nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒04‒23
fifteen papers chosen by
Matthew Baker
City University of New York

  1. Comment on Promises and Partnership By Cary Deck; Maroš Servátka; Steven Tucker
  2. Testing Behavioral Public Economics Theories in the Laboratory By James Alm
  3. Finitely repeated games with social preferences By Oechssler, Jörg
  4. Lyapunov Stability in an Evolutionary Game Theory Model of the Labor Market By Araujo, Ricardo Azevedo
  5. Social psychology and environmental economics: a new look at ex ante corrections of biased preference evaluation By Nicolas Jacquemet; Alexander James; Stephane Luchini; Jason Shogren
  6. Inequality Aversion and Antisocial Punishment By Thöni, Christian
  7. Competition for Trophies Triggers Male Generosity By Xiaofei (Sophia) Pan; Daniel Houser
  8. Words Speak Louder Than Money By Maroš Servátka; Steven Tucker; Radovan Vadovič
  9. Learning in networks: An experimental study using stationary concepts By Berninghaus, Siegfried K.; Neumann, Thomas; Vogt, Bodo
  10. Social vs. risk preferences under the veil of ignorance By Nicola Frignani; Giovanni Ponti
  11. The co-evolution of social capital and financial development By Marc Sangnier
  12. Thorstein Veblen: A Marxist Starting Point By Kirsten Ford and William McColloch
  13. Happiness, habits and high rank: Comparisons in economic and social life By Andrew E. Clark
  14. Intergenerational Analysis of Social Interaction By Brown, Sarah; McHardy, Jolian; Taylor, Karl
  15. Honest Lies By Li Hao; Daniel Houser

  1. By: Cary Deck; Maroš Servátka; Steven Tucker (University of Canterbury)
    Abstract: Charness and Dufwenberg (2006) find that promises increase cooperation and suggest that the behavior of subjects in their experiment is driven by guilt aversion. By modifying the procedures to include a double blind social distance protocol we test an alternative explanation that promise keeping was due to external influence and reputational concerns. Our data are statistically indistinguishable from those of Charness and Dufwenberg and therefore provide strong evidence that their observed effects regarding the impact of communication are due to internal factors and not due to an outside bystander.
    Keywords: Experiment; promises; partnership; guilt aversion; psychological game theory; trust; lies; social distance; behavioral economics; hidden action
    JEL: C70 C91
    Date: 2011–04–11
  2. By: James Alm (Department of Economics, Tulane University)
    Abstract: "Behavioral economics", or the application of methods and evidence from other social sciences to economics, has increased greatly in significance in the last two decades. An important method by which many of its predictions have been tested has been via laboratory experiments. In this paper I survey and assess experimental tests of various applications of behavioral economics to the specific area of public economics, or "behavioral public economics". I discuss the basic elements of behavioral economics, the methodology of experimental economics, applications of experimental methods to behavioral public economics, and topics in which future applications should prove useful.
    Keywords: experimental methods, behavioral economics
    JEL: C9 H0 H3
    Date: 2011–04
  3. By: Oechssler, Jörg
    Keywords: social preferences; finitely repeated games; inequity aversion; ERC
    JEL: C73 C72
    Date: 2011–04–11
  4. By: Araujo, Ricardo Azevedo
    Abstract: In this paper the existence and stability of equilibria in an evolutionary game theory model of the labor market is studied by using the Lyapunov method. The model display multiple equilibria and it is shown that the Nash Equilibria of the static game are evolutionary stable equilibria in the game theory evolutionary set up. In this vein a complete characterization of the dynamics of an evolutionary model of the labor market is provided.
    Keywords: Evolutionary game theory approach; labour market; informal economy; Lyapunov function
    JEL: C73 J23
    Date: 2011–03
  5. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Alexander James (Departement of Economics and Finance, University of Wyoming - University of Wyoming); Stephane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Jason Shogren (Departement of Economics and Finance, University of Wyoming - University of Wyoming)
    Abstract: The field of social psychology explores how a person behaves within the context of other people. The social context can play a substantive role in non-market allocation decisions given peoples choices and values extend beyond the classic market-based exchange institution. Herein we explore how social psychology has affected one aspect of environmental economics: preference elicitation through survey work. We discuss social representation, social isolation, framing through cheap talk, and commitment theory through an oath.
    Keywords: Social psychology, Commitment, Persuasive communication, Preference elicitation
    Date: 2011
  6. By: Thöni, Christian
    Abstract: Antisocial punishment - punishment of pro-social cooperators - has shown to be detrimental for the efficiency of informal punishment mechanisms in public goods games. The motives behind antisocial punishment acts are not yet well understood. This article shows that inequality aversion predicts antisocial punishment in public goods games with punishment. The model by Fehr and Schmidt (1999) allows to derive conditions under which antisocial punishment occurs. With data from three studies on public goods games with punishment I evaluate the predictions. A majority of the observed antisocial punishment acts are not compatible with inequality aversion. These results suggest that the desire to equalize payoffs is not a major determinant of antisocial punishment.
    Keywords: Antisocial punishment, inequality aversion
    JEL: H41 C72 C91
    Date: 2011–04
  7. By: Xiaofei (Sophia) Pan (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: Cooperation is indispensable in human societies, and much progress has been made towards understanding human pro-social decisions. Formal incentives, such as punishment, are suggested as potential effective approaches despite the fact that punishment can crowd out intrinsic motives for cooperation and detrimentally impact efficiency. At the same time, evolutionary biologists have long recognized that cooperation, especially food sharing, is typically efficiently organized in groups living on wild foods, even absent formal economic incentives. Despite its evident importance, the source of this voluntary compliance remains largely uninformed. Drawing on costly signaling theory, and in light of the widely established competitive nature of males, we hypothesize that unique and displayable rewards (trophies) out of competition may trigger male generosity in competitive social environments.
    Keywords: cooperation, competition, gender, trophy, evolution
    Date: 2011–04
  8. By: Maroš Servátka; Steven Tucker; Radovan Vadovič (University of Canterbury)
    Abstract: Should one use words or money to foster trust of the other party if no means of enforcing trustworthiness are available? This paper reports an experiment studying the effectiveness of two types of mechanisms for promoting trust: a costly gift and a costless message as well as their mutual interaction. We nest our findings in the standard version of the investment game. Our data provide evidence that while both stand-alone mechanisms enhance trust, and a gift performs significantly worse than a message. Moreover, when a gift is combined with sending a message, it can be counterproductive
    Keywords: Communication; content analysis; experimental economics; gift giving; investment game; message; trust; trustworthiness
    JEL: C70 C91
    Date: 2011–04–12
  9. By: Berninghaus, Siegfried K.; Neumann, Thomas; Vogt, Bodo
    Abstract: Our study analyzes theories of learning for strategic interactions in networks. Participants played two of the 2 x 2 games used by Selten and Chmura (2008) and in the comment by Brunner, Camerer and Goeree (2009). Every participant played against four neighbors and could choose a different strategy against each of them. The games were played in two network structures: a lattice and a circle. We compare our results with the predictions of different theories (Nash equilibrium, quantal response equilibrium, action-sampling equilibrium, payoff-sampling equilibrium, and impulse balance equilibrium) and the experimental results of Selten and Chmura (2008). One result is that the majority of players choose the same strategy against each neighbor. As another result we observe an order of predictive success for the stationary concepts that is different from the order shown by Selten and Chmura. This result supports our view that learning in networks is different from learning in random matching. --
    Keywords: experimental economics,networks,learning
    JEL: C70 C73 C91 D83 D85
    Date: 2011
  10. By: Nicola Frignani (Università di Ferrara); Giovanni Ponti (Universidad de Alicante)
    Abstract: This paper reports experimental evidence from a Dictator Game experiment in which subjects choose repeatedly one out of four options involving a pair of fixed monetary prizes, one for them, one for another anonymously matched subject. In some sessions, player position (i.e. the identity of the best paid agent, constant across all options) is known in advance before subjects have to make their decision; in other sessions subjects choose “under the veil of ignorance”, not knowing to which player position they will be eventually assigned. We also collect evidence from additional sessions in which the same options correspond to binary lotteries, in which subjects may win the high or the low prize, but their decisions do not affect other participants. We frame subjects’ decisions within the realm of a simple mean-variance utility maximization problem, where the parameter associated to the variance is interpreted, depending on the treatment conditions, as a measure of pure risk aversion, pure inequality aversion, or some combination of the two. We also condition our estimates to subjects’ individual socio-demographic characteristics.
    Keywords: Keywords: dictator games, social preferences, risk preferences, functional identification.
    JEL: D86
    Date: 2011–03
  11. By: Marc Sangnier (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA)
    Abstract: This paper documents the co-evolution of social capital, measured as generalized trust, and financial development over the twentieth century. I use cross generations inherited trust of Americans with foreign ancestors to track trust in their home country in 1913 and 1990. The paper documents a positive cross-section relationship between trust and financial development in 1913. Then, I show that increasing trust is also associated with increasing financial development at the country level over the twentieth century. In other words, countries that experienced larger improvements in trust also experienced a stronger financial development. These results are robust to the introduction of real GDP per capita and trade openness as alternative determinants of financial development.
    Keywords: Financial development ; social capital ; trust
    Date: 2011–04
  12. By: Kirsten Ford and William McColloch
    Abstract: As existing literature attests, in spite of methodological differences Marx and Veblen draw strikingly similar conclusions regarding production, conflict, and alienation in modern existence. We here attempt to establish that similarity in conclusion stems from similarity in approach. After reviewing the existing literature on a Marx-Veblen methodological reconciliation, we recapitulate Marx’s method, making the mediated starting point the locus of discussion.From this vantage point, we then examine Veblen’s own approach to analysis in “The Theory of Business Enterprise” and the conclusions that emerge as they resemble those of Marx. In taking a kindred approach Veblen is able to arrive at an understanding of capitalism in accordance with, and complementary to, Marx’s rendering of the inverted nature of economic life in modernity.
    Keywords: Marxism, Institutionalism, History of Economic Thought: Individuals, Economic Methodology: General JEL Codes: B140, B150, B300, B400
    Date: 2011
  13. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, IZA - Institute for the Study of Labor - IZA, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: The role of money in producing sustained subjective well-being seems to be seriously compromised by social comparisons and habituation. But does that necessarily mean that we would be better off doing something else instead? This paper suggests that the phenomena of comparison and habituation are actually found in a variety of economic and social activities, rendering conclusions regarding well-being policy less straightforward.
    Keywords: comparison ; habituation ; income ; unemployment ; marriage ; divorce ; health ; religion ; policy
    Date: 2011–04–14
  14. By: Brown, Sarah (University of Sheffield); McHardy, Jolian (University of Sheffield); Taylor, Karl (University of Sheffield)
    Abstract: We explore the relationship between the social interaction of parents and their offspring from a theoretical and an empirical perspective. Our theoretical framework establishes possible explanations for the intergenerational transfer of social interaction whereby the social interaction of the parent may influence that of their offspring and vice versa. The empirical evidence, based on four data sets covering Great Britain and the U.S., is supportive of our theoretical priors. We find robust evidence of intergenerational links between the social interaction of parents and their offspring supporting the existence of positive bi-directional intergenerational effects in social interaction.
    Keywords: social interaction, intergenerational transfer
    JEL: D19 H24 H41 H31
    Date: 2011–04
  15. By: Li Hao (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We report data from a two-stage prediction game, where the accuracy of predictions (in the first stage) regarding die roll outcomes (in the second stage) is rewarded using a proper scoring rule. Thus, given the opportunity to self-report the die roll outcomes, participants have an incentive to bias their predictions to maximize elicitation payoffs. However, we find participants to be surprisingly unresponsive to this incentive, despite clear evidence that they cheated when self-reporting die roll outcomes. These data lend support to Akerlof's (1983) suggestion that people may prefer to appear honest without actually being honest. In particular, the vast majority (95%) of our subjects were willing to incur a cost to preserve an honest appearance. At the same time, only 44% exhibited intrinsic preference for honesty. Moreover, we found that after establishing an honest appearance people cheat to the greatest possible extent. These results suggest that “incomplete cheating” behavior frequently reported in the literature can be attributed more to a preference for maintaining appearances than an intrinsic aversion to maximum cheating.
    Keywords: cheating, honest appearance, partial cheating, experimental design
    JEL: C91
    Date: 2011–03

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