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on Evolutionary Economics |
| By: | Benito Arruñada; Marco Casari; Francesca Pancotto |
| Abstract: | Through an experiment, we investigate how the level of rationality relates to concerns for equality and efficiency. Subjects perform dictator games and a guessing game. More rational subjects are not more frequently of the self-regarding type. When performing a comparison within the same degree of rationality, self-regarding subjects show more strategic sophistication than other subjects. |
| Keywords: | steps of reasoning, other-regarding preferences |
| JEL: | C91 C92 D63 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:611&r=evo |
| By: | Deakin, S. |
| Abstract: | This paper explores the scope for synthesis between economic and systemic approaches to the understanding of legal evolution. The evolutionary and epistemic branches of game theory predict that stable norms will emerge when agents share common beliefs concerning future states of the world. Systems theory see the legal order as a social system which reproduces itself by recursive acts of legal communication, thereby giving rise to self-reference and operational closure. At the same time, the legal system is cognitively open, that is to say, indirectly influenced by other social systems in its environment. This gives rise to the possibility of coevolution of law and the economy. It will be argued that systems theory, by developing the idea of law as an adaptive system with cognitive properties, provides a missing link in the evolutionary theory of norms. Recent game theoretical models imply that common knowledge is not entirely endogenous to agents' interactions, but depends to a certain extent on emergent normative structures. These include the public representations of common knowledge which are provided by the legal system. The paper will explore the implications of this idea, argue for an integrated economic and systemic analysis of legal evolution, and consider some of the theoretical and methodological implications of such a step. |
| Keywords: | Legal evolution, game theory, correlated equilibrium, social norms, systems theory, contract theory, legal origins |
| JEL: | C72 C73 K12 K22 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp424&r=evo |
| By: | Rahul Deb; Robert S. Gazzale; Matthew J. Kotchen |
| Abstract: | A large economics literature seeks to understand the reasons why individuals make charitable contributions. Fundamental features of most models of charitable giving are the inclusion of externalities induced by other agents and the Lancasterian characteristics approach to specifying utility functions. This paper develops a general, revealed-preference methodology for testing a variety of preference structures that allow for both externalities and characteristics. The tests are simple linear programs that are transparent, computationally efficient, and straightforward to implement. We show how the technique applies to standard models of privately provided public goods and novel models that account for social comparisons based on relative consumption and donations among individuals. We also conduct an original experiment that enables nonparametric tests of many models on a single data set. The results provide the first revealed-preference evidence on the importance of social comparisons when individuals make charitable contributions. Models that include preferences for either relative consumption or donations yield greater explanatory power than the standard model of impure altruism. |
| JEL: | C91 D01 D64 H41 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18029&r=evo |
| By: | Banuri, Sheheryar; Eckel, Catherine |
| Abstract: | Two decades of empirical evaluation have shown that corruption has a negative impact on economic growth, political stability, judicial effectiveness, democratization, educational attainment, and equality of income. However, corruption exists, persists, and varies significantly by culture. Lab studies have recently come to the forefront in identifying both the incentives and disincentives for corrupt behavior. However, lab studies on culture and corruption have led to some puzzling, contradictory results. This paper begins with a discussion of non-experimental work in this area, and evaluates the experimental findings in the context of earlier research. The authors sketch out the channels through which culture interacts with corruption (through institutions and social norms), and argue that discrepancies in experimental results may be due to differences in design (including repetition or unobserved variation in beliefs) or to differences in the response to punishment across societies. In addition to exploring design-based reasons for previous contradictory findings, avenues for future research include: behavioral responses to different types of externalities; replicating results in different countries; and utilizing the lab to formulate effective anti-corruption measures. |
| Keywords: | Public Sector Corruption&Anticorruption Measures,Corruption&Anticorruption Law,Cultural Policy,Crime and Society,Social Accountability |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6064&r=evo |
| By: | Jose Apesteguia; Miguel Angel Ballester |
| Abstract: | We propose a rule of decision-making, the sequential procedure guided by routes, and show that three influential boundedly rational choice models can be equivalently understood as special cases of this rule. In addition, the sequential procedure guided by routes is instrumental in showing that the three models are intimately related. We show that choice with a status-quo bias is a refinement of rationalizability by game trees, which, in turn, is also a refinement of sequential rationalizability. Thus, we provide a sharp taxonomy of these choice models, and show that they all can be understood as choice by sequential procedures. |
| Keywords: | individual rationality, bounded rationality, behavioral economics |
| JEL: | D01 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:615&r=evo |
| By: | Fatima Lambarraa (Georg-August-University Göttingen); Gerhard Riener (University of Jena) |
| Abstract: | Charitable giving is one of the major obligations Islam and a strong Muslim norm endorses giving to the needy, but discourages public displays of giving. This norm is puzzling in light of previous evidence, suggesting that making donations public often increases giving. We use an experiment to assess the effects this moral prescription on actual giving levels in an anonymous and in a public setting. We conducted two field experiments with 534 and 186 subjects at Moroccan educational institutions. Subjects who participated in a paid study were given the option to donate from their payment to a local orphanage, under treatments that varied the publicity of the donation and the salience of Islamic values. In the salient Islamic treatment, anonymity of donations significantly increased donation incidence as well as average donations for religious subjects. This stands in stark contrast to most previous findings in the charitable giving literature. |
| Keywords: | Charitable giving; Islam; Social pressure; Priming; Religion; Norms; Field experiment |
| JEL: | H40 C93 D01 Z12 |
| Date: | 2012–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:111&r=evo |
| By: | Witte, Björn-Christopher |
| Abstract: | This article explores the influence of competitive conditions on the evolutionary fitness of risk preferences, using the professional competition between fund managers as a practical example. To explore how different settings of competition parameters, the exclusion rate and the exclusion interval, affect individual investment behavior, an evolutionary model is developed. Using a simple genetic algorithm, two attributes of virtual fund managers evolve: the amount of capital they invest in risky assets and the amount of excessive risk they accept, where a positive value of the latter parameter indicates an inefficient investment portfolio. The simulation experiments illustrate that the influence of competitive conditions on investment behavior and attitudes towards risk is significant. What is alarming is that intense competitive pressure generates risk-seeking behavior and diminishes the predominance of the most skilled. Under these conditions, evolution does not necessarily select managers with efficient portfolios. These results underline the institutional need to create a competitive framework that will not allow risk-taking to constitute an evolutionary advantage per se. -- |
| Keywords: | Risk preferences,competition,genetic programming,fund managers,portfolio theory |
| JEL: | C73 D81 G11 G24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201220&r=evo |
| By: | Berardi, Michele |
| Abstract: | In a model of incomplete, heterogeneous information, with externalities and strategic interactions, we analyze the possibility for learning to act as coordination device. We build on the framework proposed by Angeletos and Pavan (2007) and extend it to a dynamic multiperiod setting where agents need to learn to coordinate. We analyze conditions under which adaptive and eductive learning obtain, and show that adaptive learning conditions are less demanding than the eductive ones: in particular, when actions are strategic substitutes, the equilibrium is always adaptively learnable, while it might not be eductively so. In case of heterogeneous preferences, moreover, convergence only depends on the average characteristic of agents in the economy. We also show that adaptive learning dynamics converge to the game theoretical strategic equilibrium, which means that agents can learn to act strategically in a simple and straightforward way. |
| Keywords: | Learning; heterogeneity; interaction; coordination |
| JEL: | D83 C73 C62 |
| Date: | 2012–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38651&r=evo |