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on Evolutionary Economics |
| By: | Gary Bornstein; Ori Weisel |
| Abstract: | Explaining human cooperation in large groups of non-kin is a major challenge to both rational choice theory and the theory of evolution. Recent research suggests that group cooperation can be explained assuming that cooperators can punish non-cooperators or cheaters. The experimental evidence comes from economic games in which group members are informed about the behavior of all others and cheating occurs in full view. We demonstrate that under more realistic information conditions, where cheating is less obvious, punishment is ineffective in enforcing cooperation. Evidently, the explanatory power of punishment is constrained by the visibility of cheating. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp528&r=evo |
| By: | Ronald Hochreiter |
| Abstract: | In this note, we extend an evolutionary stochastic portfolio optimization framework to include probabilistic constraints. Both the stochastic programming-based modeling environment as well as the evolutionary optimization environment are ideally suited for an integration of various types of probabilistic constraints. We show an approach on how to integrate these constraints. Numerical results using recent financial data substantiate the applicability of the presented approach. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1001.5421&r=evo |
| By: | Armstrong, Mark; Huck, Steffen |
| Abstract: | We discuss the literatures on behavioral economics, bounded rationality and experimental economics as they apply to firm behavior in markets. Topics discussed include the impact of imitative and satisficing behavior by firms, outcomes when managers care about their position relative to peers, the benefits of employing managers whose objective diverges from profit-maximization (including managers who are overconfident or base pricing decisions on sunk costs), the impact of social preferences on the ability to collude, and the incentive for profit-maximizing firms to mimic irrational behavior. |
| Keywords: | Behavioral economics; bounded rationality; experimental economics; oligopoly; antitrust |
| JEL: | D21 C92 D43 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20356&r=evo |
| By: | Costa-Gomes, Miguel A. (University of Aberdeen); Huck, Steffen (University College London); Weizsäcker, Georg (University College London) |
| Abstract: | In many economic contexts, an elusive variable of interest is the agent's expectation about relevant events, e.g. about other agents' behavior. Recent experimental studies as well as surveys have asked participants to state their beliefs explicitly, but little is known about the causal relation between beliefs and other behavioral variables. This paper discusses the possibility of creating exogenous instrumental variables for belief statements, by shifting the probabilities of the relevant events. We conduct trust game experiments where the amount sent back by the second player (trustee) is exogenously varied by a random process, in a way that informs only the first player (trustor) about the realized variation. The procedure allows detecting causal links from beliefs to actions under plausible assumptions. The IV estimates indicate a significant causal effect, comparable to the connection between beliefs and actions that is suggested by OLS analyses. |
| Keywords: | social capital, trust game, instrumental variables, belief elicitation |
| JEL: | C72 C81 C91 D84 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4709&r=evo |
| By: | Josef Hofbauer (Department of Mathematics, University of Vienna - Universität Wien); Sylvain Sorin (EC - Equipe de Combinatoire - CNRS : UMR7090 - Université Pierre et Marie Curie - Paris VI, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Yannick Viossat (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - CNRS : UMR7534 - Université Paris Dauphine - Paris IX) |
| Abstract: | Using an explicit representation in terms of the logit map we show, in a unilateral framework, that the time average of the replicator dynamics is a perturbed solution of the best reply dynamics. |
| Keywords: | replicator dynamics; best reply dynamics; logit map; perturbed differential inclusion; internally chain transitive set; attractor |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00360767_v1&r=evo |
| By: | Sutter, Matthias (Department of Economics, School of Business, Economics and Law, Göteborg University); Czermak, Simon (Department of Public Finance, University of Innsbruck); Feri, Francesco (Department of Public Finance, University of Innsbruck) |
| Abstract: | We present an experiment on strategic thinking and behavior of individuals and teams in oneshot normal-form games. Besides making choices, decision makers have to state their firstand second-order beliefs. We find that teams play the Nash strategy significantly more often, and their choices are more often consistent by being a best reply to first order beliefs. We identify the complexity of a game and the payoffs in equilibrium as determining the likelihood of consistent behavior according to textbook rationality. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals.<p> |
| Keywords: | Strategic sophistication; beliefs; experiment; team decision making; individual decision making |
| JEL: | C72 C91 C92 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0430&r=evo |
| By: | Anja Klaubert (Institute of Economics, Leuphana University of Lüneburg, Germany) |
| Abstract: | In the Neoclassical growth model the saving ratio and human capital might be seen as the most important factors fostering economic growth. At last since Weber [2005 (1904/05)] it seems clear, that religious beliefs and involvement shapes both social and economic human behavior. This paper tests the hypothesis whether religious belonging and believing influence a household’s economic decision-making in the USA, which was found to foster economic growth, namely the saving ratio at the individual level. Using data from the Panel Study of Income Dynamics (PSID), we find religious effects on saving. Regarding the decision to save money no large differences within the Christian religions, namely Protestants and Catholics, were found. However, large differences exist compared to non-religious people as well as to Non-Christians and Jews. |
| Keywords: | growth, religion, individual saving behavior |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:162&r=evo |
| By: | Fernández-Villaverde, Jesús (University of Pennsylvania); Greenwood, Jeremy (University of Pennsylvania); Guner, Nezih (Universitat Autònoma de Barcelona) |
| Abstract: | Societies socialize children about many things, including sex. Socialization is costly. It uses scarce resources, such as time and effort. Parents weigh the marginal gains from socialization against its costs. Those at the lower end of the socioeconomic scale indoctrinate their daughters less than others about the perils of premarital sex, because the latter will lose less from an out-of-wedlock birth. Modern contraceptives have profoundly affected the calculus for instilling sexual mores, leading to a de-stigmatization of sex. As contraception has become more effective there is less need for parents, churches and states to inculcate sexual mores. Technology affects culture. |
| Keywords: | children, church and state, contraception, culture, parents, premarital sex, out-of-wedlock births, socialization, stigmatization, technological progress |
| JEL: | D1 J11 J12 J13 E1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4708&r=evo |
| By: | Juan Camilo Cárdenas |
| Abstract: | Behavior in the local commons is usually embedded in a context of regulations and social norms that the group of users face. Such norms and rules affect how individuals value material and non-material incentives and therefore determine their decision to cooperate or over extract the resources from the common-pool. This paper discusses the importance of social norms in shaping behavior in the commons through the lens of experiments, and in particular experiments conducted in the field with people that usually face these social dilemmas in their daily life. Through a large sample of experimental sessions with around one thousand people between villagers and students, I test some hypothesis about behavior in the commons when regulations and social norms constrain the choices of people. The results suggest that people evaluate several components of the intrinsic and material motivations in their decision to cooperate. While responding in the expected direction to a imperfectly monitored fine on over extraction, the expected cost of the regulation is not a sufficient explanatory factor for the changes in behavior by the participants in the experiments. Even with zero cost of violations, people can respond positively to an external regulator that issues a normative statement about a rule that is aimed at solving the social dilemma. |
| Date: | 2009–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:006650&r=evo |