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on Evolutionary Economics |
| By: | Michalis Drouvelis (Department of Economics, University of Birmingham); Daniele Nosenzo (School of Economics, University of Nottingham) |
| Abstract: | We study the interplay between leading-by-example and group identity in a public goods game experiment. A common identity between the leader and her followers is beneficial for cooperation: average contributions are more than 30% higher than in a treatment where no identity was induced. In two further treatments we study the effects of heterogeneous identities. We find no effect on cooperation when only part of the followers share the leader’s identity, or when followers share a common identity that differs from that of the leader. We conclude that group identity is an effective but fragile instrument to promote cooperation. |
| Keywords: | leading-by-example,leadership, public goods, voluntary contributions,cooperation,identity,experiment |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2012-05&r=evo |
| By: | Sheremeta, Roman; Zhang, Jingjing |
| Abstract: | We examine behavior in a three-player trust game in which the first player may invest in the second and the second may invest in the third. Any amount sent from one player to the next is tripled. The third player decides the final allocation among three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. Allowing insider communication between the second and the third players increases cooperation between these two. Interestingly, there is an external effect of insider communication: the first player who is outside communication sends 54% more and receives 289% more than in the baseline treatment. As a result, insider communication increases efficiency from 44% to 68%. |
| Keywords: | three-player trust games; experiments; reciprocity; communication |
| JEL: | C72 C91 |
| Date: | 2013–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43533&r=evo |
| By: | Wiederhold, Simon; Riener, Gerhard |
| Abstract: | This paper investigates the role of social identity in reactions to control. We propose a simple principal-agent model with control that incorporates the existence of social groups. Our laboratory experiment shows that, in contrast to no-group agents, agents in social groups (i) perform better; (ii) expect less control; (iii) do not reciprocate when facing less control than expected; (iv) decrease their performance substantially when actual control exceeds their expectation. Hidden costs of control thus appear to be more substantial in social groups. -- |
| JEL: | C92 M54 D03 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:65407&r=evo |
| By: | McCarter, Matthew; Sheremeta, Roman |
| Abstract: | A common finding in social sciences is that member change hinders group functioning and performance. However, questions remain as to why member change negatively affects group performance and what are some ways to alleviate the negative effects of member change on performance? To answer these questions we conduct an experiment in which we investigate the effect of newcomers on a group’s ability to coordinate efficiently. Participants play a coordination game in a four-person group for the first part of the experiment, and then two members of the group are replaced with new participants, and the newly formed group plays the game for the second part of the experiment. Our results show that the arrival of newcomers decreases trust among group members and this decrease in trust negatively affects group performance. Knowing the performance history of the arriving newcomers mitigates the negative effect of their arrival, but only when newcomers also know the oldtimers performance history. Surprisingly, in groups that performed poorly prior to the newcomers’ arrival, the distrust generated by newcomers is mainly between oldtimers about each other rather than about the newcomers. |
| Keywords: | coordination; group performance; oldtimers; newcomers; trust; experiments |
| JEL: | C72 C91 |
| Date: | 2013–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43532&r=evo |
| By: | Maria A. Cunha-e-Sá; Luis C. Nunes; Vladimir Otrachshenko |
| Abstract: | We contribute to the stated preference literature by addressing scale usage heterogeneity regarding how individuals answer attitudinal questions capturing lack of trust in institutions and fairness issues. Using a latent class model, we conduct a contingent valuation study to elicit the willingness-to-pay to preserve a recreational site. We find evidence that respondents within the same class, that is, with similar preferences and attitudes, interpret the Likert scale differently when answering the attitudinal questions. We identify different patterns of scale usage heterogeneity within and across classes and associate them with individual characteristics. Our approach contributes to better a understanding of individual behavior in the presence of protest attitudes. JEL codes: C35, Q51 |
| Keywords: | Scale usage heterogeneity, Likert scale, protest attitudes, contingent valuation, latent class model |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp569&r=evo |
| By: | M. Bigoni; M. Fort |
| Abstract: | This paper presents an experiment on learning in repeated games, which complements the analysis of players' actual choices with data on the information acquisition process they follow. Subjects play a repeated Cournot oligopoly, with limited a priori information. The econometrics hinges on a model built upon Experience Weighted Attraction learning, and the simultaneous analysis of data on the information gathered and on actions taken by the subjects. Results suggest that learning is a composite process, in which different components coexist. Adaptive learning emerges as the leading element, but when subjects look at the strategies individually adopted by their competitors they tend to imitate the most successful behavior, which makes markets more competitive. Reinforcement learning also plays a role, as subjects favor strategies that have yielded higher profits in the past. |
| JEL: | L13 C92 C72 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp860&r=evo |
| By: | Fahr, René; Djawadi, Behnud Mir |
| Abstract: | We investigate one possible explanation for corrupt behavior namely that individual decision makers who engage frequently in illegal actions might underestimate the overall probability of being caught. This might be in particular true for petty corruption where small amounts of bribes are involved and detection rate is rather low. To abstract from confounding effects of reciprocal behavior we design an experiment where a public official decides upon accepting a bribe that leads to a higher present period income while facing the risk of being audited and left with a considerable lower income in all subsequent periods. Because risk attitudes might be different when putting earned versus endowed income at risk we compare treatments where participants either receive an endowment beforehand or earn their income by conducting a real effort task in every period. Independent of the treatments we already find high rates of corruption in very early periods. Risk attitudes measured with a subsequent lottery-choice experiment do not correlate with the behavior observed in the corruption experiment. We explain our findings by a systematic underestimation of the overall probability to be audited. Although detection probability is small in each period, the probability of being caught only once is substantially high when engaging in corrupt behavior on a regular basis. Our findings have important political implications because the underestimation of the total risk involved in engaging in corrupt behaviour might nullify measures to fight petty corruption by increased governmental auditing. -- |
| JEL: | D73 C91 D81 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62022&r=evo |
| By: | Bilkic, Natasa; Gries, Thomas |
| Abstract: | Initiating a conflict is an investment in social, political or economic change. The decision to attack is sequential in time, irreversible and, more important, includes highly uncertain and erratic threats and opportunities yet completely disregarded in confict theory. In this dynamic model of decision making we focus on the time dimension of an escalating conflict. In order to cover the effects of high uncertainties we extend methods in real option theory by introducing a discontinuous Ito-L vy Jump Diffusion processes. We analytically derive a threshold that triggers the attack and determine the expected time of action. With this new discontinuous processs we are able to show that an increasing number and intensity of oppressive government actions may lead to an earlier outbreak of conflict. However, even if latent conflicts are not immediately solved policies can prolong the peace period to find a long term solution to the conflict. -- |
| JEL: | D74 D81 C61 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62031&r=evo |
| By: | Boris Gershman |
| Abstract: | The two sides of envy, destructive and constructive, give rise to qualitatively dierent equi-libria, depending on the economic, institutional, and cultural environment. If investment opportunities are scarce, inequality is high, property rights are poorly protected, and social comparisons are strong, society is likely to be in the fear equilibrium," in which better endowed agents restrain their eorts to prevent destructive envy of the relatively poor. Otherwise, the standard \keeping up with the Joneses" competition arises, and envy is satised through suboptimally high eorts. Economic growth expands the production possibilities frontier and triggers an endogenous transition from one equilibrium to the other causing a qualitative shift in the relationship between envy and economic performance: envy-avoidance behavior with its adverse eect on investment paves the way to creative emulation. From a welfare perspective, better institutions and wealth redistribution that move the society away from the low-output fear equilibrium need not be Pareto improving in the short run, as they unleash the negative consumption externality, but in the long run such policies are likely to increase social welfare due to enhanced productivity growth. |
| Keywords: | Economic growth, Envy, Inequality, Property rights, Redistribution |
| JEL: | D31 D62 D74 O10 O43 Z13 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2012-19&r=evo |