nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒04‒16
twelve papers chosen by
Matthew Baker
City University of New York

  1. Group Identity and Coalition Formation: Experiments in a three?player divide the dollar Game By Tremewan, James
  2. An Experimental Study on the Relevance and Scope of Culture as a Focal Point By Olga Bogach; Andreas Leibbrandt
  3. The evolution of mixed conjectures in the rent-extraction game By Paulo Brito; Bipasa Datta; Huw Dixon
  4. Does virtuous circle between social capital and CSR exist? A “network of games” model and some empirical evidence By Giacomo Degli Antoni; Lorenzo Sacconi
  5. Decision Making under Ecological Regime Shift: An Experimental Economic Approach By Kawata, Yukichika
  6. Quality and quantity: The role of social interactions in individual health By Fiorillo Damiano; Sabatini Fabio
  7. Earning and saving competences of individuals in a local community in Poland By Barbara Liberda; Magdalena Szymczak
  8. Parents, Television and Cultural Change By Esther Hauk; Giovanni Immordino
  9. See you on Facebook! A framework for analyzing the role of computer-mediated interaction in the evolution of social capital By Antoci Angelo; Sabatini Fabio; Sodini Mauro
  10. Gender and Cooperation in Children: Experiments in Colombia and Sweden By Cárdenas, Juan-Camilo Cárdenas; Dreber, Anna Dreber; von Essen, Emma; Ranehill, Eva
  11. Pure Entertainment or Social Harmony? Understanding Private Returns to Social Spending on Household Ceremonies in China By Chen, Xi
  12. Trust and Fertility: Evidence from OECD countries By Yamamura, Eiji; Antonio R, Andrés

  1. By: Tremewan, James
    Abstract: This paper is an experimental study on the effect of group identity on the formation of coalitions and the resulting distribution of resources. After inducing group identity based on preferences over paintings, subjects play symmetric three-player _divide the dollar_ games with a majority rule decision process. The main finding is that where two players are from one group and one from the other, those in the minority earn significantly less than majority players. This is largely a result of a two-way split between majority players occurring more frequently, either because of the increased salience of this outcome, or a shift in social preferences.
    Date: 2010–06
  2. By: Olga Bogach (Department of Economics, University of Hawaii at Manoa); Andreas Leibbrandt (Department of Economics, University of Chicago)
    Abstract: This paper uses an experimental approach to study whether nationality serves as a focal point. We let subjects from Japan, Korea, and China play stag-hunt coordination games in which we vary information about their partner. The results show that subjects are more likely to try to coordinate on the payoff-dominant equilibrium if the only piece of information they have about their partner is that they have the same nationality. However, if subjects receive additional information about their partner, subjects are not more likely to try to coordinate on the payoff dominant equilibrium. We also do not find that subjects are less likely to try to coordinate on the payoff-dominant equilibrium when their partner has a different nationality as compared to when the partner’s nationality is unknown. In addition, we observe that giving subjects information about their partner in general increases the risk of miscoordination. Thus, our findings suggest that nationality can serve as a coordination device but also that the scope of this device is limited.
    Keywords: Coordination, Focal points, Cultural economics, Inter-cultural lab experiments, In-group behavior.
    JEL: C91 C92 Z1 Z13
    Date: 2011–04–01
  3. By: Paulo Brito; Bipasa Datta; Huw Dixon
    Abstract: This paper adopts an evolutionary perspective on the rent-extraction model with conjectural variations (CV). We analyze the global dynamics of the model with three CVs under the replicator equation. We find that the end points of the evolutionary dynamics include the pure-strategy consistent CVs. However, there are also mixed-strategy equilibria that occur. These are on the boundaries between the basins of attraction of the pure-strategy sinks. We develop a more general notion of consistency which applies to mixed-strategy equilibria. In a three conjecture example, we find that in contrast to the pure-strategy equilibria, the mixed-strategy equilibria are not ESS: under the replicator dynamics, there are three or four mixed equilibria that may either be totally unstable, or saddle-stable. There also exist heteroclinic orbits that link equilibria together.
    Keywords: Rent-extraction, evolutionary dynamics, consistent conjectures, global dynamics, mixed-strategy.
    JEL: L15 H0
    Date: 2011–04
  4. By: Giacomo Degli Antoni; Lorenzo Sacconi
    Abstract: Social capital and corporate social responsibility (CSR) have received increasing attention in research on the role that elements such as trust, trustworthiness and social norms of reciprocity and cooperation may have in promoting socio-economic development. Although social capital and CSR seem to have features in common, their relationship has not yet been analysed in depth. This paper investigates the idea of a virtuous circle between the level of social capital and the implementation of CSR practices that fosters the creation of cooperative networks between the firm and all its stakeholders. By using both a theoretical approach developed by considering tools of network analysis and psychological game theory and an empirical approach based on original evidence from three case studies, this study shows the role that cognitive social capital (understood as a disposition to conform with ethical principles of cooperation) and the adoption of CSR practices may have in promoting the emergence of sustainable networks of relations between the firm and all its stakeholders (structural social capital).
    Keywords: Social capital, Corporate Social Responsibility, Social norms, Network, Cooperation, Trust
    JEL: A13 D23 L21 M14 Z10
    Date: 2011
  5. By: Kawata, Yukichika
    Abstract: Environmental economics postulates the assumption of homo economicus and presumes that externality occurs as a result of the rational economic activities of economic agents. This paper examines this assumption using an experimental economic approach in the context of regime shift, which has been receiving increasing attention. We observe that when externality does not exist, economic agents (subjects of experimemt) act economically rationally, but when externality exists, economic agents avoid the risk of a regime shift that would have negative consequences for others. Our results suggest that environmental economics may have to reconsider the assumption of homo economicus.
    Keywords: homo economicus; unboundedly rational economic agents; regime shift; experimental economics
    JEL: C90 D64 Q57
    Date: 2011–04–01
  6. By: Fiorillo Damiano; Sabatini Fabio
    Abstract: The public health literature focusing on the detrimental effects of social isolation has shown that the quantity of social connections is positively correlated with individual health. Drawing on pooled cross-sectional data, we test this hypothesis on a representative sample of the Italian population. Our findings show that, besides the quantity of interactions, it is their quality – as measured by subjective satisfaction derived from relationships with friends – that works as the best predictor of health. We point out the existence of health disparities based on socio-economic status. Poorer and less educated individuals are exposed to a higher probability of reporting poor health conditions. The risk is even worse for unemployed and retired workers. This paper contributes to the literature in two substantive dimensions. This is the first empirical study of the relationship between social interactions and health in Italy. Second, we add to previous studies by carrying out the first assessment of the role of satisfaction in interpersonal relations.
    Keywords: Health, well-being, satisfaction, social interactions, social capital, family, Italy
    JEL: I12 I18 Z1
    Date: 2011–03
  7. By: Barbara Liberda (Faculty of Economic Sciences, University of Warsaw); Magdalena Szymczak (Faculty of Economic Sciences, University of Warsaw)
    Abstract: The aim of this paper is to identify variables that affect the capability of an individual to earn and save income. Our hypothesis is that besides demographic and human capital determinants, social, cultural and psychological variables affect strongly the individual’s earning and saving competences. We test our hypothesis using a method of decision tree (Exhaustive search Chi – squared Automatic Interaction Detection) to identify the earning and saving competences of individuals in Poland. In the decision tree analysis we found factors that are conducive for earning and saving. These factors includes: fairness, attitude towards cheating at exams, tolerance towards persons of different religion and different skin color, trust in judges and scientists, social risk aversion, evaluating own health status, asking for advice. This theoretical approach is applied to micro data from a Survey on Civilization Competences of individuals in local communities conducted in July-September 2009 in five regions of Poland.
    Keywords: earning, saving, capability, competence, income, municipality
    JEL: D11 D12 D14
    Date: 2011
  8. By: Esther Hauk (Institute of Economic Analysis, Spanish Research Council (IAE-CSIC) and Barcelona GSE); Giovanni Immordino (Università di Salerno and CSEF)
    Abstract: This paper develops a model of cultural transmission where television plays a central role for socialization. Parents split their free time between educating their children, which is costly, and watching TV which though entertaining might socialize the children to the wrong trait. The free to air television industry maximizes advertisement revenue. We show that TV watching is increasing in cultural coverage, cost of education, TV’s entertainment value and decreasing in the perceived cultural distance between the two traits. A monopolistic television industry captures all TV watching by both groups if the perceived cultural distance between groups is small relative to the TV’s entertainment value. Otherwise, more coverage will be given to the most profitable group where profitability increases in group size, advertisement sensitivity and perceived cultural distance. This leads to two possible steady states where one group is larger but both groups survive in the long run. Competition in the media industry might lead to cultural extinction but only if one group is very insensitive to advertisement and not radical enough not to watch TV. We briefly discuss the existing evidence for the empirical predictions of the model.
    Keywords: television, socialization, cultural trait dynamics, media coverage
    JEL: Z1 L82
    Date: 2011–04–05
  9. By: Antoci Angelo; Sabatini Fabio; Sodini Mauro
    Abstract: Empirical studies have documented a decline in indicators of social participation in the last decades. The responsibility of social disengagement has been often attributed to pervasive busyness and the rising pressure of time. In this paper we argue that computer-mediated interaction, and particularly online networking, can help mitigate this downward trend. We develop a logical framework for assessing the role of the internet in the evolution of social participation. We analyze an economy where agents can develop their social interactions through two main modes of participation, one encompassing both online networking and face to face interactions, and another solely based on physical encounters. We study the interdependence between the rise in the pressure of time and the variation in the relative performance of the two strategies of participation.
    Keywords: Internet, computer-mediated communication, online networking, Facebook, social networks, social capital
    JEL: O33 Z13
    Date: 2011–03
  10. By: Cárdenas, Juan-Camilo Cárdenas (Universidad de los Andes); Dreber, Anna Dreber (Institute for Financial Research (SIFR)); von Essen, Emma (Dept. of Economics, Stockholm University); Ranehill, Eva (Stockholm School of Economics)
    Abstract: We compare how children aged 9-12 in Colombia and Sweden cooperate in a Prisoner’s Dilemma. We introduce a new measurement device for cooperation that can be easily understood by children. There is some evidence of more cooperation in Sweden than in Colombia. Girls in Colombia are less cooperative than boys, whereas our results indicate the opposite in Sweden. Girls are in general more cooperative with boys than with girls. Relating cooperation to competitiveness, this appears to be task and country dependent.
    Keywords: Cooperation; children; gender differences; experiment
    JEL: C91 J16
    Date: 2011–04–11
  11. By: Chen, Xi
    Abstract: Recent social spending inflation in China has led to its growth rate far exceeding that of income and other consumption. In this paper, we estimate private returns to social spending, such as higher social status and larger social network that serve as certain functions. In almost all specifications we find that gift spending has significant private returns, but the returns are biased towards richer households. Upon comparing different measures of centrality, we also find that social connections are more accurately characterized when weighted by their intensities (values), capturing their role in mobilizing scarce resource in the network. Furthermore, social status and network may change long-term income trajectory and the resulted consumption. However, our findings do not suggest that they are vehicles through which they could facilitate smoother consumption against shocks. The result does not depend on how heterogeneous the shocks are.
    Keywords: social network, social status, private return, social spending, consumption, Consumer/Household Economics,
    Date: 2011
  12. By: Yamamura, Eiji; Antonio R, Andrés
    Abstract: Using panel data for 24 (OECD) countries during the period 1980–2004 this study examines how social trust affects fertility. The major finding through the random effects approach is that the social trust increases the fertility rate. A 1% rise in the trust rate leads to an increase in fertility by 0.01 points. The results presented here suggest that in developed countries, trust underlies the desirable circumstances for child rearing.
    Keywords: Trust; fertility; OECD; inequality; female labor participation.
    JEL: J13 Z13
    Date: 2011–03–18

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