nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒03‒05
nine papers chosen by
Matthew Baker
City University of New York

  1. Individual Heterogeneity in Punishment and Reward By Leibbrandt, Andreas; López-Pérez, Raúl
  2. Evolution and Complexity in Economics Revisited By Kurt Dopfer
  3. The Evolution of Sharing Rules in Rent Seeking Contests: Incentives Crowd Out Cooperation By Heinrich Ursprung
  4. The social costs of responsibility By Steven J. Humphrey; Elke Renner
  5. Common reasoning in games: a Lewisian analysis of common knowledge of rationality By Robin Cubitt; Robert Sugden
  6. Cooperation amongst competing agents in minority games By Deepak Dhar; V. Sasidevan; Bikas K. Chakrabarti
  7. The Development of Egalitarianism, Altruism, Spite and Parochialism in Childhood and Adolescence By Fehr, Ernst; Rützler, Daniela; Sutter, Matthias
  8. Interdependent Preferences and Strategic Distinguishability By Dirk Bergemann; Stephen Morris; Satoru Takahashi
  9. Population, land and growth. By Claire Loupias; Bertrand Wigniolle

  1. By: Leibbrandt, Andreas (Department of Economics, University of Chicago); López-Pérez, Raúl (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: We design experiments to study the extent to which individuals differ in their motivations behind costly punishment and rewarding. Our findings qualify existing evidence and suggest that the largest fraction of players is motivated by a mixture of both inequity-aversion and reciprocity, while smaller fractions are primarily motivated by pure inequity-aversion and pure reciprocity. These findings provide new insights into the literature on other-regarding preferences and may help to reconcile important phenomena reported in the experimental literature on punishment and reward.
    Keywords: Heterogeneity; inequity aversion; monetary punishment/reward; reciprocity; social norms.
    JEL: C70 C91 D63 D74 Z13
    Date: 2011–01
  2. By: Kurt Dopfer
    Abstract: The paper discusses recent trends in the sister sciences of evolutionary economics and complexity economics. It suggests that a unifying approach that marries the two strands is needed when reconstructing economics as a science capable of tackling the two key questions of the discipline: complex economic structure and evolutionary economic change. Physics, biology and the cultural sciences are investigated in terms of their usefulness as both paradigmatic orientation and as toolbox. The micro–meso–macro architecture delineated puts meso centre stage, highlighting its significance as structure component and as process component alike, thereby allowing us to handle the key issues of structure and change.
    Keywords: Length 39 pages
    Date: 2011–02
  3. By: Heinrich Ursprung (Department of Economics, University of Konstanz, Germany)
    Abstract: Modern societies are characterized by competing organizations that rely predominantly on incentive schemes to align the behavior of their members with the organizations’ objectives. This study contributes to explaining why in so many cases incentive schemes have gradually crowded out cooperation as an organization device. Our explanation does not draw on free-riding, the obvious Achilles’ heel of cooperation, but relies completely on fundamental group contest mechanisms. By investigating a canonical rent seeking model and adopting an evolutionary perspective, the analysis identifies shortcomings in previous results, sets the record straight, and explains why the process of incentivizing organizations is protracted.
    Keywords: group contests, rent-seeking, sharing rules, cooperation
    JEL: D72 D74 M52
    Date: 2011–02–21
  4. By: Steven J. Humphrey (Fachbereich Wirtschaftwissenschaften, Universitaet Osnabrueck); Elke Renner (School of Economics, University of Nottingham)
    Abstract: We use an experimental lottery choice task and public goods game to examine if responsibility for the financial welfare of others affects decisionmaking behaviour in two different types of decision environments. We find no evidence that responsibility affects individual risk preferences. Responsibility does, however, crowd-out cooperation in a public goods game.
    Keywords: responsibility, risk attitudes, social preferences, public goods game
    JEL: C72 C91 D74 H41
    Date: 2011–02
  5. By: Robin Cubitt (School of Economics, University of Nottingham); Robert Sugden (School of Economics, University of East Anglia)
    Abstract: The game-theoretic assumption of ‘common knowledge of rationality’ leads to paradoxes when rationality is represented in a Bayesian framework as cautious expected utility maximisation with independent beliefs (ICEU). We diagnose and resolve these paradoxes by presenting a new class of formal models of players’ reasoning, inspired by David Lewis’s account of common knowledge, in which the analogue of common knowledge is derivability in common reason. We show that such models can consistently incorporate any of a wide range of standards of decision-theoretic practical rationality. We investigate the implications arising when the standard of decision-theoretic rationality so assumed is ICEU.
    Keywords: Common reasoning; common knowledge; common knowledge of rationality; David Lewis; Bayesian models of games
    Date: 2011–01
  6. By: Deepak Dhar; V. Sasidevan; Bikas K. Chakrabarti
    Abstract: We study a variation of the minority game. There are N agents. Each has to choose between one of two alternatives everyday, and there is reward to each member of the smaller group. The agents cannot communicate with each other, but try to guess the choice others will make, based only the past history of number of people choosing the two alternatives. We describe a simple probabilistic strategy using which the agents acting independently, can still maximize the average number of people benefitting every day. The strategy leads to a very efficient utilization of resources, and the average deviation from the maximum possible can be made of order $(N^{\epsilon})$, for any $\epsilon >0$. We also show that a single agent does not expect to gain by not following the strategy.
    Date: 2011–02
  7. By: Fehr, Ernst (University of Zurich); Rützler, Daniela (University of Innsbruck); Sutter, Matthias (University of Innsbruck)
    Abstract: We study how the distribution of other-regarding preferences develops with age. Based on a set of allocation choices, we can classify each of 717 subjects, aged 8 to 17 years, as either egalitarian, altruistic, or spiteful. Varying the allocation recipient as either an in-group or an out-group member, we can also study how parochialism develops with age. We find a strong decrease in spitefulness with increasing age. Egalitarianism becomes less frequent, and altruism much more prominent, with age. Women are more frequently classified as egalitarian than men, and less often as altruistic. Parochialism first becomes significant in the teenage years.
    Keywords: other-regarding preferences, egalitarianism, altruism, spite, parochialism, experiments with children and adolescents
    JEL: C91
    Date: 2011–02
  8. By: Dirk Bergemann (Cowles Foundation, Yale University); Stephen Morris (Dept. of Economics, Princeton University); Satoru Takahashi (Dept. of Economics, Princeton University)
    Abstract: A universal type space of interdependent expected utility preference types is constructed from higher-order preference hierarchies describing (i) an agent's (unconditional) preferences over a lottery space; (ii) the agent's preference over Anscombe-Aumann acts conditional on the unconditional preferences; and so on. Two types are said to be strategically indistinguishable if they have an equilibrium action in common in any mechanism that they play. We show that two types are strategically indistinguishable if and only if they have the same preference hierarchy. We examine how this result extends to alternative solution concepts and strategic relations between types.
    Keywords: Interdependent preferences, Higher-order preference hierarchy, Universal type space, Strategic distinguishability
    JEL: C79 D82 D83
    Date: 2010–09
  9. By: Claire Loupias (EPEE, TEPP - Université d'Evry-Val-d'Essonne et CEPII); Bertrand Wigniolle (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This paper suggests a new explanation for changes in economic and population growth with a long run perspective, emphasizing the role of land in the development process. Starting from a pre-industrialization state called the "Malthusian regime&qot;, land and labor are the main production factors. The size of population is limited by the quantity of land available for households and by incomes. Technical progress driven by a "Boserupian effect" may push the economy towards a take-off regime. In this regime, capital accumulation begins and a "learning-by-doing" effect in production takes over from the "Boserupian effect". If this effect is strong enough, the economy can reach an "ultimate growth regime". In the different phases, land plays a crucial role.
    Keywords: Endogenous fertility, land, endogenous growth.
    JEL: D9 J13 O12
    Date: 2011–02

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