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

  1. The Survival of the Conformist: Social Pressure and Renewable Resource Management By Alessandro Tavoni; Maja Schlüter; Simon Levin
  2. Complementarities between Mathematical and Computational Modeling: The Case of the Repeated Prisoners' Dilemma By Xavier Vilà
  3. The Evolution of U.S.Economics Textbooks By David Colander
  4. Trust me, it is High Trust: On Trust and its Measurement By Christian Lukas; Peter Walgenbach
  5. Social Norms and Economic Incentives in Firms By Huck, Steffen; Kübler, Dorothea; Weibull, Jörgen
  6. The Repeated Prisoner’s Dilemma in a Network By Markus Kinateder

  1. By: Alessandro Tavoni (Advanced School of Economics at the University of Venice); Maja Schlüter (Leibniz-Institute of Freshwater Ecology and Inland Fisheries); Simon Levin (Department of Ecology and Evolutionary Biology at Princeton University)
    Abstract: This paper examines the role of pro-social behavior as a mechanism for the establishment and maintenance of cooperation in resource use under variable social and environmental conditions. By coupling resource stock dynamics with social dynamics concerning compliance to a social norm prescribing non-excessive resource extraction in a common pool resource (CPR), we show that when reputational considerations matter and a sufficient level of social stigma affects the violators of a norm, sustainable outcomes are achieved. We find large parameter regions where norm-observing and norm-violating types coexist, and analyze to what extent such coexistence depends on the environment.
    Keywords: Cooperation, Social Norm, Ostracism, Common Pool Resource, Evolutionary Game Theory, Replicator Equation, Agent-based Simulation, Coupled Socio-resource Dynamics
    JEL: C73 Q20 D70
    Date: 2010–10
  2. By: Xavier Vilà
    Abstract: We study the properties of the well known Replicator Dynamics when applied to a finitely repeated version of the Prisoners' Dilemma game. We characterize the behavior of such dynamics under strongly simplifying assumptions (i.e. only 3 strategies are available) and show that the basin of attraction of defection shrinks as the number of repetitions increases. After discussing the difficulties involved in trying to relax the 'strongly simplifying assumptions' above, we approach the same model by means of simulations based on genetic algorithms. The resulting simulations describe a behavior of the system very close to the one predicted by the replicator dynamics without imposing any of the assumptions of the mathematical model. Our main conclusion is that mathematical and computational models are good complements for research in social sciences. Indeed, while computational models are extremely useful to extend the scope of the analysis to complex scenarios hard to analyze mathematically, formal models can be useful to verify and to explain the outcomes of computational models.
    Keywords: Computational Economics, Model-To-Model Analysis, Genetic Algorithms, Evolutionary Game Theory, Prisoners' Dilemma
    JEL: C63 C73
    Date: 2010–10–27
  3. By: David Colander
    Date: 2010
  4. By: Christian Lukas (Department of Economics, University of Konstanz, Germany); Peter Walgenbach (School of Economics and Business Administration, Friedrich Schiller University of Jena, Germany)
    Abstract: As the positive impact of trust on business success is widely undisputed, the question of how to measure trust naturally arises. Both expectations of trustworthy behavior and possible gains and losses from a trusting relationship influence the level of trust between two parties or individuals. This paper explores whether an exchange featuring (almost) equal expected gains and expected losses for a trusting individual is evidence for high trust or low trusts; we argue that such an exchange tends to display low trust. A simple trust measure is suggested that can be applied both in experimental and analytical research.
    Keywords: trust, trust measurement, trust as behavior, agency theory, behaviroal game theory, investment game
    JEL: D6 M5
    Date: 2010–10–29
  5. By: Huck, Steffen (University College London); Kübler, Dorothea (WZB - Social Science Research Center Berlin); Weibull, Jörgen (Stockholm School of Economics)
    Abstract: This paper studies the interplay between economic incentives and social norms in firms. We introduce a general framework to model social norms arguing that norms stem from agents’ desire for, or peer pressure towards, social efficiency. In a simple model of team production we examine the interplay of different types of contracts with social norms. We show that one and the same norm can be output-increasing, neutral, or output-decreasing depending on the incentive scheme. We also show how social norms can induce multiplicity of equilibria and how steeper economic incentives can reduce effort.
    Keywords: social norms, incentives, contracts
    JEL: D23
    Date: 2010–10
  6. By: Markus Kinateder (Universidad de Navarra)
    Abstract: Imperfect private monitoring in an infinitely repeated discounted Prisoner’s Dilemma played on a communication network is studied. Players observe their direct neighbors’ behavior only, but communicate strategically the repeated game’s history throughout the network. The delay in receiving this information requires the players to be more patient to sustain the same level of cooperation as in a complete network, although a Folk Theorem obtains when the players are patient enough. All equilibria under exogenously imposed truth-telling extend to strategic communication, and additional ones arise due to richer communication. There are equilibria in which a player lies. The flow of information is related with network centrality measures.
    Keywords: Repeated Game, Prisoner’s Dilemma, Imperfect Private Monitoring, Network, Strategic Communication, Centrality
    JEL: C72 C73 D85
    Date: 2010–09

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