nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2011‒10‒09
twelve papers chosen by
Matthew Baker
City University of New York

  1. Punish and Perish? By Angelo Antoci; Luca Zarri
  2. Testing the Framework of Other-Regarding Preferences By M. Vittoria Levati; Aaron Nicholas; Birendra Rai
  3. A Welfare-Tradeoff-Ratio-Model of Social Preferences By Bjoern Hartig
  4. Bend It Like Beckham: Ethnic Identity and Integration By Alberto Bisin; Eleonora Patacchini; Thierry Verdier; Yves Zenou
  5. The Causal Effect of Market Participation on Trust: An Experimental Investigation Using Randomized Control By Omar Al-Ubaydli; Daniel Houser; John V.C. Nye; Maria Pia Paganelli; Xiaofei (Sophia) Pan
  6. Fast Convergence in Population Games By Itai Arieli; H. Peyton Young
  7. Truth-telling and Trust in Sender-receiver Games with Intervention By Ismail Saglam; Mehmet Y. Gurdal; Ayca Ozdogan
  8. Quality and quantity: The role of social interactions in individual health By Damiano Fiorillo; Fabio Sabatini
  9. Social Approval, Competition and Cooperation By Xiaofei (Sophia) Pan; Daniel Houser
  10. Essays in Behavioral Microeconomic Theory. By Carvalho, M.
  11. Fast Convergence in Evolutionary Equilibrium Selection By Gabriel E. Kreindler; H. Peyton Young
  12. (Bad) Luck or (Lack of) Effort?: Comparing Social Sharing Norms between US and Europe. By Pedro Rey-Biel; Roman M. Sheremeta; Neslihan Uler

  1. By: Angelo Antoci (DEIR, University of Sassari); Luca Zarri (Economics Department, University of Verona)
    Abstract: The evolution of large-scale cooperation among genetic strangers is a fundamental unanswered question in the social sciences. Behavioral economics has persuasively shown that so called ‘strong reciprocity’ plays a key role in accounting for the endogenous enforcement of cooperation. Insofar as strongly reciprocal players are willing to costly sanction defectors, cooperation flourishes. However, experimental evidence unambiguously indicates that not only defection and strong reciprocity, but also unconditional cooperation is a quantitatively important behavioral attitude. By referring to a prisoner’s dilemma framework where punishment (‘stick’) and rewarding (‘carrot’) options are available, here we show analytically that the presence of cooperators who don’t punish in the population makes altruistic punishment evolutionarily weak. We show that cooperation breaks down and strong reciprocity is maladaptive if costly punishment means ‘punishing defectors’ and, even more so, if it is coupled with costly rewarding of cooperators. In contrast, punishers don’t perish if cooperators, far from being rewarded, are sanctioned. These results, based on an extended notion of strong reciprocity, challenge evolutionary explanations of cooperation that overlook the ‘dark side’ of altruistic behavior.
    Keywords: Cooperation, Strong Reciprocity, Altruistic Punishment, Altruistic Rewarding, Heterogeneous Types
    JEL: C7 D7 Z1
    Date: 2011–08
  2. By: M. Vittoria Levati (Max Planck Institute of Economics, Jena, and Department of Economics, University of Verona); Aaron Nicholas (Graduate School of Business, Deakin University); Birendra Rai (Department of Economics, Monash University)
    Abstract: We assess the empirical validity of the overall theoretical framework of other-regarding preferences by focusing on those preference axioms that are common to all the prominent theories of outcome-based other-regarding preferences. This common set of preference axioms leads to a testable implication: the strict preference ranking of self over a finite number of alternatives lying on any straight line in the space of material payoffs to self and other will be single-peaked. The extent of single-peakedness varies from a high of 79% to a low of 54% across our treatments that are based on dictator and trust games. Positively and/or negatively other-regarding subjects are significantly less likely to report single-peaked rankings relative to self-regarding subjects. We delineate the potential reasons for violations of single-peakedness and discuss the implications of our findings for theoretical modeling of other-regarding preferences.
    Keywords: Other-regarding preferences, social preferences, decision making under risk, single-peaked preferences, experiments
    JEL: C70 C91 D63 D81
    Date: 2011–09–30
  3. By: Bjoern Hartig (CGS, University of Cologne)
    Abstract: This paper introduces a model of social preferences featuring a single parameter representing an individual's disposition to share resources with others. The parameter reacts to observed behavior of others in a clearly defined manner. Therefore, the model allows the numerical analysis of reciprocal interaction. Based on evolutionary concepts, the model is characterized by a very basic utility maximization condition and it is consistent with and often predictive of the results of a multitude of different behavioral games and phenomenon.
    Keywords: other-regarding preferences, altruism, cooperation, evolution, reciprocity, welfare-tradeoff-ratio
    JEL: C71 C73 C90 C91 D63 D64
    Date: 2011–09–28
  4. By: Alberto Bisin (New York University, Department of Economics; and NBER); Eleonora Patacchini (Universita' di Roma "La Sapienza," CEPR, and IZA); Thierry Verdier (Paris School of Economics and CEPR); Yves Zenou (Stockholm University, Research Institute of Industrial Economics, CEPR, and CREAM)
    Abstract: We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes which have been proposed in the social sciences: cultural conformity and cultural distinction. Under cultural conformity, ethnic identity is reduced by neighborhood integration, which weakens group loyalties and prejudices. On the contrary, under cultural distinction, ethnic minorities are more motivated in retaining their own distinctive cultural heritage the more integrated are the neighborhoods where they reside and work. Data on ethnic preferences and attitudes provided by the Fourth National Survey of Ethnic Minorities in the UK enables us to test the relative significance of these two identity processes. We find evidence consistent with intense ethnic and religious identity mostly formed as a cultural distinction mechanism. Consistently, we document that ethnic identities are more intense in mixed than in segregated neighborhoods.
    Keywords: Ethnicity, identity, intermarriage, cultural transmission
    JEL: A14 J15
    Date: 2010–10
  5. By: Omar Al-Ubaydli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); John V.C. Nye (Department of Economics, George Mason University); Maria Pia Paganelli (Department of Economics, Trinity University); Xiaofei (Sophia) Pan (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: In randomized control laboratory experiments, we find that those primed to think about markets exhibit more trusting behavior. We randomly and unconsciously prime experimental participants to think about markets and trade. We then ask them to play a trust game involving an anonymous stranger. We compare the behavior of these individuals with that of a group who are not primed to think about anything in particular. Priming for market participation affects positively the beliefs about the trustworthiness of anonymous strangers, increasing trust.
    Keywords: trust, markets, institutions, belief, priming
    JEL: D02 D23 D64 D84 O12 O43 P10
    Date: 2011–09
  6. By: Itai Arieli; H. Peyton Young
    Abstract: A stochastic learning dynamic exchibits fast convergence in a population game if the expected waiting time until the process comes near a Nash equilibrium is bounded above for all sufficiently large populations. We propose a novel family of learning dynamics that exhibits fast convergence for a large class of population games that includes coordination games, potential games, and supermodular games as special cases. These games have the property that, from any initial state, there exists a continous better-reply path to a Nash equilibrium that is locally stable.
    Keywords: Populaton game, Better-reply dynamic, Stochastic approximation, Convergence time
    JEL: C72 C73
    Date: 2011
  7. By: Ismail Saglam (TOBB University of Economics and Technology, Department of Economics); Mehmet Y. Gurdal (TOBB University of Economics and Technology, Department of Economics); Ayca Ozdogan (TOBB University of Economics and Technology, Department of Economics)
    Abstract: Recent experimental studies find excessive truth-telling in strategic information transmission games with conflictive preferences. In this paper, we show that this phenomenon is more pronounced in sender-receiver games where a truthful regulator randomly intervenes. We also establish that intervention significantly increases the excessive trust of receivers.
    Keywords: Strategic information transmission, truth-telling, trust, sender-receiver game.
    JEL: C72 C90 D83
    Date: 2011–09
  8. By: Damiano Fiorillo; Fabio Sabatini (-)
    Abstract: The public health literature focusing on the detrimental effects of social isolation has shown that the quantity of social connections is positively correlated with individual health. Drawing on pooled cross-sectional data, we test this hypothesis on a representative sample of the Italian population. Our findings show that, besides the quantity of interactions, it is their quality – as measured by subjective satisfaction derived from relationships with friends – that works as the best predictor of health. We point out the existence of health disparities based on socio-economic status. Poorer and less educated individuals are exposed to a higher probability of reporting poor health conditions. The risk is even worse for unemployed and retired workers. This paper contributes to the literature in two substantive dimensions. This is the first empirical study of the relationship between social interactions and health in Italy. Second, we add to previous studies by carrying out the first assessment of the role of satisfaction in interpersonal relations.
    Keywords: health, well-being, satisfaction, social interactions, social capital, family, Italy.
    JEL: I12 I18 Z1
    Date: 2011–03–23
  9. By: Xiaofei (Sophia) Pan (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: HollŠnder (1990) argued that when non-monetary social approval from peers is sufficiently valuable, it works to promote cooperation. HollŠnder, however, did not define the characteristics of environments in which high valued approval is likely to occur. This paper provides evidence from a laboratory experiment indicating that people under competition value approval highly, but only when winners earn visible rewards through approval. The evidence implies that approvalÕs value is tied to signaling motives. Our findings point to new institutions that rely on reward, rather than punishment, to efficiently promote generosity in groups.
    Keywords: social approval, cooperation, signaling, competition
    JEL: D02 D64 H4
    Date: 2011–09
  10. By: Carvalho, M. (Universiteit van Tilburg)
    Date: 2011
  11. By: Gabriel E. Kreindler; H. Peyton Young
    Abstract: Stochastic learning models provide sharp predictions about equilibrium selection when the noise level of the learning process is taken to zero. The difficulty is that, when the noise is extremely small, it can take an extremely long time for a large population to reach the stochastically stable equilibrium. An important exception arises when players interact locally in small close-knit groups; in this case convergence can be rapid for small noise and an arbitrarily large population. We show that a similar result holds when the population is fully mixed and there is no local interaction. Selection is sharp and convergence is fast when the noise level is ‘fairly’ small but not extremely small.
    Keywords: Stochastic stability, Logit learning, Markov chain, Convergence time
    JEL: C72 C73
    Date: 2011
  12. By: Pedro Rey-Biel (Universitat Autònoma de Barcelona, Departmento de Economía e Historia Económica); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University, USA); Neslihan Uler (Research Center for Group Dynamics, Institute for Social Research, University of Michigan)
    Abstract: We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of income, we find that, although overall giving is similar in both countries when subjects know the actual role of luck and effort, Spanish subjects give more when they are uninformed compared to American subjects. Using elicited beliefs, we find that this is due to Spanish subjects associating poverty with bad luck and Americans believing that low performers did not work hard enough.
    Keywords: individual giving, cross-cultural, beliefs, laboratory experiment
    JEL: C72 C91 D63 D81 H50
    Date: 2011

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