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on Evolutionary Economics |
| By: | Yu, Tongkui; Chen, Shu-Heng; Li, Honggang |
| Abstract: | Both laboratory and field evidence suggest that people tend to voluntarily incur costs to punish non-cooperators. While costly punishment typically reduces the average payoff as well as promotes cooperation. Why does the costly punishment evolve? We study the role of punishment in cooperation promotion within a two-level evolution framework of individual strategies and social norms. In a population with certain social norm, players update their strategies according to the payoff differences among different strategies. In a longer horizon, the evolution of social norm may be driven by the average payoffs of all members of the society. Norms differ in whether they allow or do not allow for the punishment action as part of strategies, and, for the former, they further differ in whether they encourage or do not encourage the punishment action. The strategy dynamics are articulated under different social norms. It is found that costly punishment does contribute to the evolution toward cooperation. Not only does the attraction basin of cooperative evolutionary stable state (CESS) become larger, but also the convergence speed to CESS is faster. These two properties are further enhanced if the punishment action is encouraged by the social norm. This model can be used to explain the widespread existence of costly punishment in human society. |
| Keywords: | social norm; costly punishment; cooperative evolutionary stable state; attraction basin; convergence speed |
| JEL: | C02 D64 C73 |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28814&r=evo |
| By: | Almlund, Mathilde (University of Chicago); Duckworth, Angela Lee (University of Pennsylvania); Heckman, James J. (University of Chicago); Kautz, Tim (University of Chicago) |
| Abstract: | This paper explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the "situational specificity" of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared to cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage. |
| Keywords: | personality, behavioral economics, cognitive traits, wages, economic success, human development, person-situation debate |
| JEL: | I2 J24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5500&r=evo |
| By: | Chatterjee, Sidharta |
| Abstract: | This paper deals with cognitive theories behind agent-based modeling of learning and information processing methodologies. Herein, I undertake a descriptive analysis of how human agents learn to select action and maximize their value function under reinforcement learning model. In doing so, I have considered the spatio-temporal environment under bounded rationality using Markov Decision process modeling to generalize patterns of agent behavior by analyzing the determinants of value functions, and of factors that modify policy- action-induced cognitive abilities. Since detecting patterns are central to the human cognitive skills, this paper aspires at uncovering the entanglements of complex contextual pattern identification by linking contexts with optimal decisions that agents undertake under hypercompetitive market pressure through learning which have however, implicative applications in a wide array of social and macroeconomic domains. |
| Keywords: | Cognitive theory, Reinforcement Learning, Markov Decision Process, Glia, Action potential, policy pattern, Neuroeconomics |
| JEL: | D81 C61 D87 |
| Date: | 2011–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28883&r=evo |
| By: | Thomas Barnebeck Andersen (Department of Business and Economics, University of Southern Denmark); Jeanet Bentzen (Department of Economics, University of Copenhagen); Carl-Johan Dalgaard (Department of Economics, University of Copenhagen); Paul Sharp (Department of Economics, University of Copenhagen) |
| Abstract: | We advance the hypothesis that cultural values such as high work ethic and thrift, “the Protestant ethic” according to Max Weber, may have been diffused long before the Reformation, thereby importantly affecting the pre-industrial growth record. The source of pre-Reformation Protestant ethic, according to the proposed theory, was the Catholic Order of Cistercians. Using county-level data for England we find empirically that the frequency of Cistercian monasteries influenced county-level comparative development until 1801; that is, long after the Dissolution of the Monasteries. The pre-industrial development of England may thus have been propelled by a process of growth through cultural change. |
| Keywords: | Protestant ethic; Malthusian population dynamics; economic development |
| JEL: | N13 O11 Z12 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1107&r=evo |
| By: | Patel, Amrish (Department of Economics, School of Business, Economics and Law, Göteborg University); Cartwright, Edward (Department of Economics, University of Kent) |
| Abstract: | In a signalling model of conformity, we demonstrate that naïve observers, those that take actions at face value, constrain the set of actions that can possibly be social norms. With rational observers many actions can be norms, but with naïve observers only actions close to that preferred by the ideal type can be norms. We suggest, therefore, that the naïvety or inexperience of observers is an important determinant of norms and how they evolve.<p> |
| Keywords: | Signalling; Conformity; Social Norms; Naïve Beliefs |
| JEL: | D82 D83 Z13 |
| Date: | 2011–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0488&r=evo |
| By: | Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Südekum, Jens |
| Abstract: | We study the effect of cultural ties on economic exchange using a novel measure for cultural identity: dialect similarity across regions of the same country. We evaluate linguistic micro-data from a unique language survey conducted between 1879 and 1888 in about 45,000 German schools. The recorded geography of dialects comprehensively portrays local cultural ties that have been evolving for centuries, and provides an ideal opportunity to measure cul-tural barriers to economic exchange. In a gravity analysis, we then show that cross-regional migration flows in the period 2000-2006 are positively affected by historical dialect similari-ty. Using different empirical strategies, we show that this finding indicates highly time-persistent cultural borders that impede economic exchange even at a fine geographical scale. |
| Keywords: | Germany; Gravity; Internal migration; Culture; Language; Dialects |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2011-01&r=evo |
| By: | Matthijs van Veelen (CREED, Universiteit van Amsterdam); Julian Garcia (Vrije Universiteit) |
| Abstract: | Repeated games tend to have large sets of equilibria. We also know that in the repeated prisoners dilemma there is a profusion of neutrally stable strategies, but no strategy that is evolutionarily stable. This paper shows that for all of these neutrally stable strategies there is a stepping stone path out; there is always a neutral mutant that can enter a population and create an actual selective advantage for a second mutant. Such stepping stone paths out of equilibrium generally exist both in the direction of more and in the direction of less cooperation. While the central theorems show that such paths out of equilibrium exist, they could still be rare compared to the size of the strategy space. Simulations however suggest that they are not too rare to be found by a reasonable mutation process, and that typical simulation paths take the population from equilibrium to equilibrium through a series of indirect invasions. Instability does not mean we cannot draw qualitative conclusions though. The very nature of the indirect invasions implies that the population will on average be (somewhat) reciprocal and (reasonably) cooperative. |
| Keywords: | Repeated games; evolution; robust against indirect invasions; simulation |
| JEL: | C73 |
| Date: | 2010–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100037&r=evo |