nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒06‒04
ten papers chosen by
Matthew Baker
City University of New York

  1. More than outcomes: A cognitive dissonance-based explanation of other-regarding behavior By Astrid Matthey; Tobias Regner
  2. The Algorithmic Revolution in the Social Sciences: Mathematical Economics, Game Theory and Statistical Inference By K. Vela Velupillai
  3. Communication, commitment, and deception in social dilemmas: experimental evidence By G. Camera; M. Casari; M. Bigoni
  4. War Signals: A Theory of Trade, Trust and Conflict By Rohner, D.; Thoenig, M.; Zilibotti, F.
  5. Formation and Persistence of Oppositional Identities By Bisin, Alberto; Patacchini, Eleonora; Verdier, Thierry; Zenou, Yves
  6. Trust, Trustworthiness, Relational Goods and Social Capital: A Cross-Country Economic Analysis By Paul Downward; Tim Pawlowski; Simona Rasciute
  7. Computation in Economics By K. Vela Velupillai; Stefano Zambelli
  8. Do Natural Disasters Affect Trust/Trustworthiness? Evidence from the 2010 Chilean Earthquake By Fleming, David A; Chong, Alberto E.; Bejarano, Hernan D.
  9. Transparency, Efficiency and the Distribution of Economic Welfare in Pass-Through Investment Trust Games By Thomas A. Rietz; Roman M. Sheremeta; Timothy W. Shields; Vernon L. Smith
  10. On the Origins of Gender Roles: Women and the Plough By Alberto F. Alesina; Paola Giuliano; Nathan Nunn

  1. By: Astrid Matthey (Max Planck Institute of Economics, Jena, Germany); Tobias Regner (Max Planck Institute of Economics, Jena, Germany)
    Abstract: Recent research has cast some doubt on the general validity of outcome-based models of social preferences. We develop a model based on cognitive dissonance that focuses on the importance of self-image. An experiment (a dictator game variant) tests the model. First, we find that subjects whose choices involve two psychologically inconsistent cognitions indeed report higher levels of experienced conflict and take more time for their decisions (our proxies for cognitive dissonance). Second, we find support for the main model components. An individual's self-image, the sensitivity to cognitive dissonance, and expected behavior of others have a positive effect on other-regarding behavior.
    Keywords: social preferences, other-regarding behavior, self-image, experiments,,cognitive dissonance, social norms, normative beliefs, expectations
    JEL: C72 C91 D80
    Date: 2011–05–27
  2. By: K. Vela Velupillai
    Abstract: The digital and information technology revolutions are based on algorithmic mathematics in many of their alternative forms. Algorithmic mathematics per se is not necessarily underpinned by the digital or the discrete only; analogue traditions of algorithmic mathematics have a noble pedigree, even in economics. Constructive mathematics of any variety, computability theory and non-standard analysis are intrinsically algorithmic at their foundations. Economic theory, game theory and mathematical finance theory, at many of their frontiers, appear to have embraced the digital and information technology revolutions via strong adherences to experimental, behavioural and so-called computational aspects of their domains - without, however, adapting the mathematical formalisms of their theoretical structures. Recent advances in mathematical economics, game theory, probability theory and statistics suggest that an algorithmic revolution in the social sciences is in the making. In this paper I try to trace the origins of the emergence of this revolution and suggest, via examples in mathematical economics, game theory and the foundations of statistics, where the common elements are and how they may define new frontiers of research and visions. Essentially, the conclusion is that the algorithmic social sciences are unified by an underpinning in Diophantine Decision Problems as their paradigmatic framework
    Keywords: Algorithmic Economics, Algorithmic Game Theory, Algorithmic Statistics, Algorithmic Social Science
    Date: 2010
  3. By: G. Camera; M. Casari; M. Bigoni
    Abstract: Social norms of cooperation are studied under several forms of communication. In an experiment, strangers could make public statements before playing a prisoner’s dilemma. The interaction was repeated indefinitely, which generated multiple equilibria. Communication could be used as a tool to either signal intentions to coordinate on Pareto-superior outcomes, to deceive others, or to credibly commit to actions. Some forms of communication did not promote the incidence of efficient Nash play, and sometimes reduced it. Surprisingly, cooperation suffered when subjects could publicly commit to actions.
    JEL: C70 C90 D80
    Date: 2011–05
  4. By: Rohner, D.; Thoenig, M.; Zilibotti, F.
    Abstract: We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is inhabitated by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form beliefs on the average propensity to trade of the other group. Since conflict disrupts trade, the onset of a conflict signals that the aggressor has a low propensity to trade. Agents observe the history of conflicts and update their beliefs over time, transmitting them to the next generation. The theory bears a set of testable predictions. First, war is a stochastic process whose frequency depends on the state of endogenous beliefs. Second, the probability of future conflicts increases after each conflict episode. Third, "accidental" conflicts that do not reflect economic fundamentals can lead to a permanent breakdown of trust, plunging a society into a vicious cycle of recurrent conflicts (a war trap). The incidence of conflict can be reduced by policies abating cultural barriers, fostering inter-ethnic trade and human capital, and shifting beliefs. Coercive peace policies such as peacekeeping forces or externally imposed regime changes have instead no persistent effects.
    JEL: D74 D83 O15 Q34
    Date: 2011–04–11
  5. By: Bisin, Alberto; Patacchini, Eleonora; Verdier, Thierry; Zenou, Yves
    Abstract: We develop a dynamic model of identity formation that explains why ethnic minorities may choose to adopt oppositional identities (i.e. some individuals may reject or not the dominant culture) and why this behavior may persist over time. We first show that the prevalence of an oppositional culture in the minority group cannot always be sustained in equilibrium. Indeed, because the size of the majority group is larger, there is an
    Keywords: cultural transmission; Ethnicity; peer effects; racism; role models
    JEL: A14 J15
    Date: 2011–05
  6. By: Paul Downward (Loughborough University); Tim Pawlowski (German Sport University Cologne); Simona Rasciute (Loughborough University)
    Abstract: For a sample of 34 countries, this paper examines the impact that relational goods have on trust and, more specifically, trustworthiness; that is the degree of trust placed in others. Relational goods emanate from social interactions, which can be viewed as underpinning the development of social capital in the sense of helping to form trust in society. The relational goods examined comprise both informal activities such as meeting with family and friends, as well as more formal but voluntary association connected with participation in cultural, political, civic, sport and religious organisations. As the measure of trust comprises an ordered variable, a variety of ordered estimators are applied to the data, including attempts to account for the country-specific grouping of observation and, as a consequence, unobserved heterogeneity. The results suggest that whilst informal relational activities tend to generate trustworthiness, consistent with the concept of ‘thick’ trust, along with cultural and civic association and frequent political association, there is less evidence that sports does. In addition, the results suggest that religious association can actually reduce trustworthiness along with less frequent political association. Therefore, the results suggest, that it is the type and frequency of associational activity that contributes to the development of trustworthiness, rather than its existence per se.
    Keywords: Trust, relational goods, social capital
    JEL: D60 I31 C25
    Date: 2011–05
  7. By: K. Vela Velupillai; Stefano Zambelli
    Abstract: This is an attempt at a succinct survey, from methodological and epistemological perspectives, of the burgeoning, apparently unstructured, field of what is often – misleadingly – referred to as computational economics. We identify and characterise four frontier research fields, encompassing both micro and macro aspects of economic theory, where machine computation play crucial roles in formal modelling exercises: algorithmic behavioural economics, computable general equilibrium theory, agent based computational economics and computable economics. In some senses these four research frontiers raise, without resolving, many interesting methodological and epistemological issues in economic theorising in (alternative) mathematical modes
    Keywords: Classical Behavioural Economics, Computable General Equilibrium theory, Agent Based Economics, Computable Economics, Computability, Constructivity, Numerical Analysis
    Date: 2010
  8. By: Fleming, David A; Chong, Alberto E.; Bejarano, Hernan D.
    Abstract: A series of trust games were conducted in Chile to analyze whether the past 2010 earthquake affected trust and trustworthiness in rural communities. Results show that trust levels are invariant between villages affected by the earthquake and villages not affected by this shock (control group). However, we find statistical evidence that trustworthiness has diminished in areas affected by the earthquake. Results are relevant for policy regarding aid and recovery of communities affected by these types of disasters.
    Keywords: Trust games, natural disasters, trustworthiness, Community/Rural/Urban Development, International Development, C93, O13,
    Date: 2011
  9. By: Thomas A. Rietz (Henry B. Tippie College of Business, University of Iowa); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); Timothy W. Shields (Argyros School of Business and Economics, Chapman University); Vernon L. Smith (Economic Science Institute, Chapman University)
    Abstract: We design an experiment to examine welfare and behavior in a multi-level trust game representing a pass through investment in an intermediated market. In a repeated game, an Investor invests via an Intermediary who lends to a Borrower. A pre-experiment one-shot version of the game serves as a baseline and to type each subject. We alter the transparency of exchanges between non-adjacent parties. We find transparency of the exchanges between the investor and intermediary does not significantly affect welfare. However, transparency regarding exchanges between the intermediary and borrower promotes trust on the part of the investor, increasing welfare. Further, this has asymmetric effects: borrowers and intermediaries achieve greater welfare benefits than investors. We discuss implications for what specific aspects of financial market transparency may facilitate more efficiency.
    Keywords: financial intermediation, financial market transparency, pass through securities, multi-level trust games, experiments
    JEL: C72 C91 D72 G14 G21
    Date: 2011
  10. By: Alberto F. Alesina; Paola Giuliano; Nathan Nunn
    Abstract: This paper seeks to better understand the historical origins of current differences in norms and beliefs about the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution and persistence of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture, today have lower rates of female participation in the workplace, in politics, and in entrepreneurial activities, as well as a greater prevalence of attitudes favoring gender inequality. We identify the causal impact of traditional plough use by exploiting variation in the historical geo-climatic suitability of the environment for growing crops that differentially benefited from the adoption of the plough. Our IV estimates, based on this variation, support the findings from OLS. To isolate the importance of cultural transmission as a mechanism, we examine female labor force participation of second-generation immigrants living within the US.
    JEL: J16 N30
    Date: 2011–05

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