance may have influenced play in the Ultimatum and Third-Party Punishment Games; and a few subjects used the games as an opportunity to engage in costly signalling. |
| Keywords: | Bargaining games, Cross-cultural experiments, Inequality aversion |
| JEL: | C72 C9 Z13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:422&r=evo |