nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒05‒22
seven papers chosen by
Matthew Baker
City University of New York

  1. Contracting under Reciprocal Altruism By Shchetinin, Oleg
  2. The limits of self-governance when cooperators get punished: Experimental evidence from urban and rural Russia By Simon Gaechter; Benedikt Herrmann
  3. Cooperation and Punishment under Uncertain Enforcement By Sergio Sousa
  4. The Impact of the Subgroup Structure on the Evolution of Networks: An Economic Model of Network Evolution By Kibae Kim; Jorn Altmann; Junseok Hwang
  5. Religious Organizations By Gilat Levy; Ronny Razin
  6. Lab Labor: What Can Labor Economists Learn from the Lab? By Charness, Gary; Kuhn, Peter J.
  7. The Collective Action Problem: Within-Group Cooperation and Between-Group Competition in a Repeated Rent-Seeking Game By Cheikbossian, Guillaume

  1. By: Shchetinin, Oleg
    Abstract: I develop a model of reciprocal altruism which accounts for some evidence in contracting situations, which are paradoxical from the point of view of neoclassical contract theory with selfish actors. My model predicts the crowding-out effect, observed in the Trust Game with the possibility of a fine; for the Control Game the model predicts that an equilibrium can exhibit ”no effect of control”, ”hidden cost of control”, or ”positive effect of control”, depending on the characteristics of the actors, as observed in the experiments. This suggests that reciprocal altruism modeling could be fruitful more generally in applications of contract theory.
    Keywords: contract theory, signaling, behavioral economics
    JEL: D82 M54
    Date: 2009–08
  2. By: Simon Gaechter (University of Nottingham); Benedikt Herrmann (University of Nottingham)
    Abstract: We report evidence from public goods experiments with and without punishment which we conducted in Russia with 566 urban and rural participants of young and mature age cohorts. Russia is interesting for studying voluntary cooperation because of its long history of collectivism, and a huge urban-rural gap. In contrast to previous experiments we find no cooperation-enhancing effect of punishment. An important reason is that there is punishment of contributors in all four subject pools. Thus, punishment can also undermine the scope for self-governance in the sense of high levels of voluntary cooperation that are sustained by sanctioning free riders only.
    Keywords: social norms, free riding, misdirected punishment, experiments
    Date: 2010–04
  3. By: Sergio Sousa (School of Economics, University of Nottingham)
    Abstract: This paper investigates the efficacy of a punishment mechanism in promoting cooperative behaviour in a public goods game when enforcement of punishment is uncertain. Experimental studies have found that a sanctioning system can induce individuals to adopt behaviour deemed as socially acceptable. Yet, our experiment shows that a sanctioning system cannot promote cooperative behaviour if enforcement is a low-probability event and free-riding behaviour is not often punished. This supports the view that punishment needs to be exercised to be feared, otherwise the simple threat of it cannot be effective in promoting cooperation.
    Keywords: uncertain enforcement; public good game; altruistic punishment; decisionmaking under uncertainty; cooperation
    Date: 2010–04
  4. By: Kibae Kim; Jorn Altmann; Junseok Hwang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: One of the most important properties of self-organized networks is their scale-free property. Prior research proved empirically and theoretically that scale-free networks emerge under the preferential attachment rule. However, a few empirical studies also show that empirical networks diverge from the structure of scale-free networks. Empirical networks exhibit a lower exponent of the power law distribution than constructed scale-free networks. Our research aims at establishing a simple evolutionary network model that explains this difference. The results of our model suggest that there are two reasons for this discrepancy. First, as already known, additional links between existing nodes distort the scale-free feature. Second, boundaries between subgroups (groups of network nodes) distort the degree distribution. In general, we believe that our evolutionary model may be applicable not only to describe the structural evolution of networks but also to make network design recommendations in a variety of areas such as WWW-hyperlink networks, business collaboration networks, Peer-To-Peer Networks, and Web2.0 service networks.
    Keywords: Social Network Analysis, Scale-Free Networks, Self-Organization, Evolutionary Model, Network Design, Network Science, Network Modeling.
    JEL: C02 C15 C65 D02 D85 L11 L14 L86 M21
    Date: 2010–03
  5. By: Gilat Levy (LSE); Ronny Razin (LSE)
    Abstract: We propose a model of religious organizations which relies on the ability of such organi-zations and personal utility shocks. We show how religious organizations arise endogenously and characterize their features. Specifically, we find that members of the religious organization share similar beliefs and are more likely to cooperate with one another in social interactions. We identify a "spiritual" as well as a "material" payoff for members of the religious organization. Our results explain and shed light on empirical phenomena such as the effects of secularization and economic development on religious beliefs and participation, the relation between the size of the religion and the intensity of its members’ beliefs, religious segregation and religious conflicts.
    Keywords: Economics of Religion, Religion, Organizations, Beliefs
    JEL: L30 D71
    Date: 2010–05
  6. By: Charness, Gary (University of California, Santa Barbara); Kuhn, Peter J. (University of California, Santa Barbara)
    Abstract: This paper surveys the contributions of laboratory experiments to labor economics. We begin with a discussion of methodological issues: why (and when) is a lab experiment the best approach; how do laboratory experiments compare to field experiments; and what are the main design issues? We then summarize the substantive contributions of laboratory experiments to our understanding of principal-agent interactions, social preferences, union-firm bargaining, arbitration, gender differentials, discrimination, job search, and labor markets more generally.
    Keywords: labor economics, laboratory experiments, principal-agent theory, personnel economics
    JEL: C9 J0
    Date: 2010–05
  7. By: Cheikbossian, Guillaume
    Abstract: This paper analyzes the ability of group members to cooperate in rent-seeking activities in a context of between-group competition. For this purpose, we develop an infinitely repeated rent-seeking game between two groups of different size. We first investigate Nash reversion strategies to support cooperative behavior in a given group before analyzing double-edge trigger strategies which have the property that cheating on the cooperative agreement in a given group is followed by non-cooperation in this group and cooperation in the rival group. The main conclusion is that the set of parameters for which cooperation can be sustained within the larger group as a subgame perfect outcome is as large as that for which cooperation can be sustained in the smaller group. Hence, in contrast with Olson’s (1965) celebrated thesis but in accordance with many informal and formal observations, the larger group is as effective as the smaller group in furthering its interest.
    Keywords: collective action, rent-seeking, within-group cooperation
    JEL: D72 D74 C72 C73
    Date: 2009–09–24

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