nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2010‒06‒11
seven papers chosen by
Matthew Baker
City University of New York

  1. International Trade, Factor Mobility and the Persistence of Cultural-Institutional Diversity By Marianna Belloc; Samuel Bowless
  2. Social Connections, Networks, and Social Capital Erosion: Evidence from Surveys and Field Experiments By Yazhen Gong
  3. Long-run equilibria, dominated strategies, and local interactions By Simon Weidenholzer
  4. Mine and Thine: The Territorial Foundations of Human Property By Peter DeScioli; Bart J. Wilson
  5. Multi-Level Trust Game with “Insider” Communication By Roman M. Sheremeta; Jingjing Zhang
  6. Tacit Collusion in an Infinitely Repeated Prisoners’ Dilemma By Joseph E. Harrington, Jr. and Wei Zhao
  7. Is economics coursework, or majoring in economics, associated with different civic behaviors? By Sam Allgood; William Bosshardt; Wilbert van der Klaauw; Michael Watts

  1. By: Marianna Belloc; Samuel Bowless
    Abstract: Cultural and institutional differences among nations may result in differences in the ratios of marginal costs of goods in autarchy and thus be the basis of specialization and comparative advantage, as long as these differences are not eliminated by trade. We provide an evolutionary model of endogenous preferences and institutions under autarchy, trade and factor mobility in which multiple asymptotically stable cultural-institutional conventions may exist, among which transitions may occur as a result of decentralized and un-coordinated actions of employers or employees. We show that: i) specialization and trade may arise and enhance welfare even when the countries are identical other than their cultural-institutional equilibria; ii) trade liberalization does not lead to convergence, it reinforces the cultural-institutional differences upon which comparative advantage is based and may thus impede even Pareto-improving cultural-institutional transitions; and iii) by contrast, greater mobility of factors of production favors decentralized transitions to a superior cultural-institutional convention by reducing the minimum number of innovators necessary to induce a transition.
    Keywords: institutions, incomplete contracts, culture, trade integration, factor mobility,
    JEL: D02 F15 F16
    Date: 2009–09
  2. By: Yazhen Gong
    Abstract: Measuring trust, a cognitive social capital that can significantly affect cooperation among individuals and groups to take collective actions for joint benefits, is an important empirical research. This study aimed to understand the determinants of social capital with specific focus on the effect of individuals' bonding social capital and bridging social capital. It explored the methods of measuring trust and identified the determining factors affecting trust/trustworthiness among village members in southwestern China's Yunnan province. A survey was done on 600 farmers in 30 administrative villages. A trust game was conducted using the respondents as subjects of the experiments, 300 playing the role of senders and 300 playing the role of receivers. Results showed that education level could positively and significantly predict both players' behaviors. The percentage of expenditure on gift exchange in the sender's total family expenditure and trust measured were robust to the model's specifications and could almost predict the sender's behavior. Meanwhile, there was no significant evidence the surveyed trust could predict the receiver's behavior. The village's openness to the market and outside world also negatively and significantly predicted both players' behaviors. It showed that the receiver's family participation in closed versus opened networks had an opposite impact on receiver's behavior. Hence, social connection variables could play more important roles than individual demographic characteristics in interactions that involve social capital. However, social capital could be eroded when the villages become more open to the outside world and when informal institutions are gradually substituted by modern formal institutions.
    Keywords: erosion, China
    Date: 2010–04
  3. By: Simon Weidenholzer
    Abstract: The present note revisits a result by Kim and Wong (2010) showing that any strict Nash equilibrium of a coordination game can be supported as a long run equilibrium by properly adding dominated strategies. We show that in the circular city model of local interactions the selection of 1/2 -dominant strategies remains when adding strictly dominated strategies if interaction is decentral". Conversely, if the local interaction structure is central" by adding properly suited dominated strategies any equilibrium strategy of the original game can be supported as long run equilibrium. Classification- JEL: C72, D83
    Date: 2010–05
  4. By: Peter DeScioli (Economic Science Institute, Chapman University); Bart J. Wilson (Economic Science Institute, Chapman University)
    Abstract: Research shows that many animal species have morphological and cognitive adaptations for fighting with others to gain resources, but it remains unclear how humans make fighting decisions. Non-human animals often adaptively calibrate fighting behavior to ecological variables such as resource quantity and whether the resource is distributed uniformly or clustered in patches. Also, many species use strategies to reduce fighting costs such as resolving disputes based on power asymmetries or conventions. Here we show that humans apply an ownership convention in response to the problem of severe fighting. We designed a virtual environment where ten participants, acting as avatars, could forage and fight for electronic food items (convertible to cash). In the patchy condition, we observed an ownership convention—the avatar who arrives first is more likely to win—but in the uniform condition, where severe fighting is rare, the ownership convention is absent.
    Date: 2010–03
  5. By: Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); Jingjing Zhang (Department of Economics, McMaster University)
    Abstract: This experiment studies the internal and external effects of communication in a multilevel trust game. In this trust game, the first player can send any part of his endowment to the second player. The amount sent gets tripled. The second player decides how much to send to the third player. The amount is again tripled, and the third player then decides the allocation among the three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. When we allow communication only between the second and third players, the amounts sent and returned between these two increase. The new interesting finding is that there are external effects of communication: the first player who is outside communication sends 60% more and receives 140% more than in the no communication treatment. As a result, social welfare and efficiency increase from 48% to 73%.
    Keywords: multi-level trust games, experiments, reciprocity, communication
    JEL: C72 C91 D72
    Date: 2009–09
  6. By: Joseph E. Harrington, Jr. and Wei Zhao
    Abstract: In the context of an infinitely repeated Prisoners’ Dilemma, we explore how cooperation is initiated when players communicate and coordinate through their actions. There are two types of players - patient and impatient - which are private information. An impatient type is incapable of cooperative play, while if both players are patient types - and this is common knowledge - then they can cooperate with a grim trigger strategy. We find that the longer that players have gone without cooperating, the lower is the probability that they’ll cooperate in the next period. While the probability of cooperation emerging is always positive, there is a positive probability that cooperation never occurs.
    Date: 2010–06
  7. By: Sam Allgood; William Bosshardt; Wilbert van der Klaauw; Michael Watts
    Abstract: Studies regularly link levels of educational attainment to civic behavior and attitudes, but only a few investigate the role played by specific coursework. Using data collected from students who attended one of four public universities in our study, we investigate the relationship between economics coursework and civic behavior after graduation. Drawing from large samples of students in economics, business, or general majors, we compare responses across the three groups and by the number of undergraduate economics courses completed. We find that undergraduate coursework in economics is strongly associated with political party affiliation and with donations to candidates or parties, but not with the decision to vote or not vote. Nor is studying economics correlated with the likelihood (or intensity of) volunteerism. While we find that the civic behavior of economics majors and business majors is similar, it appears that business majors are less likely than general majors to engage in time-consuming behaviors such as voting and volunteering. Finally, we extend earlier studies that address the link between economics coursework and attitudes on public policy issues, finding that graduates who studied more economics usually reported attitudes closer to those expressed in national surveys of U.S. economists. Interestingly, we find the public policy attitudes of business majors to be more like those of general majors than of economics majors.
    Keywords: Education ; Economics - Study and teaching ; Business and education ; Human behavior ; Volunteers
    Date: 2010

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