nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2009‒09‒11
six papers chosen by
Matthew Baker
City University of New York

  1. The Effect of Motivations on Social Indirect Reciprocity: an Experimental Analysis By Luca Stanca; Luigino Bruni; Marco Mantovani
  2. Mental Equilibrium and Rational Emotions By Eyal Winter; Ignacio Garcia-Jurado; Jose Mendez-Naya; Luciano Mendez-Naya
  3. Disparity, Shortfall, and Twice-Endogenous HARA Utility By Walker, Todd; Haley, M. Ryan; McGee, M. Kevin
  4. Schumpeter on money, banking and finance: An institutionalist perspective By Agnès Festré; Eric Nasica
  5. Transitive Regret By Sushil Bikhchandani; Uzi Segal
  6. Culture Values Entrepreneurship and Growth By Jellal, Mohamed

  1. By: Luca Stanca; Luigino Bruni; Marco Mantovani
    Abstract: This paper investigates the effects of motivations on the perceived kindness of an action within the context of strong social indirect reci- procity. We test experimentally the hypothesis that, for a given dis- tributional outcome, an action is perceived by a third party to be less kind if it can be strategically motivated. The results do not support this hypothesis: social indirect reciprocity is indeed found to be signif- icantly stronger when strategic motivations cannot be ruled out. We interpret these findings as an indication of the role played by team reasoning in explaining reciprocal behavior.
    Keywords: Indirect Reciprocity, Motivations, Social Preferences, Laboratory Experiments
    JEL: D63 C78 C91
    Date: 2009–08
  2. By: Eyal Winter; Ignacio Garcia-Jurado; Jose Mendez-Naya; Luciano Mendez-Naya
    Abstract: We introduce emotions into an equilibrium notion. In a mental equilibrium each player "selects" an emotional state which determines the player's preferences over the outcomes of the game. These preferences typically differ from the players' material preferences. The emotional states interact to play a Nash equilibrium and in addition each player's emotional state must be a best response (with respect to material preferences) to the emotional states of the others. We discuss the concept behind the definition of mental equilibrium and show that this behavioral equilibrium notion organizes quite well the results of some of the most popular experiments in the experimental economics literature. We shall demonstrate the role of mental equilibrium in incentive mechaisms and will discuss the concept of collective emotions, which is based on the idea that players can coordinate their emotional states.
    Date: 2009–09
  3. By: Walker, Todd; Haley, M. Ryan; McGee, M. Kevin
    Abstract: We demonstrate that shortfall-minimizing portfolio selection based on the Cressie- Read family of divergence measures maps to the HARA family. This means that all HARA utility functions can be interpreted as “endogenous” in the sense described in Stutzer (2003), and that traditional HARA expected utility maximization has an analog to the behavioral notion that an investor seeks to organize their selection of assets to minimize the probability of realizing a return below some pre-determined target or benchmark rate. We show that not only do risk aversion parameters arise endogenously, given the choice set, but that the type of risk aversion, relative or constant, is also determined endogenously. We also connect this approach to portfolio selection to some topics in behavioral economics.
    Keywords: Entropy; Measure Change; Cressie-Read; Endogenous Utility; Benchmark
    JEL: G11
    Date: 2009–09–06
  4. By: Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis); Eric Nasica (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: In this paper, we provide an institutional interpretation of Schumpeter's analysis of money, banking and finance. This interpretation is founded on an overall investigation into Schumpeter's writings addressing those issues from different perspectives.In section 1, we discuss the widespread evolutionist interpretation of Schumpeter and rather assert an institutionalist perspective. In support of our interpretation, we highlight the specific role played by economic sociology in Schumpeter's methodological approach. Economic sociology, indeed, provides the foundations of a theory of institutions and institutional change, which is often undermined by the usual evolutionary interpretation. We believe, however, that taking this dimension seriously into account may have implications for our understanding of economic and institutional change in Schumpeter. Section 2 illustrates this general statement by focusing on Schumpeter's analysis of money, banking and finance, and their respective roles in the process of economic development.
    Keywords: Schumpeter; Money; Credit, Financial system, Institutional change; Economic sociology
    Date: 2009
  5. By: Sushil Bikhchandani (UCLA); Uzi Segal (Boston College)
    Abstract: Preferences may arise from regret, i.e., from comparisons with alternatives forgone by the decision maker. We ask whether regret-based behavior is consistent with non-expected utility theories of transitive choice. We show that the answer is no. If choices are governed by ex ante regret and elation then non-expected utility preferences must be intransitive.
    Keywords: transitivity, regret
    Date: 2009–09–04
  6. By: Jellal, Mohamed
    Abstract: We integrate a social norm which associates status to accumulation of capital and consumption into a simple model of endogenous growth. We show that societies which place a greater weight of cultural values on stock of accumulated capital as opposed to consumption will experience fast growth. Our results are consistent with those obtained by Baumol (1990) in the context of entrepreneurship and by Fershtman and Weiss (1991).
    Keywords: Entrepreneurship;Culture Values;Social Status;Growth
    JEL: O1 A13 Z13
    Date: 2009–09–03

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