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on Evolutionary Economics |
| By: | Rothe, Jorn |
| Abstract: | This paper formulates a rationality concept for extensive games in which deviations from rational play are interpreted as evidence of irrationality. Instead of confirming some prior belief about the nature of nonrational play, we assume that such a deviation leads to genuine uncertainty. Assuming complete ignorance about the nature of non-rational play and extreme uncertainty aversion of the rational players, we formulate an equilibrium concept on the basis of Choquet expected utility theory. Equilibrium reasoning is thus only applied on the equilibrium path, maximin reasoning applies off the equilibrium path. The equilibrium path itself is endogenously determined. In general this leads to strategy profiles differ qualitatively from sequential equilibria, but still satisfy equilibrium and perfection requirements. In the centipede game and the finitely repeated prisoners’ dilemma this approach can also resolve the backward induction paradox. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/37541/&r=evo |
| By: | Torero, Maximo; Viceisza, Angelino |
| Abstract: | We conduct framed trust games using contract dairy farmers in Vietnam as first movers to assess the impact of potential collusion on trust. Disaggregated analysis suggests that female farmers are more likely to trust overall, but are also more responsive to the addition of a third party and potential collusion. A third party induces them to trust at higher levels, but potential collusion between the trustee and the third party also induces them to trust at lower levels. Our findings corroborate well with existing studies on gender differences in decision making, which suggest that women's social preferences are more context-specific than men's. |
| Keywords: | collusion, field experiment, Gender, trust game, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1100&r=evo |
| By: | Boettke, Peter |
| Abstract: | James Scott has written a detailed ethnography on the lives of the peoples of upland Southeast Asia who choose to escape oppressive government by living at the edge of their civilization. To the political economist the fascinating story told by Scott provides useful narratives in need of analytical exposition. There remains in this work a “plea for mechanism”; the mechanisms that enable social cooperation to emerge among individuals living outside the realm of state control. Social cooperation outside the formal rules of governance, nevertheless require “rules” of social intercourse, and techniques of “enforcement” to ensure the disciplining of opportunistic behavior. |
| Keywords: | economic development; self-regulation; political economy; peasant economy |
| JEL: | O17 P48 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32374&r=evo |
| By: | Heinz, Matthias; Juranek, Steffen; Rau, Holger A. |
| Abstract: | We analyze dictator allocation decisions in an experiment where the recipients have to earn the pot to be divided with a real-effort task. As the recipients move before the dictators, their effort decisions resemble the first move in a trust game. Depending on the recipients' performance, the size of the pot is either high or low. We compare this real-effort treatment to a baseline treatment where the pot is a windfall gain and where a lottery determines the pot size. In the baseline treatment, reciprocity cannot play a role. We find that female dictators show reciprocity and decrease their taking-rates significantly in the real-effort treatment. This treatment effect is larger when female dictators make a decision on recipients who successfully generated a large pot compared to the case where the recipients performed poorly. By contrast, there is no treatment effect with male dictators, who generally exhibit more sefish behavior. -- |
| Keywords: | Gender,Reciprocity,Dictator Game,Real Effort |
| JEL: | C72 C91 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:24&r=evo |
| By: | Ramon Marimon; Juan Pablo Nicolini; Pedro Teles |
| Abstract: | We study the interplay between competition and trust as efficiency enhancing mechanisms in the private provision of money. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a bound on efficiency. Stationary inflation must be non-negative and, therefore, the Friedman rule cannot be achieved.<br>The quality of money can only be observed after its purchasing capacity is realized. In that sense money is an experience good. |
| JEL: | E40 E50 E58 E60 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201118&r=evo |
| By: | Baddeley, M. |
| Abstract: | Psychological and sociological factors constrain economic decision-making in many contexts including the online world. Behavioural economics and economic psychology emphasise that people will make mistakes in processing information and in planning for the future; these mistakes will also distort learning processes. Emotions and visceral factors will play a key role - not only aecting people's actions but also distorting the interactions between information, learning and choices. This will have wide-ranging implications for online behavior and information security management, making people more vulnerable to security/privacy abuses including hacking, spam attacks, phishing, identity theft and online financial exploitation. These vulnerabilities raise crucial policy questions - recently made more pressing in the light of recent phone-hacking scandals in the UK. This paper outlines some of the behavioural factors affecting people's online behaviour and analyses real-world reactions to online fraud using evidence from the British Crime Survey 2009-10. |
| JEL: | D18 D83 K42 |
| Date: | 2011–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1147&r=evo |
| By: | Lars Peter Metzger |
| Abstract: | Second price allpay auctions (wars of attritions) have an evolutionarily stable equilibrium in pure strategies if valuations are private information. I show that for any level of uncertainty there exists a pure deviation strategy close to the equilibrium strategy such that for some valuations the equilibrium strategy has a selective disadvantage against the deviation if the population mainly plays the deviation strategy. There is no deviation strategy with this destabilizing property for all valuations if the distribution of valuations has a monotonic hazard rate. I argue that in the Bayesian game studied here, a mass deviation can be caused by the entry of a small group of agents. Numeric calculations indicate that the closer the deviation strategy to the equilibrium strategy, the less valuations are destabilizing. I show that the equilibrium strategy does not satisfy continuous stability. |
| Keywords: | Continuous Strategies, Evolutionary Stability, War of Attrition, Strict Equilibrium, Neighborhood Invader Strategy, Continuous Stability, Evolutionary Robustness |
| JEL: | C72 C73 D44 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse09_2011&r=evo |
| By: | Gerdes, Christer (SOFI, Stockholm University); Gränsmark, Patrik (SOFI, Stockholm University); Rosholm, Michael (Aarhus School of Business) |
| Abstract: | We examine rational learning among expert chess players and how they update their beliefs in repeated games with the same opponent. We present a model that explains how equilibrium play is affected when players change their choice of strategy when receiving additional information from each encounter. We employ a large international panel dataset with controls for risk preferences and playing skills whereby the latter accounts for ability. Although expert chess players are intelligent, productive and equipped with adequate data and specialized computer programs, we find large learning effects. Moreover, as predicted by the model, risk-averse players learn substantially faster. |
| Keywords: | rational learning, risk aversion, beliefs |
| JEL: | C73 D83 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5862&r=evo |
| By: | Szirmai, Adam (UNU-MERIT, and Maastricht Graduate School of Governance, Maastricht University) |
| Abstract: | This paper was prepared for the Angus Maddison Memorial conference, held in November 2010 at the International Institute of Social History in Amsterdam. The paper reflects on Angus Maddison's contributions to development economics. It focuses on the following issues: 1. quantification in development economics and the framework of proximate and ultimate causality in growth and development; 2 the debate about levels of GDP per capita in the middle of the eighteenth century; 3 Maddison versus the Malthusians; 4 measurement of Chinese Economic Performance in the long run; 5. the impact of Western expansion on the non-Western world and 6. the role of institutions in economic development. |
| Keywords: | Economic Growth, Development Economics, GDP per capita, China, Western Expansion, Institutions |
| JEL: | N10 O10 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2011035&r=evo |
| By: | Itzhak Gilboa (Tel-Aviv University; HEC, Paris; Cowles Foundation, Yale University); Larry Samuelson (Cowles Foundation, Yale University); David Schmeidler (Ohio State University; Tel-Aviv University) |
| Abstract: | We present a model of inductive inference that includes, as special cases, Bayesian reasoning, case-based reasoning, and rule-based reasoning. This unified framework allows us to examine, positively or normatively, how the various modes of inductive inference can be combined and how their relative weights change endogenously. We establish conditions under which an agent who does not know the structure of the data generating process will decrease, over the course of her reasoning, the weight of credence put on Bayesian vs. non-Bayesian reasoning. We show that even random data can make certain theories seem plausible and hence increase the weight of rule-based vs. case-based reasoning, leading the agent in some cases to cycle between being rule-based and case-based. We identify conditions under which minmax regret criteria will not be effective. |
| Keywords: | Induction, Bayesian updating, Case-Based Reasoning, Inference |
| JEL: | C1 D8 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1811&r=evo |