nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒02‒27
seven papers chosen by
Matthew Baker
City University of New York

  1. Organization, learning and cooperation. By Barr, Jason; Saraceno, Francesco
  2. Breaking the norm: An empirical investigation into the unraveling of good behavior By Hill, Ruth Vargas; Maruyama, Eduardo; Viceisza, Angelino
  3. Trust, Information Acquisition and Financial Decisions: A Field Experiment By Sonia Di Giannatale; Alexander Elbittar; Patricia López Rodriguez; María José Roa
  4. Intrinsic Motivations and the Non-Profit Health Sector: Evidence from Ethiopia By Serra, Danila; Serneels, Pieter; Barr, Abigail
  5. The Complexity Era in Economics By David Colander; Richard P.F. Holt; J. Barkley Rosser
  6. Genes, economics, and happiness By Jan-Emmanuel De Neve; James H. Fowler; Bruno S. Frey
  7. Dialects, Cultural Identity, and Economic Exchange By Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Suedekum, Jens

  1. By: Barr, Jason; Saraceno, Francesco (Centre de recherche en économie de Sciences Po)
    Abstract: This paper models the organization of the firm as a type of artificial neural network in a duopoly setting. The firm plays a repeated Prisoner’s Dilemma type game, and must also learn to map environmental signals to demand parameters and to its rival’s willingness to cooperate. We study the prospects for cooperation given the need for the firm to learn the environment and its rival’s output. We show how profit and cooperation rates are affected by the sizes of both firms, their willingness to cooperate, and by environmental complexity. In addition, we investigate equilibrium firm size and cooperation rates.
    Keywords: Artificial neural networks;; Prisoner’s Dilemma;; Cooperation;; Firm learning;
    JEL: C63 C72 D21 D83 L13
    Date: 2009–05
  2. By: Hill, Ruth Vargas; Maruyama, Eduardo; Viceisza, Angelino
    Abstract: We present results from an artefactual field experiment conducted in rural Peru that considers how observing nonreciprocal behavior influences an individual's decision to reciprocate. Specifically, we consider the behavior of second movers in a trust game, assessing how their decision to reciprocate is influenced by the observed behavior of others and the extent to which their actions can be observed. In documenting how an external shock to the number observed not to reciprocate influences reciprocation, the paper endeavors to provide some insight into how reciprocity can unravel when individuals are learning behavior in a new market institution.
    Keywords: artefactual field experiment, norms, nonreciprocal behavior, Trust, Markets, Institutions,
    Date: 2010
  3. By: Sonia Di Giannatale (Centro de Investigación y Docencia Económicas); Alexander Elbittar (Centro de Investigación y Docencia Económicas); Patricia López Rodriguez (Universidad Iberoamericana); María José Roa (Centro de Investigación y Docencia Económicas)
    Abstract: In this paper we analyze the relationship between financial decisions, information acquisition, and trust. In particular, our hypothesis is that financial transactions depend, among other variables, on the level of trust, reciprocity and association among individuals. Also, individuals’ willingness to acquire and process information relevant to perform financial transactions is related not only to their cognitive abilities, but also to the level of trust they have in the financial institutions. We conducted a field experiment using the trust game, with two important variations, with the partners of an of credit and savings cooperative located in a rural area of México. Our results indicate that those individuals who frequently visit their friends show greater willingness to trust other individuals. In contrast, those individuals who visit their families more regularly show less willingness to reciprocate, while active members of the cooperative show greater reciprocity. Regarding the acquisition of information, we find that just over 2/3 of the participants buy the maximum of pieces of information. However, none of the pieces of information acquired appears to affect the transfers among participants. Possibly for our experimental subjects trust plays an overextended role in financial decision making that makes information acquisition less relevant than it is for other types of individuals making the same sort of decisions.
    Keywords: Social Networks, Information, Social Preferences, Cooperation, Trust, Reciprocity, Financial Development, Field Experiments
    Date: 2010–02–17
  4. By: Serra, Danila (Florida State University); Serneels, Pieter (University of East Anglia); Barr, Abigail (University of Oxford)
    Abstract: Economists have traditionally assumed that individual behavior is motivated exclusively by extrinsic incentives. Social psychologists, in contrast, stress that intrinsic motivations are also important. In recent work, economic theorists have started to build psychological factors, like intrinsic motivations, into their models. Besley and Ghatak (2005) propose that individuals are differently motivated in that they have different "missions," and their self-selection into sectors or organizations with matching missions enhances organizational efficiency. We test Besley and Ghatak's model using data from a unique cohort study. We generate two proxies for intrinsic motivations: a survey-based measure of the health professionals’ philanthropic motivations and an experimental measure of their pro-social motivations. We find that both proxies predict health professionals' decision to work in the non-profit sector. We also find that philanthropic health workers employed in the non-profit sector earn lower wages than their colleagues.
    Keywords: sector choice, intrinsic motivation, non-profit
    JEL: C93 I11 J24
    Date: 2010–02
  5. By: David Colander; Richard P.F. Holt; J. Barkley Rosser
    Abstract: This article argues that the neoclassical era in economics has ended and is being replaced by a new era. What best characterizes the new era is its acceptance that the economy is complex, and thus that it might be called the complexity era. The complexity era has not arrived through a revolution. Instead, it has evolved out of the many strains of neoclassical work, along with work done by less orthodox mainstream and heterodox economists. It is only in its beginning stages. The article discusses the work that is forming the foundation of the complexity era, and how that work will likely change the way in which we understand economic phenomena and the economics profession.
    Date: 2010–01
  6. By: Jan-Emmanuel De Neve; James H. Fowler; Bruno S. Frey
    Abstract: Research on happiness has produced valuable insights into the sources of subjective well-being. A major finding from this literature is that people exhibit a 'baseline' happiness that shows persistent strength over time, and twin studies have shown that genes play a significant role in explaining the variance of baseline happiness between individuals. However, these studies have not identified which genes might be involved. This article presents evidence of a specific gene that predicts subjective well-being. Using data from the National Longitudinal Study of Adolescent Health, we show that individuals with a transcriptionally more efficient version of the serotonin transporter gene (5HTT) are significantly more likely to report higher levels of life satisfaction. Having one or two alleles of the more efficient type raises the average likelihood of being very satisfied with one's life by 8.5% and 17.3%, respectively. This result may help to explain the stable component of happiness and suggests that genetic association studies can help us to better understand individual heterogeneity in subjective well- being.
    Keywords: Happiness, subjective well-being, genetics
    JEL: A12 Z00
    Date: 2010–02
  7. By: Falck, Oliver (Ifo Institute for Economic Research); Heblich, Stephan (Max Planck Institute for Economics); Lameli, Alfred (University of Marburg); Suedekum, Jens (University of Duisburg-Essen)
    Abstract: We investigate whether time-persistent cultural borders impede economic exchange across regions of the same country. To measure cultural differences we evaluate, for the first time in economics, linguistic micro-data about phonological and grammatical features of German dialects. These data are taken from a unique linguistic survey conducted between 1879 and 1888 in 45,000 schools. Matching this information to 439 current German regions, we construct a dialect similarity matrix. Using a gravity analysis, we show that current cross-regional migration is positively affected by historical dialect similarity. This suggests that cultural identities formed in the past still influence economic exchange today.
    Keywords: gravity, internal migration, culture, language, dialects, Germany
    JEL: R23 Z10 J61
    Date: 2010–02

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