nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒08‒15
fifteen papers chosen by
Matthew Baker
City University of New York

  1. Emotions, Sanctions and Cooperation By Mateus Joffily; David Masclet; Charles N. Noussair; Marie-Claire Villeval
  2. Limited Rationality and Strategic Interaction: A Probabilistic Multi-Agent Model By Yves Ortiz; Martin schüle
  3. To game or not to game: teaching transportation planning with board games By Arthur Huang; David Levinson
  4. Path dependence in public-good games By Lisa Bruttel; Tim Friehe
  5. ‘Lead, Follow or Cooperate’: Endogenous Timing & Cooperation in Symmetric Duopoly Games. By Marco Marini; Giorgio Rodano
  6. Agri-environmental attitudes of Chinese farmers â The impact of social and cognitive determinants By Weber, Daniela
  7. The gWillh to Save in China By Ting Yin
  8. Manipulation of Choice Behavior By Manzini, Paola; Mariotti, Marco; Tyson, Christopher J.
  9. Upgrading or Downgrading? \ Framing Effects in Online Shopping Environments \ By Nozomi NAKAJIMA
  10. Ambiguity aversion solves the conflict between efficiency and incentive compatibility By Nabil I. Al-Najjar; Luciano De Castro
  11. Application possibilities of the micro-meso-macro framework in economic geography By Heike Schroeder
  12. Role Selection and Team Performance By Cooper, David J.; Sutter, Matthias
  13. Lies and Biased Evaluation: A Real-Effort Experiment By Rosaz, Julie; Villeval, Marie Claire
  14. Gender Differences in Competitive Balance in Intercollegiate Basketball By Jaret Treber; Rachel Levy; Victor Matheson
  15. Dynamic model of procrastination By Vrany, Martin

  1. By: Mateus Joffily; David Masclet; Charles N. Noussair; Marie-Claire Villeval
    Abstract: We use skin conductance responses and self-reports of hedonic valence to study the emotional basis of cooperation and punishment in a social dilemma. Emotional reaction to free-riding incites individuals to apply sanctions when they are available. The application of sanctions activates a "virtuous emotional circle" that accompanies cooperation. Emotionally aroused cooperators relieve negative emotions when they punish free riders. In response, the free-riders experience negative emotions when punished, and increase their subsequent level of cooperation. The outcome is an increased level of contribution that becomes the new standard or norm. For a given contribution level, individuals attain higher levels of shared satisfaction when sanctioning institutions are in place.<p> Document available soon. <P>Dans cette étude, nous avons utilisé des mesures physiologiques de conductance électrodermales ainsi que des mesures d’auto déclaration relatives aux émotions dans le cadre d’un jeu de contribution volontaire au financement de biens publics avec opportunité de sanction. Les émotions jouent un rôle à la fois sur les décisions de contribution et de sanction. La réaction émotionnelle à l’observation de comportement opportuniste conduit les agents à sanctionner. En retour, les passagers clandestins font l’expérience d’émotions négatives lorsqu’ils sont sanctionnés et augmentent leur niveau de contribution en conséquence.<p> Document disponible bientôt.
    Keywords: Emotions, Sanctions, Cooperation, Experiment, Skin Conductance Responses, Émotions, sanctions, coopération, expérience, mesures physiologiques de conductance électrodermales
    Date: 2011–01–01
  2. By: Yves Ortiz (Study Center Gerzensee); Martin schüle (Institute of Neuroinformatics, University of Zurich and ETH Zurich)
    Abstract: We develop a multi-agent framework based on probabilistic cellular automata theory to describe off-equilibrium dynamics in the context of the economic problem of price adjustment in different strategic situations as investigated experimentally by Fehr and Tyran (2001) and (2008). It is found that the main experimental findings, namely suboptimal aggregate behavior in terms of sluggish adjustment after a fully anticipated money shock, can be reproduced and largely explained by the interaction of sophisticated and naive agents. Furthermore, a range of conceptual issues as e.g. the source of endogenous beliefs on the other players rationality is addressed within our multi-agent framework. We find that, if costs/payoffs act as driver of rational behavior, then endogenous beliefs and consequential aggregate behavior are driven by the particular off-equilibrium time-dependent payoff/cost profile rather than by total off- equilibrium payoffs/costs that naive agents face in the respective strategic situation.
    Date: 2011–08
  3. By: Arthur Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Traditional "chalk and talk" teaching in civil engineering has gradually been replaced with the idea of active learning focusing on encouraging students' knowledge discovery with innovative pedagogical methods and tools. One interesting tool is the board game. This research examines the efficacy of adopting transportation board games as a tool in graduate-level transportation planning and transportation economics classes at the Department of Civil Engineering of the University of Minnesota from 2008 to 2010. In these classes, a weekday night was scheduled for playing transportation board games. Students were asked to evaluate the effectiveness of the games on their learning and to write a self-reflective paper about their findings. The majority of the students reveal that their understanding of the planning process, network deployment, and practical issues, and and their ability to form opinion about transportation planning has been improved. Their summaries on the game economy and its implications on planning validate that their understanding obtained from this game process has met the pedagogical goals. Our analysis further shows that students who are moderately/highly visual, sensing, active, or sequential, all else equal, tend to learn more effectively through this approach than those who are not. Overall, this research suggests that properly incorporating board games into the curriculum can enhance students' learning process in transportation planning.
    Keywords: retail clusters, agent-based model, location choice, distribution pattern
    JEL: R2 R4 A23
    Date: 2011
  4. By: Lisa Bruttel; Tim Friehe
    Abstract: This paper presents experimental evidence that contributions to a public good can be path-dependent for a limited time span. We study a repeated linear public-good game with punishment opportunities. Our data shows that subjects who had experienced a higher marginal return on public-good contributions in rounds 1-10 contributed more to the public good in rounds 11 and 12, even though they faced the same marginal return as the control group in these later rounds. In contrast, di erences in contributions were not significant when comparing subjects bearing the same current costs of punishment points, but having had different costs in the past.
    Keywords: public-good game, team, punishment, path dependence, experiment
    Date: 2011
  5. By: Marco Marini (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo" and CREI, Università di Roma III); Giorgio Rodano (Dipartimento di Informatica e Sistemistica "Antonio Ruberti", Università di Roma "La Sapienza")
    Abstract: The aim of this paper is to extend Hamilton and Slutsky's (1990) endogenous timing game by including the possibility for players to cooperate. At an initial stage players are assumed to announce both their purpose to play early or late a given duopoly game as well as their intention to cooperate or not with their rival. The cooperation and timing formation rule is rather simple: when both players agree to cooperate and play with a given timing, they end up playing their actions coordinately and simultaneously. Otherwise, they play as singletons with the timing as prescribed by their own announcement. We check for the existence of a subgame perfect Nash equilibrium (in pure strategies) of such a cooperation-timing duopoly game. Two main results on the emergence of cooperation are provided. If players' actions in the symmetric duopoly game are strategic substitutes and there is no discount, cooperating early (as a grand coalition) is a subgame perfect equilibrium of the extended timing-cooperation game. Conversely, cooperating late (at period two) represents an equilibrium when playersstrategies are strategic complements. Other equilibria are also possible. Most importantly, our model shows that, in general, the success of cooperation is a¤ected by the endogenous timing of the game. Moreover, the slope of players' best-replies appears crucial both for the success of cooperation as well as for the players' choice of sequencing their market actions.
    Keywords: Endogenous Timing, Cooperation
    JEL: C70 C71 D23 D43
    Date: 2011
  6. By: Weber, Daniela
    Abstract: Chinasâ successfully increased food production during the last 30 years has caused significant negative external impacts and subsequent escalating environmental costs (Ash and Edmonds, 1998). This dilemma has recently become a popular issue and the government attaches great importance towards a more sustainable agricultural production (UNDP, 2006). The challenge is to enhance well-grounded approaches that accomplish of effective agricultural trainings, encouraging farmers to adopt optimized practices. According to recent decision-making theories, a successful implementation is also closely related to the target groupâs social and cognitive preferences. In order to get more information about farmersâ inherent decision-making factors an explorative quantitative survey of 394 farmers was conducted in Shandong Province. Next to descriptive economic and agronomic analyses, a structural equation model gave evidence that beside farmersâ economic reasons, values and guÄnxi-relationships indeed show an influence on the extracted agri-environmental attitude factors as well as on manifest behaviour variables. Concluding results reveal the farmers varying preferences and give explanations out of the social and cognitive paths to explain why they behave different or have other focussed attitudes. Finally, recommendations for more effective training methods are given that consider the farmersâ individual motivations.
    Keywords: China, agri-environmental attitudes, guÄnxi, SEM, values, Land Economics/Use,
    Date: 2011–04
  7. By: Ting Yin (Institute of Social and Economic Research, Osaka University)
    Abstract: In this paper, I discuss the actual conditions and determinants of the saving behavior and wealth holdings of the aged in China, with emphasis on the impact of bequest motives thereon, using micro data from the 2009 gSurvey of Living Preferences and Satisfactionh (urban households) and the 2010 gSurvey of Living Preferences and Satisfactionh (rural households), which were conducted in February 2009 and January 2010, respectively, as part of the Global Center of Excellence (GCOE) Program on gBehavioral Macro-dynamics based on Surveys and Experimentsh of the Graduate School of Economics and the Institute of Social and Economic Research of Osaka University. I found that bequest motives are strong in China, with more than 87 percent of respondents in urban areas, more than 75 percent in rural areas, and more than 85 percent in the country as a whole having a bequest motive, that these bequests are motivated primarily by altruism, that there is little evidence that aged households in China dissave (decumulate their wealth), and that altruistic and selfish bequest motives, especially the latter, increase the saving (or reduce the dissaving) of aged households.
    Keywords: Bequest motives; saving behavior; wealth accumulation; life-cycle model; altruism model
    JEL: D12 D91 E21
    Date: 2011–08
  8. By: Manzini, Paola (University of St. Andrews); Mariotti, Marco (University of St. Andrews); Tyson, Christopher J. (Queen Mary, University of London)
    Abstract: We introduce and study the problem of manipulation of choice behavior. In a class of two-stage models of decision making, with the agent's choices determined by three "psychological variables," we imagine that a subset of these variables can be selected by a "manipulator." To what extent does this confer control of the agent's behavior? Within the specified framework, which overlaps with two existing models of choice under cognitive constraints, we provide a complete answer to this question.
    Keywords: attention, choice function, revealed preference, satisficing, threshold
    JEL: D01 D70
    Date: 2011–07
  9. By: Nozomi NAKAJIMA (Graduate School of Economics, Osaka University)
    Abstract: Recent development in behavioral decision theory reveals the important role of decision environment in the consumer's evaluation and choice processes. Often it is referred as "decision framing." Of particular interest is the online shopping environment, where buyers are usually forced to make their decisions under the sellers' (programmed) guidance on their web sites. How can the decision frames constructed in online shopping environment influence consumers' decision making? What should be done to exploit the characteristics of their framed decisions in the design of online shopping environments? In the present study, we considered an online PC shop as an example because it is one of the most popular and typical online shops and it will help us get insights into the consumers' online-framed decision characteristics. Buyers are usually led to specify the configurations of personal computers, i.e., CPU, memory and hard drive size, type of optical drives, etc., taking their preferences and budgets into account. In the course of specification processes, their decisions are framed in some ways and influenced by them. Among other things, the way the choice alternatives are presented (upgrading/ downgrading, etc.), from which buyers are expected to choose, is of special interest because it can be easily controlled by the sellers. Experimental studies were conducted to investigate the influence of some decision frames including the flow of selection process, the number of alternatives, the price intervals of the alternatives, and the default choice settings. The extremeness aversion, the shifts of the reference points, and the tradeoff between utility and economic loss aversion, are the examples of the involved effects. Above all, particular attention was paid to the default choice settings that provide the total prices as well as the reference points. Based on the results of the experiments, a set of theoretical conclusions and managerial implications of default choice settings are discussed.
    Keywords: online shopping, decision framing, pricing, choice model
    Date: 2011–08
  10. By: Nabil I. Al-Najjar; Luciano De Castro
    Abstract: This note questions the behavioral content of second-order acts and their use in decision theoretic models. We show that there can be no verification mechanism to determine what the decision maker receives under a second-order act. This impossibility applies even in idealized repeated experiments where infinite data can be observed.
    Date: 2010–12–01
  11. By: Heike Schroeder
    Abstract: The micro-meso-macro approach is an analytical framework to study processes of economic evolution. In economic geography it has been hardly taken up so far. Using the example of spatial implications of corporate processes of adaption and renewal after structural interruptions, this paper shows at a conceptual level how the framework could be applied to topics in economic geography. Compared to other approaches, the micro-meso-macro framework has several advantages: It allows to analyse the coevolution between different forms of knowledge in an economic system and the context in which companies operate. By integrating mechanism rules, it also considers the ability of firms to adapt to a changing environment. Furthermore, it is possible to explain the interplay between enterprises and higher levels of analysis like industry sectors or regions through the analytical unit of the rule trajectory. In this paper it is argued not to assign any spatial dimension to the different levels of analysis per se, but to examine the mechanism rules along trajectories of operational rules under a spatial perspective.
    Keywords: evolutionary economic geography, analytical framework, rules, coevolution, meso level, corporate processes of renewal, structural interruptions
    JEL: B52 O18 R11
    Date: 2011–08
  12. By: Cooper, David J. (Florida State University); Sutter, Matthias (University of Innsbruck)
    Abstract: Team success relies on assigning team members to the right tasks. We use controlled experiments to study how roles are assigned within teams and how this affects team performance. Subjects play the takeover game in pairs consisting of a buyer and a seller. Understanding optimal play is very demanding for buyers and trivial for sellers. Teams perform better when roles are assigned endogenously or teammates are allowed to chat about their decisions, but the interaction effect between endogenous role assignment and chat unexpectedly worsens team performance. We argue that ego depletion provides a likely explanation for this surprising result.
    Keywords: role selection in teams, team performance, takeover game, winner's curse, communication, experiment
    JEL: C91 C92
    Date: 2011–07
  13. By: Rosaz, Julie (University of Lyon 2); Villeval, Marie Claire (CNRS, GATE)
    Abstract: This paper presents the results of a laboratory experiment in which workers perform a real-effort task and supervisors report the workers’ performance to the experimenter. The report is non verifiable and determines the earnings of both the supervisor and the worker. We find that not all the supervisors, but at least one third of them bias their report. Both selfish black lies (increasing the supervisor's earnings while decreasing the worker's payoff) and Pareto white lies (increasing the earnings of both) according to Erat and Gneezy (2009)'s terminology are frequent. In contrast, spiteful black lies (decreasing the earnings of both) and altruistic white lies (increasing the earnings of workers but decreasing those of the supervisor) are almost non-existent. The supervisors' second-order beliefs and their decision to lie are highly correlated, suggesting that guilt aversion plays a role.
    Keywords: evaluation, lie-aversion, guilt aversion, self-image, deception, lies, experiments
    JEL: C91 D82 M52
    Date: 2011–07
  14. By: Jaret Treber (Department of Economics, Kenyon College); Rachel Levy (Bessemer Trust); Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: This paper adds to the literature on competitive balance in college sports by comparing men's and women's NCAA basketball. Using data from the Division I National Championships, we find evidence consistent with the idea that women’s college basketball is less competitively balanced than men’s college basketball. We argue that this difference may be explained by a theory of player ability borrowed from evolutionary biology first promulgated by paleontologist Stephen Jay Gould and subsequently utilized in Berri (2004). An implication of this idea is that competitive balance in women’s NCCA basketball will naturally improve over time. This is good news for those who are concerned with the long term success of the sport to the extent that competitive balance in women’s college basketball impacts fan demand. Nevertheless, we discuss why there may be reason to believe that women’s college basketball may not reach the same level of balance as men’s college basketball.
    Keywords: College sports, competitive balance, women’s sports, basketball
    JEL: L83 J16
    Date: 2011–08
  15. By: Vrany, Martin
    Abstract: Procrastination is the notorious tendency to postpone work for tomorrow. This paper presents a formal model of procrastination based on expectations and prospect theory, which differs signficantly from the prevalent model of O’Donoghue and Rabin. Subject is assumed to work on a task for distant reward which depends on the number of periods actually spent working, where the subject faces varying op- portunity costs of working each period before the deadline. In order to assess a hypothesis that procrastination is an evolved and stable habit, the model is rendered dynamic in that past decisions and circumstances affect the present. The model is first explored via qualitative analysis and simulations are performed to further reveal its functionality.
    Keywords: procrastination; dynamic inconsistency; intertemporal choice; prospect theory; hyperbolic discounting; expectations
    JEL: D0 D81 D84 D90 J22
    Date: 2010–10–14

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