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on Evolutionary Economics |
| By: | Dirk Engelmann; Alistair Munro; Marieta Valente (NIMA, Universidade do Minho) |
| Abstract: | Ethical goods are increasingly available in markets for conventional goods giving pro-ethically motivated consumers a convenient option to contribute to public goods. In a previous experiment we explored the behavioural relevance of impure public goods in a within-subject setting and observed reduced aggregate pro-social behavior in the presence of impure goods that favor private consumption at the expense of public good provision. In this experiment, we implement a between-subject design to test the behavioural relevance of impure public goods with only a token contribution to a public good cause. From a theoretical perspective, assuming people demand private and public characteristics regardless of how they are provided, we would expect no behavioural relevance of the presence of impure public goods. However, this experiment establishes that pro-social behaviour defined as contributing to a public good, is negatively affected by impure goods with token contributions, in comparison to when they are absent. Furthermore, if the token impure good is mandatory instead of optional the negative effect on pro-social behaviour seems to be offset. The results from this experiment suggest impure public goods are not behaviourally irrelevant, can decrease pro-social behaviour but their optional or mandatory nature can have different behavioural consequences. |
| Keywords: | Experimental Economics, impure public goods, ethical goods, pro-social behaviour, social norms, experimental dictator games |
| JEL: | C91 D64 H41 Q59 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:45/2011&r=evo |
| By: | Nejat Anbarci; Nick Feltovich |
| Abstract: | We use a human–subjects experiment to investigate how bargaining outcomes are affected by changes in bargainers’disagreement payoffs. Subjects bargain against changing opponents, with an asymmetric disagreement outcome that varies over plays of the game. Both bargaining parties are informed of both disagreement payoffs (and the cake size) prior to bargaining. We find that bargaining outcomes do vary with the disagreement outcome, but subjects severely under–react to changes in their own disagreement payoff and to changes in the opponent’s disagreement payoff, relative to the risk–neutral prediction. This effect is observed in a standard Nash demand game and a related unstructured bargaining game, and for two different cake sizes varying by a factor of four. We show theoretically that standard models of expected utility maximisation are unable to account for this under–responsiveness – even when risk aversion is introduced. We also show that other–regarding preferences can explain our main results. |
| Keywords: | Nash demand game, unstructured bargaining, disagreement, experiment, risk aversion, social preference, other–regarding behaviour, bargaining power. |
| JEL: | C78 C72 D81 D74 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-36&r=evo |
| By: | Ashenfelter, Orley (Princeton University) |
| Abstract: | In this essay I review Sylvia Nasar's long awaited new history of economics, Grand Pursuit. I describe how the book is an economic history of the period from 1850-1950, with distinguished economists' stories inserted in appropriate places. Nasar's goal is to show how economists work, but also to show that they are people too – with more than enough warts and foibles to show they are human! I contrast the general view of the role of economics in Grand Pursuit with Robert Heilbroner's remarkably different conception in The Worldly Philosophers. I also discuss more generally the question of why economists might be interested in their history at all. |
| Keywords: | economic history, economic growth, economic policy |
| JEL: | B10 B30 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6213&r=evo |
| By: | Giacomo De Luca (University of Leuven); Marijke Verpoorten (University of Leuven) |
| Abstract: | We show that armed conflict affects social capital as measured by trust and associational membership. Using the case of Uganda and two rounds of nationally representative individual-level data bracketing a large number of battle events, we find that self-reported generalized trust and associational membership decreased during the conflict in districts in which battle events took place. Exploiting the different timing of two distinct waves of violence, we provide suggestive evidence for a rapid recovery of social capital. Evidence from a variety of identification strategies, including difference-indifference and instrumental variable estimates, suggests that these relationships are causal. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:111&r=evo |
| By: | Riedl, Arno (Maastricht University); Rohde, Ingrid M.T. (Istanbul Bilgi University); Strobel, Martin (Maastricht University) |
| Abstract: | Existing experimental research on behavior in weakest-link games shows overwhelmingly the inability of people to coordinate on the efficient equilibrium, especially in larger groups. We hypothesize that people are able to coordinate on efficient outcomes, provided they have sufficient freedom to choose their interaction neighborhood. We conduct experiments with medium sized and large groups and show that neighborhood choice indeed leads to coordination on the fully efficient equilibrium, irrespective if group size. This leads to substantial welfare effects. Achieved welfare is between 40 and 60 percent higher in games with neighborhood choice than without neighborhood choice. We identify exclusion as the simple but very effective mechanism underlying this result. In early rounds, high performers exclude low performers who in consequence 'learn' to become high performers. |
| Keywords: | efficient coordination, weakest-link, minimum effort, neighborhood choice, experiment |
| JEL: | C72 C92 D02 D03 D85 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6223&r=evo |
| By: | Dietrich, Franz |
| Abstract: | This paper studies a class of judgment aggregation rules, to be called `scoring rules' after their famous counterpart in preference aggregation theory. A scoring rule delivers the collective judgments which reach the highest total `score' across the individuals, subject to the judgments having to be rational. Depending on how we define `scores', we obtain several (old and new) solutions to the judgment aggregation problem,such as distance-based aggregation, premise- and conclusion-based aggregation, truth-tracking rules, and a Borda-type rule. Scoring rules are shown to generalize the classical scoring rules of preference aggregation theory. |
| Keywords: | judgment aggregation; social choice; scoring rules; Hamming rule; Borda rule; premise- and conclusion-based rules |
| JEL: | D70 D71 |
| Date: | 2011–12–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35657&r=evo |
| By: | Kato, Takao (Colgate University); Shu, Pian (MIT) |
| Abstract: | Using data on team assignment and weekly output for all weavers in an urban Chinese textile firm between April 2003 and March 2004, this paper studies a) how randomly assigned teammates affect an individual worker's behavior under a tournament-style incentive scheme, and b) how such effects interact with exogenously formed social networks in the manufacturing workplace. First, we find that a worker's performance improves when the average ability of her teammates increases. Second, we exploit the exogenous variations in workers' origins in the presence of the well-documented social divide between urban resident workers and rural migrant workers in large urban Chinese firms, and show that the coworker effects are only present if the teammates are of a different origin. In other words, workers do not act on pecuniary incentives to outperform teammates who are from the same social network. Our results point to the important role of group identities in overcoming self-interests and facilitating altruistic behavior. |
| Keywords: | coworker effects in the workplace, social networks, intergroup competition |
| JEL: | M5 J24 L2 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6219&r=evo |
| By: | Cabrales, Antonio; Nagel, Rosemarie; Rodríguez Mora, José V. |
| Abstract: | We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing |
| Keywords: | Redistribution; Political equilibrium; Voting; Multiple equilibria; Experiments; |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/12890&r=evo |
| By: | Cabrales, Antonio; Serrano, Roberto |
| Abstract: | We study the classic implementation problem under the behavioral assumption that agents myopically adjust their actions in the direction of better-responses or bestresponses. First, we show that a necessary condition for recurrent implementation in better-response dynamics (BRD) is a small variation of Maskin monotonicity, which we call quasimonotonicity. We also provide a mechanism for implementation in BRD if the rule is quasimonotonic and excludes worst alternatives – no worst alternative (NWA). Quasimonotonicity and NWA are both necessary and sufficient for absorbing implementation in BRD. Moreover, they characterize implementation in strict Nash equilibria. Under incomplete information, incentive compatibility is necessary for any kind of stable implementation in our sense, while Bayesian quasimonotonicity is necessary for recurrent implementation in interim BRD. Both conditions are also essentially sufficient for recurrent implementation, together with a Bayesian NWA. A characterization of implementation in strict Bayesian equilibria is also provided. Partial implementation results are also obtained. |
| Keywords: | Robust implementation; Bounded rationality; Evolutionary dynamics; Mechanisms; |
| JEL: | C72 D70 D78 |
| Date: | 2011–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/12895&r=evo |
| By: | Johanna D'Hernoncourt |
| Abstract: | This paper reports a negative relationship between the size of the shadow economy and generalized trust, in a sample of countries, both developed and developing. That relationship is robust to controlling for a large set of economic, policy, and institutional variables, to changing the estimate of the shadow economy and the estimation period, and to controlling for endogeneity. It is independent from trust in institutions and from income inequality, and is mainly present in the sample of developing countries. Those findings suggest that the tax compliance effect of trust dominates its role as a substitute for the formal legal system. |
| Keywords: | Shadow economy, informal sector, trust; Shadow economy, Informal sector, Trust |
| JEL: | O11 O17 O57 H26 Z13 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/98287&r=evo |