nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2012‒06‒05
eleven papers chosen by
Matthew Baker
City University of New York

  1. Moral Hypocrisy, Power and Social Preferences By Aldo Rustichini; Marie-Claire Villeval
  2. Evolution towards asymptotic efficiency, preliminary version. By Stefano Demichelis
  3. When Do We Learn to Cooperate? The Role of Social Learning in Social Dilemmas By Best, James A
  4. Strategies of cooperation and punishment among students and clerical workers By M. Bigoni; G. Camera; M. Casari
  5. Contribution Norms in Heterogeneous Groups: A Climate Change Framing By Zoe Van der Hoven; Martine Visser; Kerri Brick
  6. Ethnolinguistic Diversity and the Provision of Public Goods: Experimental Evidence from South Africa By Justine Burns; Malcolm Keswell
  7. Relating Behavioral Elements of Household Food Negotiation to Childhood Overweight and Obesity By Ehmke, Mariah D.; Schroeter, Christiane; Morgan, Kari; Larson-Meyer, Enette; Ballenger, Nicole
  8. The Anatomy of Error in Decision-making of Rationally Behaving Agents from the Perspective of the Theory of Bounded Rationality: Extension for Contextual Games By Tomas Otahal; Radim Valencik
  9. Strategic Self-Ignorance By Thunström, Linda; Nordström, Jonas; Shogren, Jason F.; Ehmke, Mariah
  10. Rationalizing Choice with Multi-Self Models By Attila Ambrus; Kareen Rozen
  11. Closing the Eyes on a Gloomy Future: Psychological Causes and Economic Consequences By LAAJAJ, RACHID

  1. By: Aldo Rustichini (Department of Economics, University of Minnesota, 1925 4th Street South, 4-101 Hanson Hall, Minneapolis, MN 55455-0462, U.S.); Marie-Claire Villeval (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)
    Abstract: We show with a laboratory experiment that individuals adjust their moral principles to the situation and to their actions, just as much as they adjust their actions to their principles. We first elicit the individuals’ principles regarding the fairness and unfairness of allocations in three different scenarios (a Dictator game, an Ultimatum game, and a Trust game). One week later, the same individuals are invited to play those same games with monetary compensation. Finally in the same session we elicit again their principles regarding the fairness and unfairness of allocations in the same three scenarios. Our results show that individuals adjust abstract norms to fit the game, their role and the choices they made. First, norms that appear abstract and universal take into account the bargaining power of the two sides. The strong side bends the norm in its favor and the weak side agrees : Stated fairness is a compromise with power. Second, in most situations, individuals adjust the range of fair shares after playing the game for real money compared with their initial statement. Third, the discrepancy between hypothetical and real behavior is larger in games where real choices have no strategic consequence (Dictator game and second mover in Trust game) than in those where they do (Ultimatum game). Finally the adjustment of principles to actions is mainly the fact of individuals who behave more selfishly and who have a stronger bargaining power. The moral hypocrisy displayed (measured by the discrepancy between statements and actions chosen followed by an adjustment of principles to actions) appears produced by the attempt, not necessarily conscious, to strike a balance between self-image and immediate convenience.
    Keywords: Moral hypocrisy, fairness, social preferences, power, self-deception
    JEL: D03 D63 C91 C7
    Date: 2012
  2. By: Stefano Demichelis (Department of Economics and Business, University of Pavia)
    Abstract: We show that in long repeated games, or in infinitely repeated games with discount rate close to one, payoffs corresponding to evolutionary stable sets are asymptotically efficient, as intuition suggests. Actions played at the beginning of the game are used as messages that allow players to coordinate on Pareto optimal outcomes in the following stages. The result builds a bridge between the theory of repeated games and that of communication games.
    Date: 2012–05
  3. By: Best, James A
    Abstract: In this paper, I look at the interaction between social learning and cooperative behavior. I model this using a social dilemma game with publicly observed sequential actions and asymmetric information about pay offs. I find that some informed agents in this model act, individually and without collusion, to conceal the privately optimal action. Because the privately optimal action is socially costly the behavior of informed agents can lead to a Pareto improvement in a social dilemma. In my model I show that it is possible to get cooperative behavior if information is restricted to a small but non-zero proportion of the population. Moreover, such cooperative behavior occurs in a finite setting where it is public knowledge which agent will act last. The proportion of cooperative agents within the population can be made arbitrarily close to 1 by increasing the finite number of agents playing the game. Finally, I show that under a broad set of conditions that it is a Pareto improvement on a corner value, in the ex-ante welfare sense, for an interior proportion of the population to be informed.
    Keywords: Asymmetric information, cooperation, effciency, social learning, social dilemmas,
    Date: 2011
  4. By: M. Bigoni; G. Camera; M. Casari
    Abstract: We study individual behavior of students and workers in an experiment where they repeatedly faced with the same cooperative task. The data show that clerical workers differ from college students in overall cooperation rates, strategies adopted, and use of punishment opportunities. Students cooperate more than workers, and cooperation increases in both subject pools when a personal punishment option is available. Students are less likely than workers to adopt strategies of unconditional defection and more likely to select strategies of conditional cooperation. Finally, students are more likely than workers to sanction uncooperative behavior with decentralized punishment and also personal punishment when available.
    JEL: C90 C70 D80
    Date: 2012–05
  5. By: Zoe Van der Hoven; Martine Visser; Kerri Brick (SALDRU, School of Economics, University of Cape Town)
    Abstract: While results from public good games with homogeneous players reflect the contribution norm of equal contributions, it is unclear what contribution norm will arise in a heterogeneous setting. Climate change is a perfect example of a social dilemma involving heterogeneous agents. As such, using a public good game with a climate change framing, this study examines what contribution norm arises when players are asymmetric in terms of their impact on the public good (mitigation). The climate change framing exacerbates equity considerations and ultimately increases the difficulty of finding a generalizable concept of fairness (contribution norm) acceptable to both player-types. The efficacy of communication as a means to promoting public good provision is also considered. The default contribution norm, irrespective of player-type, was to free-ride. With the introduction of communication, two dominant contribution norms emerge: free-riding and perfect cooperation.
    Keywords: public good; contribution norm; communication; heterogeneity; climate change
    JEL: H41 Q54 Q58
    Date: 2012
  6. By: Justine Burns; Malcolm Keswell (SALDRU, School of Economics, University of Cape Town)
    Abstract: This paper utilises techniques in experimental economics to investigate the impact of racial identity on the provision of public goods. A large sample of Black and White undergraduate University students were recruited to participate in public goods games, where the racial composition of the groups was varied to include All White groups, All Black groups and mixed race groups (comprising Black and White students). The results show that contrary to predictions from social identity theory, racial homogeneity in a group does not uniformly predict higher contributions to the public pool. Rather, it would appear that observable racial identity may convey information about extensive heterogeneity as opposed to homogeneity, especially where race is highly correlated with diversity in other dimensions, such as ethnolinguistic diversity. In accordance with the established macroeconometric literature on the provision of public goods, the results presented in this study show that contributions to the public good are indeed increasing in the level of trust in a group, and declining in the extent of ethnolinguistic diversity and socio-economic need in the group. Moreover, while communication has a large and significant effect on contributions to the public pool, patterns of communication are a ected by the racial composition of the group, with Black students appearing to be more responsive to communications made by White colleagues as opposed to Black colleagues. Hence, communication is not effective at sustaining co-operation in racially homogenous Black groups, possibly because communication in these groups allows participants to verify the greater diversity on other dimensions amongst group members.
    Date: 2011
  7. By: Ehmke, Mariah D.; Schroeter, Christiane; Morgan, Kari; Larson-Meyer, Enette; Ballenger, Nicole
    Abstract: Researchers working in the fields of family studies and psychology show motherchild relationship dynamics affect the occurrence of childhood overweight and obesity. Many of the significant behaviors they identify relate to negotiation and generosity norms in the household. The primary objective of this study is to test the value of altruistic and collective models of household behavior using the dictator and ‘carrotstick’ laboratory experiments. We also test exploratory hypotheses relating mother’s generosity and child’s punitive behavior and mother-child weight and fitness outcomes using dictator and ‘carrot-stick’ games. The data were collected from 50 mother-child pairs in Laramie, Wyoming. The children were all eight to 10 years old. The mother’s completed a survey to measure family attitudes and beliefs around food and fitness. All of the mothers and children completed a fitness assessment and blood draw to measure their cholesterol, triglyceride, and hemoglobin levels in addition to the economic experiments. The data do not support altruistic models of familial utility maximization as suggested by Becker’s Rotten Kid Theorem. We do find children overwhelmingly influence mothers’ allocations to maximize child, not household, welfare or utility. Results also indicate there is a positive relationship between mother generosity for child junk food the child’s waist circumference. Children who demand punitive behavior in the ‘carrot-stick’ game were less fit and more likely to be overweight and obese. The results of this study offer insights into household allocation processes which effect both mother and child weight and health outcomes.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2012–03–13
  8. By: Tomas Otahal (Department of Economics, Faculty of Business and Economics, Mendel University in Brno); Radim Valencik (University of Finance and Administration)
    Abstract: How can errors in decision-making by rationally behaving individuals be explained? The concepts of bounded rationality proposed by H. Simon and of imperfect information in the complex reality by F. Hayek attack the over-restrictive assumption of perfectly informed individuals or organisms in neoclassical microeconomics. Since this assumption excludes erroneous decision-making, some results must be explained by questioning the rationality assumption. In this paper, we show that erroneous decision-making of individuals and organisms is not necessarily erroneous if we look at the contextual games which individuals and organisms play in the complex reality. This helps to explain errors in the decision-making of individuals or organisms, while maintaining the assumption of rational behavior. At the same time, we show that the errors observed in the contextual analysis of games in the decision-making of individuals or organisms can only be apparent.
    Keywords: Bounded rationality, complex systems, contextual games, erroneous behavior, rational decision-making
    JEL: D01 C73
    Date: 2012–06
  9. By: Thunström, Linda; Nordström, Jonas; Shogren, Jason F.; Ehmke, Mariah
    Abstract: This paper analyzes if people use ignorance as an excuse to pursue immediate gratification, at the expense of future wellbeing, a behavior we label ‘strategic self-ignorance’. In a theoretical model we show that present-biased individuals benefit from choosing ignorance of the potentially negative impact of present consumption, and that ignorance leads to over consumption of harmful goods. In an experiment we empirically test for strategic self-ignorance. The experiment entails prepared meals, for which subjects may be familiar with the taste (immediate utility) but are uninformed of the calorie content (potential harm to future health). Subjects are offered costless information on the calorie content of the meal alternatives. A majority of subjects (58 percent) choose to remain ignorant of the calorie content, and ignorance leads to a significantly higher intake of calories. Our results imply that people are strategically self-ignorant and that such behavior may help explain over consumption of harmful goods.
    Keywords: strategic ignorance, harmful consumption, experiment, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Health Economics and Policy,
    Date: 2012
  10. By: Attila Ambrus; Kareen Rozen
    Abstract: This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a method for characterizing the extent of irrationality in a choice behavior, and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions. Under an additional assumption (scale-invariance), we show that generically at most five "reasons" are needed for every "mistake."
    Keywords: Multi-self models, index of irrationality, IIA violations, rationalizability
    JEL: D11 D13 D71
    Date: 2012
    Abstract: This paper analyzes the impact of economic prospects on one’s time preference. Research in psychol- ogy has shown how individuals modify their preferences in order to reduce their cognitive dissonance, which is the uncomfortable tension felt when simultaneously holding conflicting thoughts. It occurs among the poor when simultaneously caring about their future welfare while having gloomy economic prospects. Hence closing their eyes on the future can reduce their psychological distress at the cost of worsening their future economic wellbeing. This paper offers a new theoretical approach that decom- poses time discounting and analyzes the endogenous determination of one’s time horizon. The model predicts that, below a certain wealth, the time horizon of an individual is decreasing in poverty, result- ing in a behavioral poverty trap. The prediction is tested using data from a randomized experiment in Mozambique, which confirms that the beneficiaries of an agro-input subsidy and a matched savings intervention increased their planning horizon as a result of their improved economic prospects.
    Keywords: Endogenous time preference, cognitive dissonance, time horizon, Community/Rural/Urban Development, Consumer/Household Economics, Institutional and Behavioral Economics, D91, O12, Q12,
    Date: 2012

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