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on Evolutionary Economics |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In this paper we investigate how cognitive ability influences behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive ability: more cognitively able subjects choose numbers closer to equilibrium, converge more frequently to equilibrium play and earn more even as behavior approaches the equilibrium prediction. To understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning based on level-k reasoning. We find a systematic positive relationship between cognitive ability and levels; furthermore, the average level of more cognitively able subjects responds positively to the cognitive ability of their opponents, while the average level of less cognitively able subjects does not respond at all. Our results suggest that, in strategic environments, higher cognitive ability translates into better analytic reasoning and a better ‘theory of mind’ |
| Keywords: | Cognitive ability; Bounded rationality; Learning; Convergence; Level-k; Nonequilibrium behavior; Beauty contest; Repeated games; Structural modeling; Theory of mind; Intelligence; Raven test |
| JEL: | D83 C73 C91 |
| Date: | 2012–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38317&r=evo |
| By: | Michal Bauer (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Julie Chytilová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Barbara Pertold-Gebicka (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | Other-regarding preferences are important for establishing and maintaining cooperative outcomes. In this paper, we study how formation of other-regarding preferences during childhood is affected by parental background. Our subjects, aged 4-12 years, are classified into other-regarding types based on simple binary choice dictator games. The main finding is that children of parents with low education are more spiteful, more selfish and less altruistic. This link is robust to controlling for a rich set of child characteristics and class fixed effects. The parental effects stand out against the overall development of preferences, as we find children to become less spiteful and more altruistic with increasing age. Our findings, complemented by an analysis of the World Values Survey data, suggest that low socio-economic status affects parental effort invested in instilling other-regarding preferences into children, making them less likely to acquire cooperative types of preferences. |
| Keywords: | other-regarding preferences, altruism, spite, children, family background, field experiment |
| JEL: | C93 D03 D64 I24 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2012_10&r=evo |
| By: | Thomas W.L. Norman |
| Abstract: | If players learn to play an infinitely repeated game using Bayesian learning, it is known that their strategies eventually approximate Nash equilibria of the repeated game under an absolute-continuity assumption on their prior beliefs. We suppose here that Bayesian learners do not start with such a “grain of truth”, but with arbitrarily low probability they revise beliefs that are performing badly. We show that this process converges in probability to a Nash equilibrium of the repeated game. |
| Keywords: | Repeated games, Nash equilibrium, Rational learning, Bayesian learning, Absolute continuity |
| JEL: | C73 D83 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:602&r=evo |
| By: | Elinder, Mikael (Research Institute of Industrial Economics (IFN)); Erixson, Oscar (Uppsala Center for Fiscal Studies) |
| Abstract: | Since the sinking of the Titanic, there has been a widespread belief that the social norm of ‘women and children first’ gives women a survival advantage over men in maritime disasters, and that captains and crew give priority to passengers. We analyze a database of 18 maritime disasters spanning three centuries, covering the fate of over 15,000 individuals of more than 30 nationalities. Our results provide a new picture of maritime disasters. Women have a distinct survival disadvantage compared to men. Captains and crew survive at a significantly higher rate than passengers. We also find that the captain has the power to enforce normative behavior, that the gender gap in survival rates has declined, that women have a larger disadvantage in British shipwrecks, and that there seems to be no association between duration of a disaster and the impact of social norms. Taken together, our findings show that behavior in life-and-death situation is best captured by the expression ‘Every man for himself’. |
| Keywords: | Social Norms; Disaster; Women and children first; Mortality; High stakes |
| JEL: | C70 D63 D81 J16 |
| Date: | 2012–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0913&r=evo |
| By: | Peter Duersch; Joerg Oechssler; Burkhard Schipper (Department of Economics, University of California Davis) |
| Abstract: | We show that for many classes of symmetric two-player games, the simple decision rule ``imitate-if-better'' can hardly be beaten by any strategy. We provide necessary and sufficient conditions for imitation to be unbeatable in the sense that there is no strategy that can exploit imitation as a money pump. In particular, imitation is subject to a money pump if and only if the relative payoff function of the game is of the rock-scissors-paper variety. We also show that a sufficient condition for imitation not being subject to a money pump is that the relative payoff game is a generalized ordinal potential game or a quasiconcave game. Our results apply to many interesting examples of symmetric games including 2 x 2 games, Cournot duopoly, price competition, public goods games, common pool resource games, and minimum effort coordination games. |
| Keywords: | Imitate-the-best, learning, symmetric games, relative payoffs, zero-sum games, rock-paper-scissors, finite population ESS, generalized ordinal potential games, quasiconcave games |
| JEL: | C72 C73 D43 |
| Date: | 2012–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:12-5&r=evo |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In a real effort experiment with repeated competition we find striking differences in how the work effort of men and women responds to previous wins and losses. For women losing per se is detrimental to productivity, but for men a loss impacts negatively on productivity only when the prize at stake is big enough. Responses to luck are more persistent and explain more of the variation in behavior for women, and account for about half of the gender performance gap in our experiment. Our findings shed new light on why women may be less inclined to pursue competition-intensive careers. |
| Keywords: | Real effort experiment; Gender differences; Gender gap; Competition aversion; Tournament; Luck; Win; Loss; Competitive outcomes |
| JEL: | J33 C91 J16 |
| Date: | 2012–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38220&r=evo |
| By: | Christian Schubert |
| Abstract: | Robert Sugden has recently elaborated upon the case for a normative standard of freedom as "opportunity" that is supposed to cope with the problem of how to realign normative economics - with its traditional rational choice orientation - with behavioral economics. His standard, though, presupposes that people respond to uncertainty about their own future preferences by dismissing any kind of self-commitment. We argue that the approach lacks psychological substance: Sugden's normative benchmark - the "responsible person" - is a purely artificial construct that can hardly serve as a convincing role model in a contractarian setting. An alternative concept is introduced, and some policy implications are briefly discussed. |
| Keywords: | Opportunity Criterion, Preference Change, Reconciliation Problem |
| JEL: | D51 D63 |
| Date: | 2012–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2012-08&r=evo |
| By: | Morone, Andrea; Morone, Piergiuseppe |
| Abstract: | In this paper we analyse the empirical performance of several preference functionals using individual and group data. Our investigation aims to address two fundamental questions that have, until now, not been addressed in literature. Specifically, we intend to assess if there exists a risky choice theory that statistically fits group decisions significantly better than alternative theories, and if there are significant differences between individual and group choices. Experimental findings reported in this paper provide answers to both questions showing that when risky choices are undertaken by small groups (dyads in our case), disappointment aversion outperforms several alternative preference functionals, including expected utility. Since expected utility typically emerged as the dominant model in individual risky choices, this finding suggests that differences between individual and group choices exist, showing that the preference aggregation process drives out EU. |
| Keywords: | group decision; expected utility; risk and uncertainty |
| JEL: | D70 D81 C92 C91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38198&r=evo |
| By: | Daniel Müller (QUT); Benno Torgler (QUT); Eric Uslaner (University of Maryland) |
| Abstract: | Algan and Cahuc in “Inherited Trust and Growth” (AER, 2010) argue that “inherited trust” is a key factor in explaining growth rates across countries. They derive a measure of inherited trust by linking respondents’ “home countries” in the United States General Social Survey (1972-2004) and the 2000 wave of the World Values Survey. Algan and Cahuc then estimate trust levels for people born before 1910 (inherited trust in 1935) and afterwards (inherited trust in 2000). They show a strong link between economic growth rates and inherited trust. We do not challenge this result, but we do argue that: (1) the 2000 World Values Survey has many anomalous results; (2) the estimates for inherited trust in 1935 are mostly based upon tiny samples for most ethnic heritage groups in the General Social Survey; and (3) Algan and Cahuc’s findings are based upon two-tailed rather than one-tailed tests. We reestimate their model using the more reliable waves of the World Values Survey and find much weaker relationships between inherited trust in 1935 and trust in the home country. We also suggest caution in the overall measure of inherited trust in 1935. |
| Keywords: | Inherited trust, generalized trust, US immigrants |
| JEL: | N31 N32 Z12 Z13 |
| Date: | 2012–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:281&r=evo |