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on Evolutionary Economics |
| By: | Thomas Buser (University of Amsterdam) |
| Abstract: | It is now generally accepted that some people are more altruistic, more trusting, or more reciprocal than others, but it is still unclear whether these differences are innate or a consequence of nurture. We analyse the correlation between handedness and social preferences in the lab and find that left-handed men are significantly more generous when recipients have the possibility to reciprocate and exhibit stronger positive reciprocity themselves. Left-handed women are significantly less altruistic. We test the external validity of these findings by connecting them to large-scale survey data from the Netherlands and the US covering altruistic behaviour and reciprocity outside the lab. The results largely carry over. We argue that our findings demonstrate that social preferences are at least partially determined by nature and help to shed light on their neural origins. |
| Keywords: | social preferences; handedness; external validity of lab experiments |
| JEL: | D87 C91 |
| Date: | 2010–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100119&r=evo |
| By: | John M. Gowdy (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA) |
| Abstract: | Human cultural adaptability helped our species get through several extreme environmental crises during the 200,000 year history of Homo sapiens. Richerson, Boyd and Henrich (2010) argue that this adaptability is a product of gene-culture coevolution. Much has been written about cultural evolution, but relatively little attention has been paid to the role human neurobiology plays in this process. I argue here that neuroscience can make important contributions to understanding human behavior within highly evolved social systems. This can help inform us as to how a transition to sustainability might be possible as we struggle to make it through the population, climate change, and resource bottlenecks of the 21st century. I argue further than the idea of homeostasis can serve as an organizing principle to understand individual, social and ecological sustainability.Creation-Date: 2010-11 |
| JEL: | A10 A11 P48 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:1009&r=evo |
| By: | Raul V. Fabella (School of Economics, University of the Philippines Diliman) |
| Abstract: | The Great Recession has called into question many tenets of Neo-classical Microeconomics. Neo-classical theory allows each agent only one fixed type, homo economicus, while not denying other possible types as in adverse selection.We propose that economic agents not only choose their market basket but also their types. Agents are members of groups and each group has social norms to which the agent more or less conforms. His/her market behavior trades off private well being which responds to prices but also social well being which responds to norms. We show how deviation from norms are determined. We also discuss other anomalies in the light of this model. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201012&r=evo |
| By: | Borgloh, Sarah; Dannenberg, Astrid; Aretz, Bodo |
| Abstract: | This paper studies the construction of social preferences in the lab. Experimental subjects have the opportunity to donate to a charity and to allocate money in a conventional dictator game. The results show that charitable donations and dictator game allocations are positively correlated. The correlation is only significant, however, if the dictator game follows the donation decision. Furthermore, while donation behavior is independent from the order of play, dictator game behavior is not. In line with the constructive-preference approach, we argue that preferences are instable and sensitive to outside influences when subjects are confronted with a new decision situation, while in a well-known situation preferences are more stable. -- |
| Keywords: | social preferences,charitable donations,dictator game,experiment |
| JEL: | C91 C93 D01 D64 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10085&r=evo |
| By: | Vitezslav Babicky; Andreas Ortmann; Silvester Van Koten |
| Abstract: | Theories of fairness have typically used the assumption of ex-ante known pie size. Pie size, however, is rarely known ex ante. Using three simple allocation problems generally known as dictator, ultimatum and trust games, we explore the influence of ex-ante unknown pie size of varying degrees of risk on individual behavior. We derive theoretical predictions for two of these games using utility functions that capture additively separable constant relative risk aversion and inequity aversion. We test the theoretical predictions experimentally on two different subject pools: students of Czech Technical University and employees of Prague City Hall. We control for the risk attitude of our subjects through a variant of the Holt-Laury assessment instrument. We find statistically significant differences in giving behavior as a function of the degree of risk, and the degree of risk aversion, across individuals. We also find differences across the two subject pools but show that, once we control for various socio-demographic and cognitive characteristics, these differences evaporate. We discuss the policy and methodological implications of the results of our artefactual field experiment, as well as the implications for theories of fairness of reciprocity and their experimental test. |
| Keywords: | fairness, risk aversion, subject pool effects, economics experiments. |
| JEL: | C90 C91 C92 D81 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp419&r=evo |
| By: | Pedro Bordado; Nicola Gennaioli; Andrei Shleifer |
| Abstract: | We present a theory of choice among lotteries in which the decision maker's attention is drawn to (precisely defined) salient payoffs. This leads the decision maker to a context-dependent representation of lotteries in which true probabilities are replaced by decision weights distorted in favor of salient payoffs. By endogenizing decision weights as a function of payoffs, our model provides a novel and unified account of many empirical phenomena, including frequent risk-seeking behavior, invariance failures such as the Allais paradox, and preference reversals. It also yields new predictions, including some that distinguish it from Prospect Theory, which we test. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1252&r=evo |
| By: | John M. Gowdy (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA) |
| Abstract: | In spite of the increasing scientific certainty that the earth's climate is warming and that human activity is partially responsible, public willingness to take steps to reduce greenhouse gas emissions seems to be decreasing. How can the scientific consensus as to the urgency of the climate change problem be conveyed to the general public in such a way as to support greenhouse gas abatement policies and to actually change behavior? This essay explores the standard economic approach to environmental pollution and discusses findings from behavioral economics and neuroscience that could lead to a more fruitful understanding of the relationship between economic policy and human psychology. This essay is a background paper prepared for the Garrison Institute's "Climate, Mind and Behavior" initiative. |
| JEL: | A10 A11 P48 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:10&r=evo |
| By: | Tobias Regner (Max Planck Institute of Economics, Jena) |
| Abstract: | Customers at the online music label Magnatune can pay what they want for albums, as long as the payment is within a given price range ($5-$18). Magnatune recommends to pay $8, and on average customers paid $8.20 (Regner and Barria, 2009). We ran an online survey and collected responses from 227 frequent Magnatune customers to gain insights about the underlying motivations to pay more than necessary. We control for individual response- and sample selection-bias, and find that reciprocity and guilt appear to be the major drivers for generous voluntary payments. Being inclined to follow social norms is a positive determinant for payments around the recommended price. |
| Keywords: | social preferences, other-regarding behaviour, music industry, reciprocity, guilt, social norms, altruism, fairness, social-image concerns, survey |
| JEL: | D82 M21 L82 L86 |
| Date: | 2010–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-081&r=evo |
| By: | Ugo Pagano |
| Abstract: | In biology, the laws that regulate the structuring and change of complex organisms, characterised by interlocking complementarities, are different from those that shape the evolution of simple organisms. Only the latter share mechanisms of competitive selection of the fittest analogous to those envisaged by the standard neoclassical model in economics. The biological counterparts of protectionism, subsidies and conflicts enable complex organisms to exit from long period of stasis and to increase their capacity to adapt efficiently to the environment. Because of their interlocking complementarities, most institutions share the laws governing the structure and change of complex organisms. We concentrate on the complementarities between technology and property rights and consider historical cases in which organizational stasis has been overcome by mechanisms different from (and sometimes acting in spite of) competitive pressure. The evolution of institutions cannot be taken for granted; but even when institutions seem frozen for ever by their interlocking complementarities, their potential for change can be discovered by analysis of those interactions |
| JEL: | B52 B40 N60 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:598&r=evo |
| By: | Adam Jaffe (Department of Economics, Brandeis University); Seth Werfel (Federal Reserve Bank of New York) |
| Abstract: | Neoclassical economic theory predicts that policies that discourage the consumption of a particular good will induce innovation in a socially desirable substitute. Evolutionary theory emphasizes the possibility of innovation waves associated with the identification of new dominant designs. We incorporate both of these possibilities in a model of the invention of new smoking cessation products, based on a new dataset of patents on such products from 1951-2004. We find that an increase in cigarette tax levels and smoking bans had no discernable impact on the industry-wide rate of invention in smoking cessation products. It does appear, however, that dominant designs did have substantial positive innovation effects. More specifically, the introduction of the nicotine gum and patch are estimated to have increased the rate of patenting activity in smoking cessation products by 60 and 79 percent, respectively, subject to a 10 percent rate of decay. Finally, these products had larger innovation effects at the firm level than among individual inventors. |
| Keywords: | Patents, Technological Change, Smoking Cessation Products, Cigarette Taxes |
| JEL: | O31 O38 H23 I18 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:9&r=evo |
| By: | Carl-Johan Dalgaardy; Sebastian Vollmer (Harvard School of Public Health) |
| Abstract: | This study introduces physiological aging into a simple model of optimal in- tertemporal consumption. In this endeavor we draw on the natural science literature on aging. According to the purposed theory, the speed of the aging process and the time of death are endogenously determined by optimal health investments. At the same time, physiological aspects of the aging process infuence optimal savings and health investment. We calibrate the model for the average US male in 2000 and proceed to show that the calibrated model accounts well for the cross-country link between labor productivity and life expectancy in the same year (\the Preston curve"); cross-country income dierences can explain dierences in life expectancy at age 20 of up to a decade. Moreover, techno- logical change in health care of about 1.1% per year can account for the observed shift in the Preston curve between 1980 and 2000. |
| Keywords: | aging, death, optimal intertemporal consumption |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:5710&r=evo |