nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2012‒12‒22
fourteen papers chosen by
Matthew Baker
City University of New York

  1. Who are the Voluntary Leaders? Experimental Evidence from a Sequential Contribution Game. By Raphaële Préget; Phu Nguyen-Van; Marc Willinger
  2. Strategies of Cooperation and Punishment among Students and Clerical Workers By Bigoni, Maria; Camera, Gabriele; Casari, Marco
  3. You Owe Me By Malmendier, Ulrike M.; Schmidt, Klaus M.
  4. The perils of peer punishment. Evidence from a common pool resource framed field experiment. By Gioia de Melo; Matías Piaggio
  5. Why Do People (Not) Cough in Concerts? The Economics of Concert Etiquette By Andreas Wagener
  6. Nurse or Mechanic? The Role of Parental Socialization and Children’s Personality in the Formation of Sex-Typed Occupational Aspirations By Javier Polavieja; Lucinda Platt
  7. Are Groups Better Planners Than Individuals? An Experimental Analysis By Enrica Carbone; Gerardo Infante
  8. The evolution of the mixed conjectures in the rent-extraction game By Paulo Brito, Bipasa Datta and Huw Dixon
  9. Working for a Good Cause By Dur, Robert; Zoutenbier, Robin
  10. Thirty Years of Prospect Theory in Economics: A Review and Assessment By Nicholas C. Barberis
  11. GINI DP 38: Inequality and Happiness: A Survey By Ada Ferrer-i-carbonell; Ramos, X. (Xavier)
  12. GINI DP 48: Public Opinion on Income Inequality in 20 Democracies: The Enduring Impact of Social Class and Economic Inequality By Robert Andersen; Yaish, M. (Meir)
  13. GINI DP 45: The Power of Networks. Individual and Contextual Determinants of Mobilising Social Networks for Help By Natalia Letki; Mierina, I. (Inta)
  14. Estimating the Influence of Life Satisfaction and Positive Affect on Later Income Using Sibling Fixed-Effects By De Neve, Jan-Emmanuel; Oswald, Andrew J.

  1. By: Raphaële Préget; Phu Nguyen-Van; Marc Willinger
    Abstract: We show that the preference to act as a leader rather than as a follower is related to subjects’ behavioral type. We rely on the methodology proposed by Fischbacher et al. (2001) and Fischbacher and Gächter (2010) in order to identify subjects’ behavioral types. We then link the likelihood to act as a leader in a repeated public goods game to the elicited behavioral types. The leader in a group is defined as the subject who voluntarily decides in the first place about his contribution. The leader’s contribution is then reported publicly to the remaining group members who are requested to take their contribution decisions simultaneously. Our main findings are that leaders emerge in almost all rounds and that conditional cooperators are more likely to act as leaders compared to free riders. We also find that voluntary leaders, irrespective of their behavioral type, contribute more than the followers. However leadership does not prevent the decay that is commonly observed in linear public goods experiments.
    Keywords: Public Goods, Experimental Economics, Voluntary Contribution Mechanism, Leadership.
    JEL: H41 C92
    Date: 2012
  2. By: Bigoni, Maria (University of Bologna); Camera, Gabriele (University of Basel); Casari, Marco (University of Bologna)
    Abstract: We study the individual behavior of students and workers in an experiment where they repeatedly face the same cooperative task. The data show that clerical workers differ from college students in overall cooperation rates, strategy adoption and use of punishment opportunities. Students cooperate more than workers. 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 by adopting decentralized punishment, and also personal punishment when available.
    Keywords: non-standard subject pools, prisoner's dilemma, peer punishment, artefactual field experiment, stranger matching
    JEL: C90 C70 D80
    Date: 2012–11
  3. By: Malmendier, Ulrike M.; Schmidt, Klaus M.
    Abstract: In many cultures and industries gifts are given in order to influence the recipient, often at the expense of a third party. Examples include business gifts of firms and lobbyists. In a series of experiments, we show that, even without incentive or in-formational effects, small gifts strongly influence the recipient’s behavior in favor of the gift giver, in particular when a third party bears the cost. Subjects are well aware that the gift is given to influence their behavior but reciprocate nevertheless. Withholding the gift triggers a strong negative response. These findings are incon-sistent with the most prominent models of social preferences. We propose an ex-tension of existing theories to capture the observed behavior by endogenizing the “reference group” to whom social preferences are applied. We also show that dis-closure and size limits are not effective in reducing the effect of gifts, consistent with our model. Financial incentives ameliorate the effect of the gift but backfire when available but not provided.
    Keywords: corruption; externalities; gift exchange; lobbyism; reciprocity; social preferences
    JEL: C91 D62 D73 I11
    Date: 2012–11
  4. By: Gioia de Melo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Matías Piaggio (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: We provide a model and experimental evidence on the effects of non-monetary punishment (NMP) by peers among communities of Uruguayan fishers exploiting a common pool resource (CPR). We find a) experimental groups composed of fishers from different communities (out-groups) who are sometimes in conflict over fishing territories did not overxploit the resource more than gropus from a single community (in-groups) and, unlike in-groups, out-groups reduced their exploitation of the resource in response to the threat of punishment; b) cooperative individuals punished free riders while a substantial amount of punishment was targeted by free riders on cooperators, who [in turns] responded by increasing their exploitation of the resource; and c)wealthier individuals practiced greater overexploitation of the resource. Our results suggest that the relevance of in-group favoritism in promoting cooperation due to social preferences may be overrated, and that the effectiveness of peer punishment is greater when individuals are motivated by social preferencies and also that coordination is required to prevent anti-social targeting and to enhance the social signal conveyed by the punishment.
    Keywords: Non-monetary punishment, In-group bias, Frame field experiment, Social preferences, Common pool resource
    JEL: D03 O12 C93
    Date: 2012–11
  5. By: Andreas Wagener (School of Economics and Management, University of Hannover)
    Abstract: Concert etiquette demands that audiences of classical concerts avoid inept noises such as coughs. Yet, coughing in concerts occurs more frequently than elsewhere, implying a widespread and intentional breach of concert etiquette. Using the toolbox of (behavioral) economics, we study the social costs and benefits of concert etiquette and the motives and implications of individually disobeying such social norms. Both etiquette and its breach arise from the fact that music and its "proper" perception form parts of individual and group identities, convey prestige and status, allow for demarcation and inclusion, produce conformity, and affirm individual and social values.
    Keywords: Concert etiquette, social norms, music
    JEL: Z11 Z13 D02
    Date: 2012–12
  6. By: Javier Polavieja (IMDEA-Social Sciences Institute); Lucinda Platt (Department of Quantitative Social Science, Institute of Education, University of London)
    Abstract: This study investigates the role of parental socialization and children’s agency in the formation of sex-typed occupational preferences using data for British children aged between 11 and 15. We anchor agency in observable psychological attributes associated with children’s capacity to act in the face of constraints. We focus on two such attributes, motivation and self-esteem. Our findings identify two main sources of parental influence: 1) parental socio-economic resources, which affect children’s occupational ambition, and 2) parental sex-typical behaviors, from which children learn which occupations are appropriate for each sex. We find, additionally, that girls with high motivation and both girls and boys with high self-esteem are less likely to aspire to sex-typical occupations, net of inherited traits and parental characteristics. Motivation and self-esteem help girls to aim higher in the occupational ladder, which automatically reduces their levels of sex-typicality. In the case of boys, however, self-esteem reduces sex-typicality at all levels of the aspired occupational distribution. This suggests that boys with high self-esteem are better equipped to contradict the existing social norms regarding sex-typical behavior. The implications of our findings are discussed.
    Keywords: Gender Segregation, Occupational Aspirations, Children, Socialization, Personality Traits
    JEL: J13 J16 J24 Z13
    Date: 2012–12–04
  7. By: Enrica Carbone; Gerardo Infante
    Abstract: Over the last ten years the literature in experimental economics has seen a growing interest in groups and how they compare to individuals in different settings. This paper contributes to the literature on this topic by investigating the comparison between groups and individuals with respect to intertemporal consumption problems. Empirical evidence has shown how dynamic optimization problems, representing intertemporal consumption decisions, involve computational difficulties that agents are not always equipped to solve optimally. Several econometric estimations on household and aggregate data seem to show that people do not save enough. Similarly, in many experiments, results suggest that people are very different in how they solve this class of problems and in how they react to changes in the decision environment. We present an experiment comparing group and individual planning under risk and uncertainty. Our study is focussed on investigating how groups perform in intertemporal decision making tasks, in particular observing the significance of group planning compared to individuals when choosing under risk and uncertainty. Results suggest that groups perform better than individuals when planning under risk, while the opposite happens in the case of planning under uncertainty. Interestingly, when comparing the behaviour of our agents in the second lifecycle (denominated "sequence") groups seem to lose all their advantage on individuals (in terms of less deviation from optimum). We interpret this as a "stability effect" caused by the random matching rule adopted during the groups sessions.
    Keywords: Collective Decision Making, Intertemporal Consumer Choice,Life Cycle, Risk, Uncertainty, Laboratory Experiments.
    JEL: D12 D91 D81 C91 C92
    Date: 2012–12
  8. By: Paulo Brito, Bipasa Datta and Huw Dixon
    Abstract: This paper adopts an evolutionary perspective on the rent-extraction model with conjectural variations (CV) allowing for mixed-strategies. We analyze the dynamics of the model with n CVs under the replicator equation. We find that the end points of the evolutionary dynamics include the pure-strategy consistent CVs. However, there are also mixed-strategy equilibria that occur: these are on the boundaries between the basins of attraction of the pure-strategy sinks. Further, we develop a more general notion of consistency which applies to mixed-strategy equilibria. In a three conjecture example, by conducting a global dynamics analysis, we prove that in contrast to the pure-strategy equilibria, the mixed-strategy equilibria are not ESS: under the replicator dynamics, there are three or four mixed equilibria that may either be totally unstable (both eigenvalues positive), or saddle-stable (one stable eigenvalue). There also exist heteroclinic orbits that link equilibria together. Whilst only the pure-strategies can be fully consistent, we find a lower bound for the probability that mixed strategy conjectures will be ex post consistent.
    Keywords: Rent-extraction, evolutionary dynamics, consistent conjectures, global dynamics, mixed-strategy
    JEL: D03 L15 H0
    Date: 2012–12
  9. By: Dur, Robert (Erasmus University Rotterdam); Zoutenbier, Robin (Erasmus University Rotterdam)
    Abstract: A rich literature in public administration has shown that public sector employees have stronger altruistic motivations than private sector employees. Recent economic theories stress the importance of mission preferences, and predict that altruistic people sort into the public sector when they subscribe to its mission. This paper uses data from a representative survey among more than 30,000 employees from 50 countries to test this prediction. We find strong evidence for a mutually reinforcing role of altruism and mission alignment in sorting to the public sector, particularly among highly educated workers and among workers in less-developed countries.
    Keywords: public service motivation, altruism, mission preferences, sorting, World Values Survey
    JEL: H1 J45 M5
    Date: 2012–12
  10. By: Nicholas C. Barberis
    Abstract: Prospect theory, first described in a 1979 paper by Daniel Kahneman and Amos Tversky, is widely viewed as the best available description of how people evaluate risk in experimental settings. While the theory contains many remarkable insights, economists have found it challenging to apply these insights, and it is only recently that there has been real progress in doing so. In this paper, after first reviewing prospect theory and the difficulties inherent in applying it, I discuss some of this recent work. While it is too early to declare this research effort an unqualified success, the rapid progress of the last decade makes me optimistic that at least some of the insights of prospect theory will eventually find a permanent and significant place in mainstream economic analysis.
    JEL: D03 D81
    Date: 2012–12
  11. By: Ada Ferrer-i-carbonell (Campus U.A.B., Institut d'Anàlisi Econòmica, IAE(CSIC)); Ramos, X. (Xavier)
    Abstract: In recent years there has been an accumulation of empirical evidence suggesting that individuals dislike inequality (Alesina and Giuliano, 2011 and Dawes et al., 2007). The literature has built upon estimating the degree of this dislike as well as its causes. The use of self-reported measures of satisfaction or well-being as a proxy for utility has been one of the empirical strategies used to this end. In this survey we review the papers that estimate or examine the relationship between inequality and self-reported happiness, and find that inequality reduces happiness in Western societies. The evidence for non-Western societies is more mixed and less reliable. Notwithstanding that, trust in the institutions seems to play an important role in shaping the relationship between income inequality and subjective wellbeing. We conclude with suggestions for further research.
    Date: 2012–05
  12. By: Robert Andersen (Sociology, University of Toronto); Yaish, M. (Meir)
    Abstract: Utilizing International Social Survey Program (ISSP) data, we explore the relationship between economic inequality—both at the individual-level and the national-level—and attitudes toward income inequality in 20 capitalist societies. Our findings suggest that experience of economic inequality has an enduring effect on attitudes. Specifically, respondents’ own social class and their father’s social class are both significantly related to attitudes, with working class individuals tending to be more egalitarian in their views than others. Still, our findings also suggest that attitudes are unrelated to experience of social mobility per se. Tests for random effects of class origin and destination further demonstrate that class has a similar effect across societies. In terms of contextual influences, we demonstrate that as income inequality rises, people of all classes tend to have less egalitarian views. In contrast to suggestions of previous research, however, we find no evidence that economic development or equality of opportunity influence public opinion on what is considered fair income differences.
    Keywords: attitudes, social class, economic inequality, social mobility, contextual effects
    Date: 2012–07
  13. By: Natalia Letki (PGPE Project, Institute of Sociology, University of Warsaw); Mierina, I. (Inta)
    Abstract: In this paper we treat social networks as a resource of individuals, that is used in conjunction with other types of capital, and similarly to other types of capital, its use is context-specific. We propose a conditional mechanism for how context determines networks use: not only does context affect network mobilisation, but that it affects behaviour of different groups differently. We test this proposition on the example of social and economic polarisation influencing probability of turning to networks for help by different income groups. Our findings show that although the poor have the greatest need to turn to networks to compensate for the shortage of other forms of capital, when context becomes adverse, in comparison with other groups they are always disadvantaged in terms of networks mobilisation.
    Keywords: social capital, networks, inequality, income, post-communist, Central Eastern Europe
    Date: 2012–06
  14. By: De Neve, Jan-Emmanuel (University College London); Oswald, Andrew J. (University of Warwick)
    Abstract: The question of whether there is a connection between income and psychological well-being is a long-studied issue across the social, psychological, and behavioral sciences. Much research has found that richer people tend to be happier. However, relatively little attention has been paid to whether happier individuals perform better financially in the first place. This possibility of reverse causality is arguably understudied. Using data from a large US representative panel we show that adolescents and young adults who report higher life satisfaction or positive affect grow up to earn significantly higher levels of income later in life. We focus on earnings approximately one decade after the person's well-being is measured; we exploit the availability of sibling clusters to introduce family fixed-effects; we account for the human capacity to imagine later socio-economic outcomes and to anticipate the resulting feelings in current wellbeing. The study's results are robust to the inclusion of controls such as education, IQ, physical health, height, self-esteem, and later happiness. We consider how psychological well-being may influence income. Sobel-Goodman mediation tests reveal direct and indirect effects that carry the influence from happiness to income. Significant mediating pathways include a higher probability of obtaining a college degree, getting hired and promoted, having higher degrees of optimism and extraversion, and less neuroticism.
    Keywords: positive affect, life satisfaction, income
    JEL: I31 J31
    Date: 2012–11

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