nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒07‒02
seven papers chosen by
Matthew Baker
City University of New York

  1. Social capital dynamics and collective action: the role of subjective satisfaction By Leonardo Becchetti; Stefano Castriota; Pierluigi Conzo
  2. When Do We Learn to Cooperate? The Role of Social Learning in Social Dilemmas By James A. Best
  3. Social Dilemmas, Time Preferences and Technology Adoption in a Commons Problem By Reinoud Joosten
  4. Social Networks and Parental Behavior in the Intergenerational Transmission of Religion By Patacchini, Eleonora; Zenou, Yves
  5. Ordering effects and strategic response in discrete choice experiments By Scheufele, Gabriela; Bennett, Jeff
  6. Anticipated regret and self-esteem in the Allais paradox By Emmanuel PETIT (GREThA, CNRS, UMR 5113); Anna TCHERKASSOF (LIP/PC2S); Xavier GASSMANN (INRA)
  7. Consumer behavioural biases in competition: A survey By Huck, Steffen; Zhou, Jidong

  1. By: Leonardo Becchetti (Department of Economics, Universitˆ Tor Vergata); Stefano Castriota (Department of Economics, Universitˆ di Perugia); Pierluigi Conzo (Università di Roma Tor Vergata & EIEF)
    Abstract: In low income countries grass-root collective action is a well known substitute for government provision of public goods. In our research we wonder what is its effect on the law of motion of social capital, a crucial microeconomic determinant of economic development. To this purpose we structure a ?sandwich? experiment in which participants play a public good game (PGG) between two trust games (TG1 and TG2). Our findings show that the change in trustworthiness between the two trust game rounds generated by the PGG treatment is crucially affected by the subjective satisfaction about the PGG rather than by standard objective measures related to PGG players? behavior. These results highlight that subjective satisfaction after collective action has relevant predictive power on social capital creation providing information which can be crucial to design successful self-organized resource regimes.
    Keywords: trust games, public good games, randomized experiment, social capital, subjective wellbeing
    JEL: O12 C93 Z13
    Date: 2011–06
  2. By: James A. Best
    Abstract: In this paper, I look at the interaction between social learning and cooperative behavior. I model this using a social dilemma game with publicly observed sequential actions and asymmetric information about payoffs. I find that some informed agents in this model act, individually and without collusion, to conceal the privately optimal action. Because the privately optimal action is socially costly the behavior of informed agents can lead to a Pareto improvement in a social dilemma. In my model I show that it is possible to get cooperative behavior if information is restricted to a small but non-zero proportion of the population. Moreover, such cooperative behavior occurs in a nite setting where it is public knowledge which agent will act last. The proportion of cooperative agents within the population can be made arbitrarily close to 1 by increasing the infinite number of agents playing the game. Finally, I show that under a broad set of conditions that it is a Pareto improvement on a corner value, in the ex-ante welfare sense, for an interior proportion of the population to be informed.
    Keywords: Asymmetric information, cooperation, efficiency, social learning, social dilemmas.
    JEL: C72 D62 D82 D83
    Date: 2011–06–24
  3. By: Reinoud Joosten
    Abstract: Agents interacting on a body of water choose between technologies to catch Â…fish. One is harmless to the resource, as it allows full recovery; the other yields high immediate catches, but low(er) future catches.Â… Strategic interaction in one 'objective' resource game may induceÂ…Â…Â…Â…Â…Â… several 'subjective' games in the class of social dilemmas. Which unique 'subjective' game is actually played depends crucially on how the agents discount their future payoffs. We examine equilibrium behavior and its consequences on sustainability of the common-pool resource system under exponential and hyperbolic discounting. A suffcient degree of patience on behalf of the agents may lead to equilibrium behavior averting exhaustion of the resource, though full restraint (both agents choosing the ecologically or environmentally sound technology) is not necessarily achieved. Furthermore, if the degree of patience between agents is suffciently dissimilar, the more patient is exploited by the less patient one in equilibrium. We demonstrate the generalizability of our approach developed throughout the paper. We provide recommendations to reduce the enormous complexity surrounding the general cases.
    Keywords: stochastic renewable resource games, hyperbolic & exponential discounting, social dilemmas, sustainability Length 30 pages
    JEL: C72 C73 Q22 Q57
    Date: 2011–06–14
  4. By: Patacchini, Eleonora (Sapienza University of Rome); Zenou, Yves (Stockholm University)
    Abstract: We analyze the intergenerational transmission of the strength of religion focusing on the interplay between family and peer effects. We develop a theoretical model suggesting that both peer quality and parental effort are of importance for the religious behavior of the children. We then bring the model to the data by using a very detailed dataset of adolescent friendship networks in the United States. We find that, for religious parents, the higher is the fraction of religious peers, the more parents put effort in transmitting their religiosity, indicating cultural complementarity. For non-religious parents, we obtain the reverse, indicating cultural substitutability. Concerning the success in transmitting the religious trait, we find that, for religious parents, the fraction of religious peers has only an indirect effect (through parental effort) while, for non-religious parents, there is a lower indirect effect and a statistically significant and sizeable direct effect of peers on the transmission of the non-religious trait.
    Keywords: religion, cultural transmission, peer effects, network fixed effects
    JEL: A14 D85 Z12
    Date: 2011–06
  5. By: Scheufele, Gabriela; Bennett, Jeff
    Abstract: This study explores ordering effects and response strategies in repeated binary discrete choice experiments (DCE). Mechanism design theory and empirical evidence suggest that repeated choice tasks per respondent introduce strategic behavior. We find evidence that the order in which choice sets are presented to respondents may provide strategic opportunities that affect choice decisions (âstrategic responseâ). The findings propose that the âstrategic responseâ does not follow strong cost-minimization but other strategies such as weak cost-minimization or good deal/ bad deal heuristics. Evidence further suggests that participants, as they answer more choice questions, not only make more accurate choices (âinstitutional learningâ) but may also become increasingly aware of and learn to take advantage of the order in which choice sets are presented to them (âstrategic learningâ).
    Keywords: discrete choice experiments, incentive compatibility, mixed logit models, ordering effects, repeated binary choice task, response strategies, Environmental Economics and Policy,
    Date: 2010–03
  6. By: Emmanuel PETIT (GREThA, CNRS, UMR 5113); Anna TCHERKASSOF (LIP/PC2S); Xavier GASSMANN (INRA)
    Abstract: Our experiment aims at studying the impact of self-esteem on risk-prone choices in an Allais-type decision context using hypothetical money. We use an Internet protocol in order to reach a large heterogeneous student population sample. An anticipated regret explanation for the certainty effect implies that self-esteem is a crucial psychological variable in what concerns risky decision, but only when the choice is between a safe option and a risky option. Thus, in our experiment, we hypothesize that low self-esteem people will choose more frequently the safe option (rather than the risky-prone option) than high self-esteem people, whereas low self-esteem and high self-esteem individuals will show the same pattern of choices between two different risk-based options. Our data confirm our hypothesis. Regarding risky choices preferences, we also observe that females, non economists and older people significantly exhibit safer choice preferences than other participants. We find also that men and students in economics are more likely to conform to expected utility theory than females and other social science students respectively. We then discuss what these findings mean for economic regret theory, and suggest that a complete theory of decision-making under risk should introduce both situational and motivational explanations of individual behaviour.
    Keywords: Allais paradox; Risk; Regret aversion; Self-esteem; Internet experiment; Gender differences
    JEL: C91 D81
    Date: 2011
  7. By: Huck, Steffen; Zhou, Jidong
    Abstract: This is a survey of studies that examine competition in the presence of behaviourally biased or boundedly rational consumers. It will tackle questions such as: How does competition and pricing change when consumers are biased? Can inefficiencies that arise from consumer behavioural biases be mitigated by lowering barriers to entry? Do biased consumers make rational ones better or worse off? And will biased consumer behaviour be overcome through learning or education?
    Keywords: Behavioural Economics; Industrial Organization; Biased Consumers
    JEL: D21 D4 L1
    Date: 2011–05

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