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on Evolutionary Economics |
| By: | Markus Mobius; Muriel Niederle; Paul Niehaus; Tanya S. Rosenblat |
| Abstract: | Evidence from social psychology suggests that agents process information about their own ability in a biased manner. This evidence has motivated exciting research in behavioral economics, but also garnered critics who point out that it is potentially consistent with standard Bayesian updating. We implement a direct experimental test. We study a large sample of 656 undergraduate students, tracking the evolution of their beliefs about their own relative performance on an IQ test as they receive noisy feedback from a known data-generating process. Our design lets us repeatedly measure the complete relevant belief distribution incentive-compatibly. We find that subjects (1) place approximately full weight on their priors, but (2) are asymmetric, over-weighting positive feedback relative to negative, and (3) conservative, updating too little in response to both positive and negative signals. These biases are substantially less pronounced in a placebo experiment where ego is not at stake. We also find that (4) a substantial portion of subjects are averse to receiving information about their ability, and that (5) less confident subjects are more likely to be averse. We unify these phenomena by showing that they all arise naturally in a simple model of optimally biased Bayesian information processing. |
| Keywords: | Human behavior ; Bayesian statistical decision theory |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:11-14&r=evo |
| By: | Herrmann-Pillath, Carsten |
| Abstract: | In recent extensions of the Darwinian paradigm into economics, the replicator-interactor duality looms large. I propose a strictly naturalistic approach to this duality in the context of the theory of institutions, which means that its use is seen as being always and necessarily dependent on identifying a physical realization. I introduce a general framework for the analysis of institutions, which synthesizes Searle's and Aoki's theories, especially with regard to the role of public representations (signs) in the coordination of actions, and the function of cognitive processes that underly rule-following as a behavioral disposition. This allows to conceive institutions as causal circuits that connect the population-level dynamics of interactions with cognitive phenomena on the individual level. Those cognitive phenomena ultimately root in neuronal structures. So, I draw on a critical restatement of the concept of the meme by Aunger to propose a new conceptualization of the replicator in the context of institutions, namely, the replicator is a causal conjunction between signs and neuronal structures which undergirds the dispositions that generate rule-following actions. Signs, in turn, are outcomes of population-level interactions. I apply this framework on the case of money, analyzing the emotions that go along with the use of money, and presenting a stylized account of the emergence of money in terms of the naturalized Searle-Aoki model. In this view, money is a neuronally anchored metaphor for emotions relating with social exchange and reciprocity. Money as a meme is physically realized in a replicator which is a causal conjunction of money artefacts and money emotions. -- |
| Keywords: | Generalized Darwinism,institutions,replicator/interactor,Searle,Aoki,naturalism,memes,emotions,money |
| JEL: | B52 D02 D87 E40 Z1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fsfmwp:182&r=evo |
| By: | Francesco Lancia; Alessia Russo |
| Abstract: | This paper focuses on a two-period OLG economy with public imperfect observability over the intergenerational cooperative dimension. Individual endowment is at free disposal and perfectly observable. In this environment we study how a new mechanism, we call Self-Commitment-Institution (SCI), outperforms personal and community enforcement in achieving higher ex-ante e¢ ciency. Social norms with and without SCI are characterized. If social norms with SCI are implemented, agents might freely dispose of their endowment. As long as they reduce their marginal gain from deviation in terms of current utility, they also credibly self-commit on intergenerational cooperation. Under quite general conditions we .nd that, even if individual strategies are still characterized by behavioral uncertainty, the introduction of SCI relaxes the inclination toward opportunistic behavior and sustains higher e¢ ciency compared to social norms without SCI. We quantify the value of SCI and investigate the role of memory with di¤erent social norms. Finally, applications on intergenerational public good games and transfer games with productive SCI are provided |
| Keywords: | Cooperation; Free disposal; Imperfect public monitoring; Memory; Overlapping generation game; Self-Commitment Institution; |
| JEL: | C70 D70 H40 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0668&r=evo |
| By: | Reinoud Joosten; Berend Roorda |
| Abstract: | We present attractiveness, a reÂ…nement criterion for evolutionary equilibria. Equilibria surviving this criterion are robust to small perturbations of the underlying payoff system or the dynamics at hand. Furthermore, certain attractive equilibria are equivalent to others for certain evolutionary dynamics. For instance, each attractive evolutionarily stable strategy is an attractive evolutionarily stable equilibrium for certain barycentric ray-projection dynamics, and vice versa. |
| Keywords: | attractive evolutionary equilibria, evolutionary dynam- ics, evolutionary, dynamic & structural stability |
| JEL: | C62 C72 C73 |
| Date: | 2011–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2011-17&r=evo |