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on Evolutionary Economics |
| By: | Gabriele Camera; Marco Casari; Maria Bigoni |
| Abstract: | We study cooperation in four-person economies of indefinite duration. Subjects interact anonymously playing a prisoner’s dilemma. We identify and characterize the strategies employed at the aggregate and at the individual level. We find that (i) grim trigger well describes aggregate play, but not individual play; (ii) individual behavior is persistently heterogeneous; (iii) coordination on cooperative strategies does not improve with experience; (iv) systematic defection does not crowd-out systematic cooperation. |
| Keywords: | repeated games, equilibrium selection, prisoners’ dilemma, random matching |
| JEL: | C90 C70 D80 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1237&r=evo |
| By: | Quamrul Ashraf (Williams College); Oded Galor (Brown University) |
| Abstract: | This research argues that deep-rooted factors, determined tens of thousands of years ago, had a significant effect on the course of economic development from the dawn of human civilization to the contemporary era. It advances and empirically establishes the hypothesis that, in the course of the exodus of Homo sapiens out of Africa, variation in migratory distance from the cradle of humankind to various settlements across the globe affected genetic diversity and has had a long-lasting effect on the pattern of comparative economic development that is not captured by geographical, institutional, and cultural factors. In particular, the level of genetic diversity within a society is found to have a hump-shaped effect on development outcomes in both the pre-colonial and the modern era, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. While the intermediate level of genetic diversity prevalent among Asian and European populations has been conducive for development, the high degree of diversity among African populations and the low degree of diversity among Native American populations have been a detrimental force in the development of these regions. Further, the optimal level of diversity has increased in the process of industrialization, as the beneficial forces associated with greater diversity have intensified in an environment characterized by more rapid technological progress. |
| Keywords: | The "Out of Africa" hypothesis, Human genetic diversity, Comparative development, Income per capita, Population density, Neolithic Revolution, Land productivity |
| JEL: | N10 N30 N50 O10 O50 Z10 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2010-05&r=evo |
| By: | Timothy N. Cason; Daniel Friedman; Ed Hopkins |
| Abstract: | We report experiments designed to test between Nash equilibria that are stable and unstable under learning. The “TASP” (Time Average of the Shapley Polygon) gives a precise prediction about what happens when there is divergence from equilibrium under a wide class of learning processes. We study two versions of Rock-Paper-Scissors with the addition of a fourth strategy, Dumb. The unique Nash equilibrium places a weight of 1/2 on Dumb in both games, but in one game the NE is stable, while in the other game the NE is unstable and the TASP places zero weight on Dumb. Consistent with TASP, we find that the frequency of Dumb is lower and play is further from Nash in the high payoff unstable treatment than in the other treatments. However, the frequency of Dumb is substantially greater than zero in all treatments. |
| Keywords: | games, experiments, TASP, learning, unstable, mixed equilibrium, fictitious play |
| JEL: | C72 C73 C92 D83 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1233&r=evo |
| By: | Stavros A. Drakopoulos |
| Abstract: | Many researchers have found that socioeconomic factors play a crucial role in determining physiological and psychological health levels of the population. This implies that socioeconomic inequalities tend to produce health inequalities. It is also generally accepted that the level of unemployment, income inequality and poverty levels are largely affected by economic policies and the economic cycles. They can also influence economic growth, human capital levels and thus productivity which play an important role on health inequalities. Economic policies can also influence the occurrence, frequency, duration and the strength of economic cycles which in turn influence socioeconomic factors and therefore health inequalities. Thus, this short review will discuss the conduct and the effects of economic policy on health inequalities especially during recessionary periods. The paper starts with a discussion of the need and of the instruments of economic policy and also its effectiveness in smoothing the economic cycle. It also examines the interplay between main policy targets such as unemployment and inflation with political considerations. Finally, it concentrates on the effects of economic policies for health inequalities in view of economic recessions. |
| Keywords: | Economic Policy, Health, Socio-economic Factors. |
| JEL: | I1 H5 |
| Date: | 2010–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2010_13&r=evo |
| By: | Gabriele Camera; Marco Casari; Maria Bigoni |
| Abstract: | Social norms of cooperation are studied under several forms of communication. In an experiment, strangers could make public statements before playing a prisoner’s dilemma. The interaction was repeated indefinitely, which generated multiple equilibria. Communication could be used as a tool to either signal intentions to coordinate on Pareto-superior outcomes, to deceive others, or to credibly commit to actions. Some forms of communication did not promote the incidence of efficient Nash play, and sometimes reduced it. Surprisingly, cooperation suffered when subjects could publicly commit to actions. |
| Keywords: | coordination, cheap-talk, deception, indefinitely repeated game, social norms |
| JEL: | C90 C70 D80 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1236&r=evo |
| By: | Harvey S. Rosen (Princeton University); Stephen T. Sims (STS Associates) |
| Abstract: | This paper examines whether altruistic behavior is habit forming. We take advantage of a data set that includes a rich set of information concerning individuals’ donations of cash and time as adults as well as information about whether they were involved with charitable activities when they were young. The basic premise is that if altruistic behavior when young is a good predictor of such behavior in adulthood, then this is consistent with the notion that altruistic behavior is habit forming. Using U.S. data, we examine both donations of money and time, and find that engaging in charitable behavior when young is a strong predictor of adult altruistic behavior, ceteris paribus. A major issue in the interpretation of this result is that the correlation between youthful and adult altruistic behavior may be due to some third variable that affects both. While it is impossible to rule out such a possibility, we are able to control for family influences that likely could affect lifetime attitudes toward altruism. We find that, even taking this factor into account, altruistic behavior as a youth plays a significant role in explaining adult behavior. This result applies to donations of money and time to a variety of types of non-profit organizations. |
| Keywords: | altruistic behavior, donations, nonprofit fundraising |
| JEL: | D19 D83 L31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1244&r=evo |
| By: | Donja Darai (Socioeconomic Institute, University of Zurich); Silvia Grätz (Socioeconomic Institute, University of Zurich) |
| Abstract: | We analyze cooperative behavior in a prisoner's dilemma game with high stakes, face-to-face communication, and two rounds of pre-play in which the two final contestants are endogenously selected via a voting process. Using data from the British television game show "Golden Balls", we find a unilateral cooperation rate of 55% and a mutual cooperation rate of 33%. The stake size is on average $13,300 and ranges from $3 to $100,150. Our analysis shows that both stake size and communication have a significant impact on the player's likelihood to cooperate. In particular, we observe a negative correlation between stake size and cooperation. Also certain gestures, as handshakes, decrease the likelihood to cooperate. But, if players mutually promise each other to cooperate and in addition shake hands on it, the cooperation rate increases. We also show that a player's expectation about the stake size matters. Further, we find a strong link between contestant's pre-play behavior and the outcome of the prisoner's dilemma. Players who contribute more to the stake size are less likely to cooperate, even though each player's contribution is determined by a random process. Apart from that, it matters whether a player has lied in the pre-play and whether she experienced her opponent's goodwill. Addressing the partner selection process, we find that contestant's voting decisions are based on objective criteria, i.e., their opponent's monetary contribution to the stake size, as well as subjective personal characteristics, i.e., the opponents' trustworthiness. |
| Keywords: | prisoner's dilemma, cooperative behavior, communication, promises, voting |
| JEL: | C72 C93 H41 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:soz:wpaper:1006&r=evo |
| By: | Jakob B. Madsen; James B. Ang; Rajabrata Banerjee |
| Abstract: | Using long historical data for Britain over the period 1620-2006, this paper seeks to explain the importance of innovative activity, population growth and other factors in inducing the transition from the Malthusian trap to the post-Malthusian growth regime. Furthermore, the paper tests the ability of two competing second-generation endogenous growth models to account for the British growth experience. The results suggest that innovative activity was an important force in shaping the Industrial Revolution and that the British growth experience is consistent with Schumpeterian growth theory. |
| JEL: | O30 O40 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2010-18&r=evo |
| By: | Douglas L. Campbell |
| Abstract: | What determines trade patterns? Habit persistence in consumer tastes and learning-by-doing in production imply that history and culture matter. Deriving a dynamic gravity equation from a simple model, it is shown that cultural similarity is a product of history, so that trade patterns are a function of bilateral GDP, current trade costs, and the past history of trade costs. Using a trade data set which spans from 1870 to 2000, I demonstrate that many gravity variables operate via lagged trade, that historical trade shocks matter, and that trade patterns are persistent, even across centuries. |
| Keywords: | Dynamic Gravity Equation, Endogenous Preferences, Habit Persistence, Learning By-Doing. |
| JEL: | F10 F12 F22 N70 |
| Date: | 2010–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2010_26&r=evo |