nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒09‒16
twelve papers chosen by
Matthew Baker
City University of New York

  1. Delegating to a Powerless Intermediary: Does It Reduce Punishment? By Grossman, Zachary; Oexl, Regine
  2. Trust, Reciprocity and Rules By Thomas A. Rietz; Eric Schniter; Roman M. Sheremeta; Timothy W. Shields
  3. Preferences for Consistency By Falk, Armin; Zimmermann, Florian
  4. Economic Emergence: an Evolutionary Economic Perspective By John Foster; J. Stan Metcalfe
  5. Vote-Buying and Reciprocity By Frederico Finan; Laura A. Schechter
  6. To vote or to abstain? An experimental study or first past the poste and PR elections By André Blais; Jean-Benoît Pilet; Karine Van Der Straeten; Jean-François Laslier; Maxime Heroux-Legault
  7. Social Capital and Online Games By Christoph Safferling
  8. Eliciting risk and time preferences under induced mood states By Drichoutis, Andreas; Nayga, Rodolfo
  9. The Value of social networks in rural Paraguay By Ligon, Ethan A.; Schechter, Laura
  10. Endogenous categorization and group inequality By Alexandre, Michel
  11. No-Envy, Efficiency, and Collective Rationality By Sakamoto, Norihito
  12. Behavioural Characteristics and Financial Distress By Yvonne McCarthy

  1. By: Grossman, Zachary; Oexl, Regine
    Abstract: Beyond the classical reasons of efficiency, commitment, the distribution of information, or incentive provision, a person may also delegate decision rights so as to avoid blame for an unpopular or immoral decision. We show that by delegating to an intermediary, a dictator facing an allocation decision can effectively shift moral responsibility onto the delegee even when doing so necessarily eliminates the possibility of a fair outcome. Dictators who choose selfishly via an intermediary are punished less and earn greater profits than those who directly choose a selfish outcome, while the intermediary is punished more.
    Keywords: intermediation, delegation, punishment, responsibility, attribution, blame shifting, experimental economics, behavioral economics, Behavioral Economics, Economic Theory
    Date: 2011–08–30
  2. By: Thomas A. Rietz (Henry B. Tippie College of Business, University of Iowa); Eric Schniter (Economic Science Institute, Chapman University); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); Timothy W. Shields (Argyros School of Business and Economics, Chapman University)
    Abstract: In the absence of enforceable contracts, many economic and personal interactions rely on trust and reciprocity. Research shows that although this reliance often works well, sometimes it breaks down. Simple rules mandating minimum standards on reciprocation prevent the most egregious trust violations, but may also undermine behavior that would have otherwise produced higher overall economic welfare. We test the efficacy of exogenously imposed minimum return rules using experimental trust games. We find that rules fail to increase trust and trustworthiness. Thus low minimum standards significantly decrease economic welfare. Although sufficiently restrictive rules restore welfare, trust and trustworthy behavior never returns.
    Keywords: trust games, experiments, reputation, information, reciprocity
    JEL: C72 C91 D72
    Date: 2011
  3. By: Falk, Armin; Zimmermann, Florian
    Abstract: .
    Keywords: charitable giving; consistency preferences; early commitment; experiments; social influence
    JEL: C91 D64
    Date: 2011–08
  4. By: John Foster; J. Stan Metcalfe
    Abstract: The standard neoclassical approach to economic theorizing excludes, by definition, economic emergence and the related phenomenon of entrepreneurship. We explore how the most economic of human behaviours, entrepreneurship, came to be largely excluded from mainstream economic theory. In contrast, we report that evolutionary economists have acknowledged the importance of understanding emergence and we explore the advances that have been made in this regard. We go on to argue that evolutionary economics can make further progress by taking a more 'naturalistic' approach to economic evolution. This requires that economic analysis be fully embedded in complex economic system theory and that associated understandings as to how humans react to states of uncertainty be explicitly dealt with. We argue that 'knowledge,' because of the existence of uncertainty is, to a large degree 'conjectural' and, thus, is closely linked to our emotional states. Our economic behaviour is also influenced by the reality that we, and the systems that we create, are dissipative structures. Thus, we introduce the notions of 'energy gradients' and 'knowledge gradients' as essential concepts in understanding economic emergence and resultant economic growth.
    Keywords: Length 34 pages
    Date: 2011–06
  5. By: Frederico Finan; Laura A. Schechter
    Abstract: While vote-buying is common, little is known about how politicians determine who to target. We argue that vote-buying can be sustained by an internalized norm of reciprocity. Receiving money engenders feelings of obligation. Combining survey data on vote-buying with an experiment-based measure of reciprocity, we show that politicians target reciprocal individuals. Overall, our findings highlight the importance of social preferences in determining political behavior.
    JEL: H23 H41 O1
    Date: 2011–09
  6. By: André Blais (UdeM - Université de Montréal - Université de Montréal); Jean-Benoît Pilet (Université Libre de Bruxelles - Département de Science Politique); Karine Van Der Straeten (CNRS, Toulouse School of Economics - [-]); Jean-François Laslier (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Maxime Heroux-Legault (Université de Montréal - [-])
    Abstract: We examine through an experimental design how rational and non-rational considerations affect the decision to vote or to abstain in First Past the Post and PR elections. We show that in both types of elections, but particularly so under PR, a majority of subjects do not make the "right" decision, that is, they do not choose the option that is the most beneficial to them, given. We also demonstrate that a social norm such as sense of civic duty plays a bigger role, even in the lab, and particularly so in PR elections. We suggest that civic duty has a greater impact under PR because this electoral system has a more complicated formula, making it more difficult for voters to realize that their vote is unlikely to substantially affect the outcome of the election.
    Keywords: Experiments, Voting, First Past the Post, Proportional Representation, Civic Duty
    Date: 2011–08–24
  7. By: Christoph Safferling (Institut für Betriebswirtschaftslehre, Universität Wien, Austria)
    Abstract: We use data from an online game economy and econometric matching methods to test whether social capital of players has an impact on game success. Membership in a 'clan', a voluntary organization of players, positively impacts game success. Hence, social capital has a positive effect on outcomes. Yet, top performers do not gain from access to this social capital.
    JEL: A13 C99 D10 D12
    Date: 2011–09–02
  8. By: Drichoutis, Andreas; Nayga, Rodolfo
    Abstract: We test whether induced mood states have an effect on elicited risk and time preferences in a conventional laboratory experiment. We jointly estimate risk and time preferences and use a mixture specification that allows choices to be consistent with Expected Utility theory or with probability weighting. Time preferences between subjects in the control, positive mood, and negative mood treatments are not statistically significantly different. However, for choices consistent with Expected Utility Theory, we find that subjects induced into a negative mood exhibit higher risk aversion than those in either the control treatment or the positive mood treatment. For choices that are consistent with probability weighting, we find that positive mood increases risk aversion. Results also suggest that risk preferences are affected by whether a cognitively demanding task precedes a risk preference elicitation task or whether subjects were placed in a gender-specific session rather than a mixed-gender session.
    Keywords: discount rates; risk aversion; lab experiment; mood; affect
    JEL: D81 D00 C91
    Date: 2010–12
  9. By: Ligon, Ethan A.; Schechter, Laura
    Abstract: We conduct field experiments in rural Paraguay to measure the value of reciprocity within social networks in a set of fifteen villages. These experiments involve conducting dictator- type games; different treatments involve manipulating the information and choice that individuals have in the game. These different treatments allow us to measure and distinguish between different motives for giving in these games. The different motives we're able to measure include a general benevolence, directed altruism, fear of sanctions, and reciprocity within the social network. We're further able to draw inferences from play in the games regarding the sorts of impediments to trade which must restrict villagers' ability to share in states of the world when no researchers are present running experiments and measuring outcomes.
    Keywords: Agricultural and Resource Economics
    Date: 2011–02–01
  10. By: Alexandre, Michel
    Abstract: The objective of this paper is to integrate economic and sociological elements in a model of human capital accumulation by phenotypically distinct individuals. Both kinds of elements are influenced by the degree of categorization endogeneity (CE), meant as the influence of endogenous elements (e.g., behavioral traits) in group categorization. If CE is high, members of dominated groups can pass as members of dominant groups by adopting the behavioral norm associated with that group. CE facilitates group equality by decreasing the ability to discriminate between members of dominant and dominated groups, but it weakens intra-group neighborhood effects. It is argued that, under sufficiently low levels of discrimination, CE widens the range of values of the neighborhood effects parameter for which group inequality is stable.
    Keywords: Human capital; neighborhood effects; categorization endogeneity
    JEL: O15 Z13 C62
    Date: 2011–09–08
  11. By: Sakamoto, Norihito
    Abstract: We consider the problem of a fair collective choice function (fair CCF) which maps each profile of extended preference orderings into the set of fair social states (the set consists of alternatives which are both Pareto efficient and envy-free) when such a set exists. Our main objective is to examine compatibility of fair social choices with collective rationality. We formulate desirable properties of collective rationality, and look for CCFs satisfying them. Next, we show that there is no CCF that satisfies most of the choice-consistency properties and a simple concept of fairness simultaneously. Moreover, we reveal that there exists no collective choice function that selects efficient and envy-free states cannot be rationalized by a social preference relation.
    Date: 2011–08
  12. By: Yvonne McCarthy
    Abstract: Using a new nationally representative survey of financial capability and experience in the UK and Ireland, I investigate the key factors that cause individuals to experience financial distress. In this context, a key area that I focus on is whether individuals? behavioural traits, such as their capacities for self-control, planning, and patience, affect their ability to stay out of financial trouble. I find that the variables that proxy for these behavioural characteristics are both statistically significant and economically important for predicting both mild and extreme forms of financial distress, in a regression controlling for demographic and socio-economic factors. Furthermore, behavioural traits emerge as having a stronger impact on the incidence of financial distress than education or financial literacy. The results raise questions about whether policy can be oriented towards improving financial habits and mitigating the impact of behavioural characteristics on personal finances.
    Keywords: Personal Finance, Financial Strain, Debt, Behaviour, Financial Literacy
    JEL: C25 D14
    Date: 2011–02

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