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on Evolutionary Economics |
| By: | Hanauske, Matthias; Kunz, Jennifer; Bernius, Steffen; König, Wolfgang |
| Abstract: | The last financial and economic crisis demonstrated the dysfunctional long-term effects of aggressive behaviour in financial markets. Yet, evolutionary game theory predicts that under the condition of strategic dependence a certain degree of aggressive behaviour remains within a given population of agents. However, as the consequences of the financial crisis exhibit, it would be desirable to change the 'rules of the game' in a way that prevents the occurrence of any aggressive behaviour and thereby also the danger of market crashes. The paper picks up this aspect. Through the extension of the in literature well-known Hawk-Dove game by a quantum approach, we can show that dependent on entanglement, also evolutionary stable strategies can emerge, which are not predicted by classical evolutionary game theory and where the total economic population uses a non aggressive quantum strategy. |
| Keywords: | Evolutionary game theory; financial crisis; hawk-dove game; quantum game theory |
| JEL: | D53 A13 C02 C70 Z13 C73 |
| Date: | 2009–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14680&r=evo |
| By: | Abigail Barr; Chris Wallace; Jean Ensminger; Juan Camilo Cárdenas |
| 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 divergences 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. |
| Date: | 2009–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:005427&r=evo |
| By: | André Lorentz |
| Abstract: | This paper proposes to identify the micro-level sources for the dynamic increasing returns occurring at an aggregate level. The paper reverts to a micro model of technological change in-line with the evolutionary literature on industrial dynamics. The data generated through numerical simulations are used to identify the sources of increasing returns as measured by the Kaldor-Verdoorn Law. In this respect we also aim to provide some plausible micro-foundations to this Law. The paper shows that: (i) Dynamic increasing returns appear as an emergent property of the model; (ii) micro-characteristics of technical change, as the amplitude and the frequency of changes, as well as selection mechanisms significantly shape these increasing returns. |
| Keywords: | Dynamic increasing returns, Kaldor-Verdoorn Law, technical change, evolutionary modelling Length 31 pages |
| JEL: | B52 L11 O31 O33 O40 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2009-01&r=evo |
| By: | Robert S. Gazzale (Williams College); Lina Walker |
| Abstract: | We conduct a neutral-context laboratory experiment to systematically investigate the role of the hit-by-bus concern in explaining the annuitization puzzle: the low rate of retirement-asset annuitization relative to the predictions of standard models. We vary endowed asset (annuity vs. stock of wealth vs. no explicit endowment), and find a strong endowment effect. Furthermore, we find that the ordering of survival risks matters. Compared to a frame in which a single draw from a known distribution determines survival outcome, annuity choice is lower when subjects must sequentially survive early periods to reach periods in which the annuity dominates. We conclude with policy implications. |
| Keywords: | experimental economics, behavioral, retirement, annuities |
| JEL: | C91 D14 D81 G22 J26 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2009-02&r=evo |
| By: | Khan, Hayat |
| Abstract: | Taking note of the wide variety and growing list of models in the literature to explain patterns of behavior observed in laboratory experiments, this paper identifies two tests, the Variety Test (ability of a model to explain outcomes under variety or alternative scenarios) and the Psychological Test (ability of a model to conform to psychological intuition), that can be used to judge any model of other regarding preferences. It is argued that for a mathematical model to qualify as a social welfare function, it must simultaneously pass the two tests. It is shown that none of the models proposed to date passes these two tests simultaneously. The paper proposes a generalized model of inequity aversion which parsimoniously explains interior solution in the dictator game and dynamics of outcomes in other games. The paper postulates that ones idea of equitable distribution is state dependent where the state is determined by psychological and structural parameters. The state could be fair, superior or inferior. Individuals in a fair state have zero equity-bias and split the pie evenly. Those in a superior (inferior) state have positive (negative) equity-bias and value more (less) than fair distribution as equitable distribution. Given psychological tendencies of an individual, every experimental design/structure assigns one of the three states to players which lead to individual specific valuation of equity. Prediction about outcomes across different experiments and designs can be made through predicting its impact on equity-bias. All aspects of an individual’s behavior, such as altruism, fairness, reciprocity, self-serving bias, kindness, intentions etc, manifest itself in equity-bias. The model therefore is all-encompassing. |
| Keywords: | Experimental Economics; Social Preferences; Other Regarding Preferences; Inequity aversion |
| JEL: | D63 A13 C92 C0 D64 C91 |
| Date: | 2009–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14701&r=evo |