nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒04‒17
ten papers chosen by
Matthew Baker
City University of New York

  1. Caste and punishment: the legacy of caste culture in norm enforcement By Karla Hoff; Mayuresh Kshetramade; Ernst Fehr
  2. Dynamic Systems of Social Interactions By Ulrich Horst
  3. "Voluntarily Separable Repeated Games with Social Norms" By Takako Fujiwara-Greve; Masahiro Okuno-Fujiwara; Nobue Suzuki
  4. Economics and Rationality of organizations: an approach to the work of Herbert A. Simon By Estrada, Fernando
  5. The Geography of Internet Infrastructure: An evolutionary simulation approach based on preferential attachment By Sandra Vinciguerra; Koen Frenken; Marco Valente
  6. Efficiency and Equilibrium in Trial and Error Learning By Bary S.R. Pradelski; H. Peyton Young
  7. Larger groups may alleviate collective action problems By Sung Ha Hwang
  8. Asymmetric Enforcement of Cooperation in a Social Dilemma By Nikos Nikiforakis; Hans-Theo Normann; Brian Wallace
  9. Economics and Religion By Chiswick, Carmel U.
  10. Modeling Institutional Evolution By Bilin Neyapti

  1. By: Karla Hoff; Mayuresh Kshetramade; Ernst Fehr
    Abstract: Well-functioning groups enforce social norms that restrain opportunism, but the social structure of a society may encourage or inhibit norm enforcement. Here we study how the exogenous assignment to different positions in an extreme social hierarchy – the caste system – affects individuals’ willingness to punish violations of a cooperation norm. Although we control for individual wealth, education, and political participation, low caste individuals exhibit a much lower willingness to punish norm violations that hurt members of their own caste, suggesting a cultural difference across caste status in the concern for members of one’s own community. The lower willingness to punish may inhibit the low caste’s ability to sustain collective action and so may contribute to its economic vulnerability.
    Keywords: Social norms, informal sanctions, third party punishment, endogenous social preferences, social exclusion, collective action, caste
    JEL: D02 D64
    Date: 2010–02
  2. By: Ulrich Horst
    Abstract: We state conditions for existence and uniqueness of equilibria in evolu- tionary models with an infinity of locally and globally interacting agents. Agents face repeated discrete choice problems. Their utility depends on the actions of some designated neighbors and the average choice throughout the whole population. We show that the dynamics on the level of aggregate be- havior can be described by a deterministic measure-valued integral equation. If some form of positive complementarities prevails we establish convergence and ergodicity results for aggregate activities. We apply our convergence re- sults to study a class of population games with random matching.
    Keywords: evolutionary dynamics, social interaction, equilibrium, interacting particle systems, coordination games
    JEL: C63 D50 D71
    Date: 2010–02
  3. By: Takako Fujiwara-Greve (Department of Economics, Keio University); Masahiro Okuno-Fujiwara (Faculty of Economics, University of Tokyo); Nobue Suzuki (Faculty of Economics, Komazawa University)
    Abstract: We extend the voluntarily separable repeated Prisoner's Dilemma (Fujiwara-Greve and Okuno-Fujiwara, 2009) to continuous actions. We show that there is a (constrained) efficient bimorphic equilibrium which is robust under evolutionary pressure. It consists of a cooperative strategy and a myopic defection strategy so that our model provides a foundation to incomplete information models as well.
    Date: 2010–02
  4. By: Estrada, Fernando
    Abstract: One of the main achievements of Herbert A. Simon in organizational theory is analytically evaluating the psychology of individual and collective behavior thus opening the ground for further research D. Kahneman, and T. Schelling. This article provides an assessment of the contributions of Simon's theory of organizations with special emphasis on the criterion of bounded rationality. It is interpreted Simon's criticism of the orthodox version of organizational bureaucracy and extends his analysis to the new institutional economics.
    Keywords: Economic theory; organizations; Herbert Simon; bounded rationality; Kahneman; Schelling; decision theory.
    JEL: B10 A1 B4 G3 B15 L2 D8 C72 D81 B1 C7 A10 G30 D0 D7 B41
    Date: 2010–04–01
  5. By: Sandra Vinciguerra; Koen Frenken; Marco Valente
    Abstract: We model the evolution of infrastructure networks as a preferential attachment process. We assume that geographical distance and country borders provide barriers to link formation in infrastructure networks. The model is validated against empirical data on the European Internet infrastructure network covering 209 cities. We successfully simulate the average path length and average clustering coefficient of the observed network. Furthermore, the simulated network shows a significant correlation with the observed European Internet infrastructure network. We end with a discussion on the future uses of preferential attachment models in the light of the literature on world cities and global cities.
    Keywords: internet infrastructure, network, simulation, preferential attachment
    JEL: C63 O18 R1 L96
    Date: 2010–04
  6. By: Bary S.R. Pradelski; H. Peyton Young
    Abstract: In trial and error learning, agents experiment with new strategies and adopt them with a probability that depends on their realized payoffs. Such rules are completely uncoupled, that is, each agent’s behaviour depends only on his own realized payoffs and not on the payoffs or actions of anyone else. We show that by modifying a trial and error learning rule proposed by Young (2009) we obtain a completely uncoupled learning process that selects a Pareto optimal equilibrium whenever a pure equilibrium exists. When a pure equilibrium does not exist, there is a simple formula that relates the long-run likelihood of each disequilibrium state to the total payoff over all agents and the maximum payoff gain that would result from a unilateral deviation by some agent. This welfare/stability trade-off criterion provides a novel framework for analyzing the selection of disequilibrium as well as equilibrium states in finite n-person games.
    Date: 2010
  7. By: Sung Ha Hwang (University of Massachusetts Amherst)
    Abstract: This paper shows how larger group size can enhance punishing behavior in social dilemmas and hence support higher levels of cooperation. We focus on describing conflict technology using Lanchester's equations and study the role of "collectivity" of punishment to support cooperation in large groups. The main results suggest that as long as defectors are, even slightly, less "collective" than punishers, Lanchester's law can be applied to show that a smaller proportion of punishers can successfully eliminate defectors as the size of the population increases. JEL Categories:
    Keywords: Collective action, group size, collective punishment, Lanchester's law
    Date: 2009–06
  8. By: Nikos Nikiforakis (Department of Economics, The University of Melbourne); Hans-Theo Normann (Department of Economics, Goethe University Frankfurt); Brian Wallace (Department of Economics & ELSE, University College London)
    Abstract: We use a public-good experiment to analyze behavior in a decentralized asymmetric punishment institution. The institution is asymmetric in the sense that players differ in the effectiveness of their punishment. At the aggregate level, we observe remarkable similarities between outcomes in asymmetric and symmetric punishment institutions. Controlling for the average punishment effectiveness of the institutions, we find that asymmetric punishment institutions are as effective in fostering cooperation and as efficient as symmetric institutions. At the individual level, we find that players with higher punishment effectiveness contribute similar amounts to the public account, but have higher earnings and punish more than their weak counterparts.
    JEL: C92 D70 H41
    Date: 2009–06
  9. By: Chiswick, Carmel U. (University of Illinois at Chicago)
    Abstract: This paper provides an overview of the relationship between economics and religion. It first considers the effects of economic incentives in the religious marketplace on consumers’ demand for "religion." It then shows how this demand affects religious institutions and generates a supply of religious goods and services. Other topics include the structure of this religious marketplace and the related "marketplace for ideas" in a religiously pluralistic society. Empirical evidence is summarized for the effects on selected economic behaviors of religious affiliation and intensity of belief or practice.
    Keywords: economics, religion, human capital
    JEL: Z12
    Date: 2010–04
  10. By: Bilin Neyapti (Bilkent University)
    Abstract: This paper proposes an original formal framework to analyze institutional evolution. Institutions have formal (F) and informal (N) aspects that may evolve at different paces, although eventually converging towards each other through an dynamic interactive process. N evolves with capital accumulation, as in learning by doing, and F is optimally chosen by the government who maximizes output given the social and political costs of changing F. As transaction-cost-reducing mechanisms, F and N together define the production technology and affect the income level. As consistent with the evidence, calibrations of the model reveal that optimum F exhibits a punctuated equilibra.
    Keywords: Institutional evolution, punctuated equilibria, growth
    JEL: O17 O43
    Date: 2010–04

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