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on Evolutionary Economics |
| By: | Fehrler, Sebastian (University of Zurich); Przepiorka, Wojtek (Nuffield College, Oxford) |
| Abstract: | It has been shown that psychological predispositions to benefit others can motivate human cooperation and the evolution of such social preferences can be explained with kin or multi-level selection models. It has also been shown that cooperation can evolve as a costly signal of an unobservable quality that makes a person more attractive with regard to other types of social interactions. Here we show that if a proportion of individuals with social preferences is maintained in the population through kin or multi-level selection, cooperative acts that are truly altruistic can be a costly signal of social preferences and make altruistic individuals more trustworthy interaction partners in social exchange. In a computerized laboratory experiment, we test whether altruistic behavior in the form of charitable giving is indeed correlated with trustworthiness and whether a charitable donation increases the observing agents' trust in the donor. Our results support these hypotheses and show that, apart from trust, responses to altruistic acts can have a rewarding or outcome-equalizing purpose. Our findings corroborate that the signaling benefits of altruistic acts that accrue in social exchange can ease the conditions for the evolution of social preferences. |
| Keywords: | altruism, evolution of cooperation, costly signaling, social preferences, trust, trustworthiness |
| JEL: | C72 C92 H41 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7148&r=evo |
| By: | Donna Harris; Benedikt Herrmann |
| Abstract: | Using a laboratory experiment with minimal groups, we examined the extent to which the threats of costly punishments affect in-group favouritism behaviour. We studied three types of punishment separately: in-group, out-group, and third-party punishments. In line with previous studies, the majority of the allocators favoured their own group by allocating more money to each of the in-group members at the expense of the out-group in the baseline without punishment. In the in-group punishment treatment, we observed a slight increase in in-group favouritism behaviour. On the contrary, when only the out-group could punish the allocators, there was a significant drop in in-group favouritism behaviour as well as an increase in the equal division option. Finally, when faced with an independent third-party punisher the allocators continued to favour their own group. The threat of third-party punishment appeared to have no effect on their decisions. Our paper contributes to the literature on in-group favouritism and the nature of social norms by showing that the decision whether to favour one’s own group is affected by the threats of in-group and out-group punishments and whether it leads to an increase or decrease in this behaviour depends on who has the punishment power. Parochial or in-group biased norm was enforced by the in-group members, whilst ‘egalitarian sharing norm’ (across groups) was enforced by the out-group members. We conclude firstly that people apply different ‘self-serving’ social norms depending on their own group identity. Secondly, unlike selfish or opportunistic behaviours, independent third-parties, who only observed this behaviour but were not directly affected by it, were not willing to punish this behaviour. |
| Keywords: | In-group favouritism, Group behaviour, Social identity, Social norm, In-group punishment, Out-group punishment, Third-party punishment, Favour game |
| JEL: | D70 D73 C92 |
| Date: | 2012–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:628&r=evo |
| By: | Doepke, Matthias (Northwestern University); Zilibotti, Fabrizio (University of Zurich) |
| Abstract: | We construct a theory of intergenerational preference transmission that rationalizes the choice between alternative parenting styles (related to Baumrind 1967). Parents maximize an objective function that combines Beckerian and paternalistic altruism towards children. They can affect their children's choices via two channels: either by influencing their preferences or by imposing direct restrictions on their choice sets. Different parenting styles (authoritarian, authoritative, and permissive) emerge as equilibrium outcomes, and are affected both by parental preferences and by the socioeconomic environment. We consider two applications: patience and risk aversion. We argue that parenting styles may be important for explaining why different groups or societies develop different attitudes towards human capital formation, entrepreneurship, and innovation. |
| Keywords: | intergenerational preference transmission, altruism, paternalism, entrepreneurship, innovation |
| JEL: | D10 J10 O10 O40 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7108&r=evo |
| By: | Javier Olivera (UCD Geary Institute, University College Dublin) |
| Abstract: | This paper analyses the determinants of trust in a pool of 33 European countries over the period 2002-2010. We find that income inequality is negatively related with trust when we analyse pooled data of individuals, which is a well established result if one focuses on crosscountry differences. But, this relation vanishes when we estimate a fixed effects model with the data collapsed by country and year. Omitted variables may account for the significant and negative relationship between economic inequality and trust at the cross-sectional level. In contrast, we find a sizeable, negative and significant effect of the share of persons from minority ethnic groups on trust. This result is found in different specifications for the trust index and distribution of trust. |
| Keywords: | Trust, Income Inequality, Europe, Social Attitudes |
| JEL: | D31 D63 Z13 |
| Date: | 2013–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201301&r=evo |
| By: | Penczynski, Stefan |
| Abstract: | This paper proposes a behavioral model of social learning that unies various forms of inferential reasoning in one hierarchy of types. Iterated best responses that are based on uninformative level-0 play lead to the following of the private information (level-1), to the following of the majority (level-2), to a differentiated view on predecessors (level-3), etc. I present evidence from three sources that these are the prevalent types of reasoning in social learning: a review of social learning studies, existing data from Celen and Kariv (2004) as well as new experimental data that includes written accounts of reasoning from incentivized intra-team communication. |
| Keywords: | Social learning , levels of reasoning |
| JEL: | C91 D82 D83 D84 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:mnh:wpaper:32667&r=evo |
| By: | Sebastian Ille |
| Abstract: | This paper develops a simple dynamic, non-symmetric game between two player populations that can be generalised to a large variety of conflicts. One population attempts to re-write a current (social) contract in its favour, whereas the other prefers to maintain the status quo. In the modelùs initial set up, the free-rider problem obstructs the occurrence of a conflict, leading to a low probability of a successful turn-over. The normative and conventional framework, in which players interact, plays however a vital role in the evolution of conflicts. By relating the individual pay-off perceptions for each strategy to the type and frequency of norm violations, the free-rider effect can be considerably weakened, thus enabling the model to predict the existence of two stable equilibria; one with a high rate of conflict, and another in which no conflict arises. This second equilibrium is caused by a triggering event. The model provides an explanation of how and why these events may occur and under which conditions they can be observed more frequently. In addition, it is also shown which factors influence the equilibriaùs basin of attraction, i.e. the likelihood of a transition and hence the probability of a conflict. |
| Keywords: | Social Conflict, Social Change, Evolutionary Game, Stability of Equilibria |
| Date: | 2013–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2013/01&r=evo |
| By: | Newton, Jonathan |
| Abstract: | This study considers pure coordination games on networks and the waiting time for an adaptive process of strategic change to achieve efficient coordination. Although it is in the interest of every player to coordinate on a single globally efficient norm, coalitional behavior at a local level can greatly slow, as well as hasten convergence to efficiency. For some networks, parameter values exist at which the effect of coalitional behavior changes abruptly from a conservative effect to a reforming effect. These effects are confirmed for a variety of stylized and empirical social networks found in the literature. For coordination games in which the Pareto efficient and risk dominant equilibria differ, polymorphic states can be the only stochastically stable states. |
| Keywords: | social networks; networks; conservatism; reform; social norm; coalition; learning; Stochastic stability; Evolution |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2123/8895&r=evo |
| By: | Stephen G. Dimmock; Roy Kouwenberg; Olivia S. Mitchell; Kim Peijnenburg |
| Abstract: | We measure ambiguity attitudes for a representative sample of US households using a custom-designed module in the American Life Panel. Ambiguity attitudes vary substantially across people: half are ambiguity averse, 12% are ambiguity neutral, and 37% are ambiguity seeking. Further, ambiguity attitudes depend on the likelihood of the ambiguous event: people tend to overweight low-likelihood ambiguous events and underweight high-likelihood events, a phenomenon called ambiguity-likelihood insensitivity. Consistent with theoretical predictions, higher ambiguity aversion is associated with less equity market participation, lower portfolio allocations to equities, and more retirement planning. High ambiguity-likelihood insensitivity is associated with a higher probability of being insured. |
| JEL: | C83 D14 D81 G11 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18743&r=evo |
| By: | Sacks, Daniel W. (Wharton School, University of Pennsylvania); Stevenson, Betsey (University of Michigan); Wolfers, Justin (University of Michigan) |
| Abstract: | In recent decades economists have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related. |
| Keywords: | adaptation, Easterlin Paradox, quality of life, life satisfaction, subjective well-being, economic growth |
| JEL: | D6 I3 J1 O1 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7105&r=evo |