nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒05‒24
eleven papers chosen by
Matthew Baker
City University of New York

  1. Cognitive load in the multi-player prisoner's dilemma game By Duffy, Sean; Smith, John
  2. Patience, Cognitive Skill and Coordination in the Repeated Stag Hunt By Omar Al-Ubaydli; Garett Jones; Jaap Weel
  3. New Insights into Conditional Cooperation and Punishment from a Strategy Method Experiment By Cheung, Stephen L.
  4. Anatomy of Stigmatized Behavior: Peer Influence and Relative Concern By Chen, Xi
  5. Quality and quantity: the role of social interactions in individual health By Fiorillo, D;; Sabatini, F;
  6. Dynamics and Stagnation in the Malthusian Epoch By Quamrul Ashraf; Oded Galor
  7. The Role of Theory in Field Experiments By David Card; Stefano DellaVigna; Ulrike Malmendier
  8. Efficiency, equality and reciprocity in social preferences: A comparison of students and a representative population. By Cappelen, Alexander W.; Nygaard, Knut; Sørensen, Erik Ø.; Tungodden, Bertil
  9. Agency and the Construction of Social Preference: Between Inequality Aversion and Prosocial Behavior By Shoham Choshen-Hillel; Ilan Yaniv
  10. Can we manage first impressions in cooperation problems? An experimental study on “Broken (and Fixed) Windows” By Christoph Engel; Sebastian Kube; Michael Kurschilgen
  11. On the institutional innovation process : EU regulation through an evolutionary lens By Evita Paraskevopoulou

  1. By: Duffy, Sean; Smith, John
    Abstract: We find that differences in the ability to devote cognitive resources to a strategic interaction imply differences in strategic behavior. In our experiment, we manipulate the availability of cognitive resources by applying a differential cognitive load. In cognitive load experiments, subjects are directed to perform a task which occupies cognitive resources, in addition to making a choice in another domain. The greater the cognitive resources required for the task implies that fewer such resources will be available for deliberation on the choice. Although much is known about how subjects make decisions under a cognitive load, little is known about how this affects behavior in strategic games. We run an experiment in which subjects play a repeated multi-player prisoner's dilemma game under two cognitive load treatments. In one treatment, subjects are placed under a high cognitive load (given a 7 digit number to recall) and subjects in the other are placed under a low cognitive load (given a 2 digit number). We find that the individual behavior of the subjects in the low load condition converges to the Subgame Perfect Nash Equilibrium prediction at a faster rate than those in the high load treatment. However, we do not find the corresponding relationship involving outcomes in the game. Specifically, there is no evidence of a significantly different convergence of game outcomes across treatments. As an explanation of these two results, we find evidence that low load subjects are better able to adjust their choice in response to outcomes in previous periods.
    Keywords: cognitive resources; experimental economics; experimental game theory; public goods game
    JEL: C72 C91
    Date: 2011–05–11
  2. By: Omar Al-Ubaydli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Garett Jones (Department of Economics, George Mason University); Jaap Weel (Department of Economics, George Mason University)
    Abstract: Coordination games have become a critical tool of analysis in fields such as development and institutional economics. Understanding behavior in coordination games is an important step towards understanding the differing success of teams, firms and nations. This paper investigates the relationship between personal attributes (cognitive ability, risk-aversion, patience) and behavior and outcomes in coordination games, an issue that, to the best of our knowledge, has never been studied before. For the repeated coordination game that we consider, we find that: (1) cognitive ability has no bearing on any aspect of behavior or outcomes; (2) pairs of players who are more patient are more likely to coordinate well and earn higher payoffs; and (3) risk-aversion has no bearing on any aspect of behavior or outcomes. These results are robust to controlling for personality traits and demographic characteristics.
    Keywords: coordination, IQ, personality, discount rate, patience, risk-aversion
    JEL: D02 D23 O12 O43
    Date: 2011–05
  3. By: Cheung, Stephen L. (University of Sydney)
    Abstract: This paper introduces new experimental designs to enrich understanding of conditional cooperation and punishment in public good games. The key to these methods is to elicit complete contribution or punishment profiles using the strategy method. It is found that the selfish bias in conditional cooperation is made significantly worse when other players contribute more unequally. Contingent punishment strategies are found to increase with decreasing contributions by the target player and also increasing contributions by a third player. "Antisocial" punishments are not directed specifically toward high contributors, but may be motivated by pre-emptive retaliation against punishment a player expects to incur.
    Keywords: conditional cooperation, selfish bias, punishment, public good experiment, strategy method
    JEL: C72 C91 D70 H41
    Date: 2011–05
  4. By: Chen, Xi
    Abstract: This paper is based on an ongoing joint work with David Sahn and Xiaobo Zhang.
    Keywords: Social Stigma, Peer Influences, Relative Concern, Blood Donation, China, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Food Security and Poverty, Health Economics and Policy, Institutional and Behavioral Economics, International Development, Labor and Human Capital, Research Methods/ Statistical Methods, Risk and Uncertainty, JEL: I32, J22, D13, D63,
    Date: 2011–05
  5. By: Fiorillo, D;; Sabatini, F;
    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 Tthe role of satisfaction in interpersonal relations.
    Keywords: health; well-being; satisfaction; social interactions; social capital; family; Italy
    JEL: I12 I18 Z1
    Date: 2011–04
  6. By: Quamrul Ashraf; Oded Galor
    Abstract: This paper examines the central hypothesis of the influential Malthusian theory, according to which improvements in the technological environment during the pre-industrial era had generated only temporary gains in income per capita, eventually leading to a larger, but not significantly richer, population. Exploiting exogenous sources of cross-country variations in land productivity and the level of technological advancement the analysis demonstrates that, in accordance with the theory, technological superiority and higher land productivity had significant positive effects on population density but insignificant effects on the standard of living, during the time period 1-1500 CE.
    JEL: J1 N0 O0
    Date: 2011–05
  7. By: David Card; Stefano DellaVigna; Ulrike Malmendier
    Abstract: We propose a new classification of experiments that captures the extent to which the experimental design and analysis are linked to economic theory. We then use this system to classify all published field experiments in the five top economics journals from 1975 to 2010. We find that the vast majority of field experiments (68%) are Descriptive studies that lack any explicit model; 18% are Single Model studies that test a single model-based hypothesis; 6% are Competing Models studies that test competing model-based hypotheses; and 8% are Parameter Estimation studies that estimate structural parameters in a completely specified model. Using the same system to classify laboratory experiments published over the same period, we find that economic theory has played a more central role in the laboratory than in the field. Finally, we discuss in detail three sets of field experiments, on gift exchange, on charitable giving, and on negative income tax, that illustrate both the benefits and the potential costs of a tighter link between experimental design and theoretical underpinnings.
    JEL: C9 C93
    Date: 2011–05
  8. By: Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Nygaard, Knut (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: The debate between Engelmann and Strobel (2004, 2006) and Fehr, Naef, and Schmidt (2006) highlights the important question of the extent to which lab experiments on student populations can serve to identify the motivational forces present in society at large. We address this question by comparing the lab behavior of a student group and a non-student group, where the non-student group on all observable factors is almost identical to the representative adult population in Norway. All participants take part in exactly the same lab experiment. Our study shows that students may not be informative of the role of social preferences in the broader population. We nd that the representative participants differ fundamentally from students both in their level of selfishness and in the relative importance assigned to different moral motives. It is also interesting to note that while we do not find any substantial gender differences among the students, males and females in the representative group differ fundamentally in their moral motivation.
    Keywords: Representative sample; Social preferences; Laboratory experiment.
    JEL: C91 D63
    Date: 2010–11–15
  9. By: Shoham Choshen-Hillel; Ilan Yaniv
    Abstract: The term “social preference” refers to decision makers’ satisfaction with their own outcomes and those attained by comparable others. The present research was inspired by what appears to be a discrepancy in the literature on social preferences – specifically, between a class of studies demonstrating people’s concern with inequality and others documenting their motivation to increase social welfare. We propose a theoretical framework to account for this puzzling difference. In particular, we argue that a characteristic of the decision setting – an individual’s role in creating the outcomes, referred to as agency – critically affects decision makers’ weighting of opposing social motives. Namely, in settings where people can merely judge the outcomes, but cannot affect them (“low agency”), their concern with inequality figures prominently. In contrast, in settings where people determine the outcomes for themselves and others (“high agency”), their concern with the welfare of others is prominent. Three studies employing a new salary-allocation paradigm document a robust effect of agency. In the high-agency condition participants had to assign salaries, while in the low-agency condition they indicated their satisfaction with equivalent predetermined salaries. We found that compared with low-agency participants, high-agency participants were less concerned with disadvantageous salary allocations and were even willing to sacrifice a portion of their pay to better others’ outcomes. The effects of agency are discussed in connection to inequality aversion, social comparison, prosocial behavior, and preference construction.
    Date: 2011–05
  10. By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Sebastian Kube (Max Planck Institute for Research on Collective Goods, Bonn); Michael Kurschilgen (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: Cooperation problems are at the heart of many everyday situations. In this paper, we propose a very simple and light-handed mechanism to sustain cooperation and test its performance in a rich laboratory environment. The mechanism moderates cooperation by controlling experiences, more specifically, it "manipulates" subjects’ initial beliefs by providing them with selective information about (un)cooperative behavior in other, unrelated, groups. We observe that contributions are considerably sensitive to such selective information. First impressions participants happen to make predict subsequent behavior. Our results, however, suggest an asymmetry in the strength of the reaction – which might pose a limit on the effectiveness of the mechanism in natural settings.
    Date: 2011–03
  11. By: Evita Paraskevopoulou
    Abstract: The focal point of this paper is the study of the process of emergence of novel institutions and the identification of factors that may influence the outcome of this process. We view inst accepted sets of rules that influence We consider regulations as endogenously emerging institutions that evolve in accordance to other socioeconomic factors and analyze the regulatory process at each of its stages adopting an evolutionary approach. Evidence shows that the regulatory process resembles the innovation process as it can be viewed as a process of knowledge accumulation and transmission that is facilitate empirically contextualized in the European political system, the detergents industry and specific regulations formed at European level. Data is drawn by secondary resour of public and private stakeholders participating in the process
    Keywords: Evolutionary theory, Institutions, Regulation, Policy
    JEL: K20 L50 L65 O25 O43
    Date: 2011–04

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