nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒07‒21
ten papers chosen by
Matthew Baker
City University of New York

  1. Behavioral Responses to Natural Disasters By Marco Castillo; Michael Carter
  2. Focal Points, Gender Norms and Reciprocation in Public Good Games By David Zetland; Marina Della Giusta
  3. On the Evolution of Preferences By Astrid Gamba
  4. Computable and Dynamical Systems Foundations of Bounded Rationality and Satisficing By K. Vela Velupillai
  5. Subjective expected utility without preferences By Denis Bouyssou; Thierry Marchant
  6. Why Care? Social Norms, Relative Income and the Supply of Unpaid Care By Marina Della Giusta; Nigar Hashimzade; Sarah Jewell
  7. Conceptualising Cluster Evolution: Beyond the Life-Cycle Model? By Ron Martin; Peter Sunley
  8. On the Evolution of Collective Enforcement Institutions: Communities and Courts By Masten, S.E.; Prüfer, J.
  9. Agent-Based Modeling of the El Farol Bar Problem By Shu-Heng Chen; Umberto Gostoli
  10. Toward an Autonomous-Agents Inspired Economic Analysis By Shu-Heng Chen; Tina Yu

  1. By: Marco Castillo (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Michael Carter (Agricultural and Resource Economics, University of California - Davis)
    Abstract: Catastrophic events can dramatically alter existing social and economic relationships. The consequences can be long-lasting and give rise to heterogeneity of behavior across populations. We investigate the impact of a large negative shock on altruism, trust and reciprocity in 30 small Honduran communities diversely affected by Hurricane Mitch in 1998. We conduct a survey of communities and behavioral experiments three and four years after the event. We find that the mean and variance of behavior are nonlinearly related to the severity of the weather shock affecting the community. Also, there is a substitution away from formal local organizations to informal arrangements.
    Keywords: noncooperative games, experimental economics, norms
    JEL: C72 C92 C93
    Date: 2011–06
  2. By: David Zetland (Department of Economics, Wageningen University); Marina Della Giusta (Department of Economics, University of Reading)
    Abstract: We examine the impact of information regarding other people’s choices on individual choice in a public good experiment with two separate treatments. In the implicit treatment, subjects do not see the average contribution of others in their group, but they can calculate it from the information available. In the explicit treatment, subjects see the average contribution of others in their group. If subjects are rational calculating agents as suggested in mainstream economic theory there should be no difference in observed behavior across treatments: agents should use all available information to make decisions. What we see instead is quite different and consistent with the presence of social norms: first, players change their behavior in response to the change in displayed information; second, changes in individual behavior produce identical group outcomes, in terms of total payoffs or efficiency across the two treatments. How does this happen? The display of the average contribution of others results in behavior consistent with a focal point (Schelling, 1960), i.e., more subjects behave as reciprocators (conditioning their contributions on the contributions of others), and fewer behave as cooperators or free-riders (unconditionally contributing a lot or a little, respectively). This change in behavior differs by gender: women behave similarly to men when they see the average contribution by others; when they cannot, they behave differently, favoring unconditional strategies of free-riding or cooperation. Men’s behavior, in contrast to women’s adaption, does not adjust to social cues, as suggested by Croson and Gneezy (2009).
    Keywords: public goods, focal points, social norms, gender, experiments
    JEL: D0
    Date: 2011–06–01
  3. By: Astrid Gamba (Max Planck Institute of Economics, Jena, Germany)
    Abstract: A common feature of the literature on the evolution of preferences is that evolution favors nonmaterialistic preferences only if preference types are observable at least to some degree. We argue that this result is due to the assumption that in each state of the evolutionary dynamics some Bayesian Nash equilibrium is played. We show that under unobservability of preference types, conditional on selecting some self-confirming equilibrium as a rule for mapping preference into behavior, non-selfish preferences may be evolutionarily successful.
    Keywords: evolution of preferences, altruism, learning, self-confirming equilibrium
    JEL: A13 C72 D64 D83
    Date: 2011–07–04
  4. By: K. Vela Velupillai
    Abstract: Formally, the orthodox rational agentís 'Olympian' choices ([14], p.19) are made in a static framework. However, a formalization of consistent choice, underpinned by computability, suggests satisficing in a boundedly rational framework is not only more general than the model of 'Olympian' rationality; it is also consistently dynamic. This kind of naturally process-oriented approach to the formalization of consistent choice can be interpreted and encapsulated within the framework of decision problems - in the formal sense of metamathematics and mathematical logic - which, in turn, is the natural way of formalizing the notion of Human Problem Solving in the Newell-Simon sense. Casting Simon's insights and suggestions on boundedly rational, satisficing and adaptive choice in the formalisms of time computational complexity theory and algorithmic dynamics makes it possible to take some small first steps in the direction of a formal demonstration of this proposition. A more complete attempt would require the additional consideration of space computational complexity, which will be the next step in this research program. The latter consideration would allow one to go beyond the P?=NP conundrum and thereby justify the relative, implicit unimportance, Simon gave this issue
    Keywords: Bounded Rationality, Decision Problems, Satisficing, Computability
    JEL: C63 C65 C69
    Date: 2011
  5. By: Denis Bouyssou (LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - CNRS : UMR7024 - Université Paris Dauphine - Paris IX); Thierry Marchant (Department of Data Analysis - Ghent University)
    Abstract: This paper proposes a theory of subjective expected utility based on primitives only involving the fact that an act can be judged either "attractive" or "unattractive". We give conditions implying that there are a utility function on the set of consequences and a probability distribution on the set of states such that attractive acts have a subjective expected utility above some threshold. The numerical representation that is obtained has strong uniqueness properties.
    Keywords: Subjective Expected Utility ; Conjoint Measurement
    Date: 2011–06–14
  6. By: Marina Della Giusta (Department of Economics, University of Reading); Nigar Hashimzade (Department of Economics, University of Reading); Sarah Jewell (Department of Economics, University of Reading)
    Abstract: We focus on the role of conformity with social norms and concern with relative income in the decision to supply unpaid care for parents. Individuals have different propensities to be influenced by both relative income and social norms, and face a time constraint on the provision of both paid work (which increases their income) and unpaid care. We estimate our model with a sample drawn from the British Household Panel Survey to assess these effects empirically, estimating both the supply of unpaid care and the effect on utility of different preferences for relative income and unpaid care. We find that providing care decreases individual utility: long care hours are bad for carers (and care recipients). Women feature disproportionately amongst care providers and their motivations for care provision differ to men's, both in respect to the importance attached to relative income and to conformity with social norms. After controlling for other factors, men are more envious than women (attach more weight to relative income) and indi¤erent to social norms in relation to caring, whereas the opposite holds for women, so status races are bad for the supply of care within families and particularly men's supply. This is an issue as caring (in right amounts) can be good for carers too if they agree with caring norms, even when they prefer paid work to caring (as men do). We discuss implications for care provision and working arrangements.
    Keywords: care, unpaid work, social norms, relative income
    JEL: J22 Z13 D01 D13
    Date: 2011–07–05
  7. By: Ron Martin; Peter Sunley
    Abstract: Although the literature on the evolution of industrial clusters is not vast, a preferred approach has already become evident, based around the idea of a cluster 'life-cycle'. This approach has several limitations. In this paper we explore a different conception of cluster evolution drawing on the 'adaptive cycle' model that has been developed in evolutionary ecology. Using this model, cluster evolution is viewed as an adaptive process with different possible outcomes based on episodic interactions of nested systems. Though not without limitations, this approach offers greater scope as a framework for shaping the research agenda into the evolution of clusters.
    Keywords: Clusters, Evolution, Life-cycle model, Complex systems, Adaptive cycle model
    JEL: R00 R1 R3
    Date: 2011–07
  8. By: Masten, S.E.; Prüfer, J. (Tilburg University, Center for Economic Research)
    Abstract: Impersonal exchange has been a major driver of economic development. But transactors with no stake in maintaining an ongoing relationship have little incentive to honor deals. Therefore, all economies have developed institutions to support honest trade and realize the gains of impersonal exchange. We analyze the relative capacities of communities (or social networks) and courts to secure cooperation among heterogeneous, impersonal transactors. We find that communities and courts are complementary in the sense that they tend to support cooperation for different sets of transactions but that the existence of courts weakens the effectiveness of community enforcement. By relating the effectiveness of enforcement institutions to changes in the cost and risks of long-distance trade, driven in part by improvement in shipbuilding methods, our analysis also provides an explanation for the emergence of the medieval Law Merchant and its subsequent supersession by state courts.
    Keywords: Institutions;Contract Enforcement;Communities;Courts;Social Networks;Law Merchant;Lex Mercatoria;Commercial Revolution.
    JEL: D02 D71 N43 P48
    Date: 2011
  9. By: Shu-Heng Chen; Umberto Gostoli
    Abstract: In this paper, we study the self-coordination problem as demonstrated by the well-known El Farol problem (Arthur, 1994), which has later become what is known as the minority game in the econophysics community. While the El Farol problem or the minority game has been studied for almost two decades, existing studies are mostly only concerned with efficiency. The equality issue, however, has been largely neglected. In this paper, we build an agent-based model to study both efficiency and equality and ask whether a decentralized society can ever possibly self-coordinate a result with the highest efficiency while also maintaining the highest degree of equality. Our agent-based model shows the possibility of achieving this social optimum. The two key determinants to make this happen are social preferences and social networks. Hence, not only doe institutions (networks) matter, but individual characteristics (preferences) also matter. The latter are open to human-subject experiments for further examination.
    Keywords: El Farol Bar problem, Social Preferences, Social Networks, Self-Organization, Emergence of Coordination.
    Date: 2011
  10. By: Shu-Heng Chen; Tina Yu
    Abstract: This paper demonstrates the potential role of autonomous agents in economic theory. We first dispatch autonomous agents, built by genetic programming, to double auction markets. We then study the bargaining strategies discovered by them, and from there an autonomous-agent-inspired economic theory with regard to the optimal procrastination is derived.
    Keywords: Agent-Based Double Auction Markets, Autonomous Agents, Genetic Programming, Bargaining Strategies, Monopsony, Procrastination Strategy
    Date: 2011

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