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on Evolutionary Economics |
| By: | Nordblom, Katarina (Department of Economics); Zamac, Jovan (Department of Economics) |
| Abstract: | This paper offers an explanation to why the general observation that elderly hold stronger moral attitudes than young ones may be an age rather than a cohort effect. We apply mechanisms from social psychology to explain how personal norms may evolve over the life cycle. We assume that people update their norms influenced by their own past behavior (e.g., cognitive dissonance) and/or by the attitudes of their peers (normative conformity). We apply the theory on actual norm distributions for young and old concerning tax evasion. Allowing for heterogeneous updating of norms where only those who identify with their network are actually conforming with it, while the others are only influenced by their own past behavior, we can explain the difference between young and old people’s moral values as an age effect through endogenous norm formation. |
| Keywords: | Social norms; Endogenous norms; Tax evasion; Cognitive dissonance; Self-signaling; Normative conformity |
| JEL: | H26 |
| Date: | 2011–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2011_013&r=evo |
| By: | Anna Conte (Max Planck Institute of Economics, Jena, and University of Westminster, EQM Department, London); M. Vittoria Levati (Max Planck Institute of Economics, Jena, and University of Verona, Department of Economics) |
| Abstract: | In a series of one-shot linear public goods game, we ask subjects to report their contributions, their contribution plans for the next period, and their first-order beliefs about their present and future partner. We estimate subjects' preferences from plans data by a finite mixture approach and compare the results with those obtained from contribution data. Our results indicate that preferences are heterogeneous, and that most subjects exhibit conditionally cooperative inclinations. Controlling for beliefs, which incorporate the information about the other's decisions, we are able to show that plans convey accurate information about subjects' preferences and, consequently, are good predictors of their future behavior. |
| Keywords: | Public goods games, Experiments, Social preferences, Mixture models |
| JEL: | C35 C51 C72 H41 |
| Date: | 2011–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-039&r=evo |
| By: | Finan, Frederico S. (University of California, Berkeley); Schechter, Laura (University of Wisconsin-Madison) |
| 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. |
| Keywords: | vote-buying, reciprocity, redistributive politics, voting, social preferences |
| JEL: | H0 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5965&r=evo |
| By: | Bellemare, Charles (Université Laval); Sebald, Alexander (University of Copenhagen) |
| Abstract: | We show how to bound the effect of belief-dependent preferences on choices in sequential two-player games without information about the (higher-order) beliefs of players. The approach can be applied to a class of belief-dependent preferences which includes reciprocity (Dufwenberg and Kirchsteiger, 2004) and guilt aversion (Battigalli and Dufwenberg, 2007) as special cases. We show how the size of the bounds can be substantially reduced by exploiting a specific invariance property common to preferences in this class. We illustrate our approach by analyzing data from a large scale experiment conducted with a sample of participants randomly drawn from the Dutch population. We find that behavior of players in the experiment is consistent with significant guilt aversion: some groups of the population are willing to pay at least 0.16e to avoid 'letting down' another player by 1e. We also find that our approach produces narrow and thus very informative bounds on the effect of reciprocity in the games we consider. Our bounds suggest the model of reciprocity we consider is not a significant determinant of decisions in our experiment. |
| Keywords: | belief-dependent preferences, guilt aversion, reciprocity, partial identification |
| JEL: | C93 D63 D84 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5957&r=evo |
| By: | Julian Romero |
| Abstract: | One of the fundamental problems in both economics and organization is to understand how individuals coordinate. The widely used minimum-effort coordination game has been used as a simplied model to better understand this problem. This paper rst presents some theoretical results that give conditions under which the minimum-effort coordination game exhibits hysteresis. Using these theoretical results, some experimental hypotheses are developed and then conrmed using human subjects in the laboratory. The main insight is that play in a given game is heavily dependent on the history of parameters leading up to that game. For example, the experiments show when cost c = 0:5 in the minimum-effort coordination game, there is signicantly more high effort if the cost has increased to c = 0:5 compared to when the cost has decreased to c = 0:5. One implication of this is that a temporary change in parameters may be able move the economic system from a bad equilibrium to a good equilibrium. |
| Keywords: | Hysteresis, Minimum-effort Coordination Game, Logit Equilibrium, Experimental Economics, Equilibrium Selection |
| JEL: | C72 C92 M53 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1265&r=evo |
| By: | Clark, Andrew E. (Paris School of Economics) |
| Abstract: | The role of money in producing sustained subjective well-being seems to be seriously compromised by social comparisons and habituation. But does that necessarily mean that we would be better off doing something else instead? This paper suggests that the phenomena of comparison and habituation are actually found in a considerable variety of economic and social activities, rendering conclusions regarding well-being policy less straightforward. |
| Keywords: | comparison, habituation, income, unemployment, marriage, divorce, health, religion, policy |
| JEL: | D01 D31 H00 I31 J12 J28 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5966&r=evo |
| By: | Kaldasch, Joachim |
| Abstract: | An evolutionary model of the product life cycle is applied to derive the experience curve and the market size of (expensive) durable goods. The experience (learning) curve suggests that the real costs per unit decrease with an increasing cumulative output (Henderson's law). Based on the idea that in a competitive market firms are forced to pass cost advantages on to the price, the evolutionary model suggests that the mean price and also the mean costs are governed by an exponential decline with time. Simultaneously the mean price evolution satisfies Henderson's law. The market size is defined here by the number of active firms. The market size is shown to follow the total market revenue if the latter exhibits fast variations, else the size is nearly constant. A comparison with an empirical investigation confirms the model predictions. |
| Keywords: | experience curve; learning curve; market evolution; evolutionary economics; economic growth; product diffusion; Gompertz diffusion; product life cycle; durable goods |
| JEL: | D11 D41 D91 A10 E27 C50 B52 D83 O4 E3 |
| Date: | 2011–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33370&r=evo |
| By: | Deborah Cobb-Clark (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA)); Stefanie Schurer (School of Economics and Finance, Victoria University of Wellington) |
| Abstract: | We use a large, nationally-representative sample of working-age adults to demonstrate that personality (as measured by the Big Five) is stable over a four-year period. Average personality changes are small and do not vary substantially across age groups. Intra-individual personality change is generally unrelated to experiencing adverse life events and is unlikely to be economically meaningful. Like other non-cognitive traits, personality can be modeled as a stable input into many economic decisions. |
| Keywords: | Non-cognitive skills, Big-Five personality traits, stability |
| JEL: | J24 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2011n21&r=evo |
| By: | Erich Gundlach; Matthias Opfinger |
| Abstract: | We find a U-shaped relation between happiness and religiosity in cross-country panel data after controlling for income levels. At a given level of income, the same level of happiness can be reached with high and low levels of religiosity, but not with intermediate levels. A rise in income causes an increase in happiness along with a decline of religiosity. Our interpretation of the empirical results is that the indifference curves for religiosity and other commodities of the utility function are hump-shaped. |
| Keywords: | Happiness, religiosity, utility function, long-run development |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:163&r=evo |
| By: | Steffen Andersen (Copenhagen Business School); Glenn W. Harrison (Robinson College of Business, Georgia State University); Morten Lau (Durham Business School); Elisabet E. Rutstroem (Robinson College of Business, Georgia State University) |
| Abstract: | Convenient assumptions about qualitative properties of the intertemporal utility function have generated counter-intuitive implications for the relationship between atemporal risk aversion and the intertemporal elasticity of substitution. If the intertemporal utility function is additively separable then the latter two concepts are the inverse of each other. We review a simple theoretical specification with a long lineage in the literature on multi-attribute utility, and demonstrate the critical role of a concept known as intertemporal risk aversion or intertemporal correlation aversion. This concept is the intertemporal analogue of a more general concept applied to two attributes of utility, but where the attributes just happen to be the time-dating of the good. In the context of intertemporal utility functions, the concept provides an intuitive explanation of possible differences between (the inverse of) atemporal risk aversion and the intertemporal elasticity of substitution. We use this theoretical structure to guide the design of a series of experiments that allow us to identify and estimate intertemporal correlation aversion. Our results show that subjects are correlation averse over lotteries with intertemporal income profiles, and that the convenient additive specification of the intertemporal utility function is not an appropriate representation of preferences over time. |
| Date: | 2011–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:dur:durham:2011_03&r=evo |
| By: | Elvio Accinelli (Facultad de Economía, Universidad Autónoma de san Luis Potosí. Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Leobardo Plata-Pérez (Facultad de Economía, Universidad Autónoma de san Luis Potosí.); Joss Sánchez-Pérez (Facultad de Economía, Universidad Autónoma de san Luis Potosí.) |
| Abstract: | The Pareto optimal concept does not concern with fairness or equality, it is a concept related to efficiency. In this paper, using techniques from the general equilibrium theory, we relate efficiency, fairness and stability of an economy. |
| Keywords: | Fairness, efficiency, economics welfare |
| JEL: | D4 D6 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1111&r=evo |
| By: | Holger Strulik; Klaus Prettner (Harvard Center for Population and Development Studies); Alexia Prskawetz (Vienna Institute of Demography) |
| Abstract: | Conventional R&D-based growth theory suggests that productivity growth is positively correlated with population size or population growth, an implication which is hard to see in the data. Here we integrate R&D-based growth into a unified growth setup with micro-founded fertility and schooling behavior. We then show how a Beckerian child quality-quantity trade-off explains why higher growth of productivity and income per capita are associated with lower population growth. The medium-run prospects for future economic growth - when fertility is going to be below replacement level in virtually all developed countries - are thus much better than predicted by conventional R&D-based growth theory. |
| Keywords: | R&D, unified growth theory, declining population, fertility, schooling, human capital, post-modern society. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:7411&r=evo |
| By: | Anirban Chakraborti (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris); Ioane Muni Toke (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris); Marco Patriarca (IFISC - Instituto de Fisica Interdisciplinaire y Sistemas Complejos - Instituto de Fisica Interdisciplinaire y Sistemas Complejos); Frédéric Abergel (MAS - Mathématiques Appliquées aux Systèmes - EA 4037 - Ecole Centrale Paris) |
| Abstract: | This article is the second part of a review of recent empirical and theoretical developments usually grouped under the heading Econophysics. In the first part, we reviewed the statistical properties of financial time series, the statistics exhibited in order books and discussed some studies of correlations of asset prices and returns. This second part deals with models in Econophysics from the point of view of agent-based modeling. Of the large number of multiagent- based models, we have identified three representative areas. First, using previous work originally presented in the fields of behavioral finance and market microstructure theory, econophysicists have developed agent-based models of order-driven markets that we discuss extensively here. Second, kinetic theory models designed to explain certain empirical facts concerning wealth distribution are reviewed. Third, we briefly summarize game theory models by reviewing the now classic minority game and related problems. |
| Date: | 2011–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00621059&r=evo |