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on Evolutionary Economics |
| By: | Bigoni, Maria (University of Bologna); Casari, Marco (University of Bologna); Skrzypacz, Andrzej (Stanford University); Spagnolo, Giancarlo (SITE, Stockholm School of Economics and University of Rome "Tor Vergata") |
| Abstract: | When subjects interact in continuous time, their ability to cooperate may dramatically increase. In an experiment, we study the impact of different time horizons on cooperation in (quasi) continuous time prisoner's dilemmas. We find that cooperation levels are similar or higher when the horizon is deterministic rather than stochastic. Moreover, a deterministic duration generates different aggregate patterns and individual strategies than a stochastic one. For instance, under a deterministic horizon subjects show high initial cooperation and a strong end-of-period reversal to defection. Moreover, they do not learn to apply backward induction but to postpone defection closer to the end. |
| JEL: | C72 C73 C91 C92 D74 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:2088r&r=evo |
| By: | Peter Duersch; Joerg Oechssler; Burkhard Schipper (Department of Economics, University of California Davis) |
| Abstract: | We characterize the class of symmetric two-player games in which tit-for-tat cannot be beaten even by very sophisticated opponents in a repeated game. It turns out to be the class of exact potential games. More generally, there is a class of simple imitation rules that includes tit-for-tat but also imitate-the-best and imitate-if-better. Every decision rule in this class is essentially unbeatable in exact potential games. Our results apply to many interesting games including all symmetric 2x2 games, and standard examples of Cournot duopoly, price competition, public goods games, common pool resource games, and minimum effort coordination games. |
| Keywords: | Imitation, tit-for-tat, decision rules, learning, exact potential games, symmetric games, repeated games, relative payoffs, zero-sum games |
| JEL: | C72 C73 D43 |
| Date: | 2013–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:13-1&r=evo |
| By: | Stefano DellaVigna; John List; Ulrike Malmendier; Gautam Rao |
| Abstract: | Do men and women have different social preferences? Previous findings are contradictory. We provide a potential explanation using evidence from a field experiment. In a door-to-door solicitation, men and women are equally generous, but women become less generous when it becomes easy to avoid the solicitor. Our structural estimates of the social preference parameters suggest an explanation: women are more likely to be on the margin of giving, partly because of a less dispersed distribution of altruism. We find similar results for the willingness to complete an unpaid survey: women are more likely to be on the margin of participation. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00380&r=evo |
| By: | Jonathan Gheyssens (ETH Zürich); Isabel Günther (ETH Zürich) |
| Abstract: | On the basis of a conditional contribution experiment conducted in Benin and Uganda, we argue that a conditional u-shaped profile exists, at least in poor communities. Under this profile, individuals invest considerably in public goods when nobody else does, reduce their commitment in reaction to positive group participation and turn into conditional cooperators after a threshold of others’ participation is reached. For the understanding of the dynamics of repeated cooperation the implications of this group of u-shaped cooperators might be important. |
| Keywords: | Conditional cooperation; Public goods; Experiments; sub-Saharan Africa |
| Date: | 2013–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:135&r=evo |
| By: | Cristina Bodea; Adrienne LeBas |
| Abstract: | How do social contracts come into being? This paper argues that norm adoption plays an important and neglected role in this process. Using novel data from urban Nigeria, we examine why individuals adopt norms favoring a citizen obligation to pay tax where state enforcement is weak. We find that public goods delivery by the state produces the willingness to pay tax, but community characteristics also have a strong and independent effect on both social contract norms and actual tax payment. Individuals are less likely to adopt pro-tax norms if they have access to community provision of security and other services. In conflict-prone communities, where “self-help” provision of club goods is less effective, individuals are more likely to adopt social contract norms. Finally, we show that social contract norms substantially boost tax payment. This paper has broad implications for literatures on state formation, taxation, clientelism, and public goods provision. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2013-02&r=evo |
| By: | Moschion, Julie (Melbourne Institute of Applied Economic and Social Research); Tabasso, Domenico (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | This paper studies the respective influence of intergenerational transmission and the environment in shaping individual trust. Focusing on second generation immigrants in Australia and the United States, we exploit the variation in the home and in the host country to separate the effect of the cultural background from that of the social and economic conditions on individual trust. Our results indicate that trust in the home country contributes to the trust of second generation immigrants in both host countries, but particularly so in the United States. Social and economic conditions in the host country, such as crime rate, economic inequality, race inequality and segregation by country of origin, also affect trust. Evidence for first generation immigrants confirms that the transmission of trust across generations is primarily important in the United States, and, that differences in trust levels between the two host countries increase with acculturation. |
| Keywords: | trust, migration, culture |
| JEL: | J15 O15 Z10 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7203&r=evo |
| By: | Michael A. Valenti; Olivier G. Giovannoni |
| Abstract: | This paper presents a review of the literature on the economics of shared societies. As defined by the Club de Madrid, shared societies are societies in which people hold an equal capacity to participate in and benefit from economic, political, and social opportunities regardless of race, ethnicity, religion, language, gender, or other attributes, and where, as a consequence, relationships between the groups are peaceful. Our review centers on four themes around which economic research addresses concepts outlined by the Club de Madrid: the effects of trust and social cohesion on growth and output, the effect of institutions on development, the costs of fractionalization, and research on the policies of social inclusion around the world. |
| Keywords: | Shared Societies; Economic Inclusion; Institutions; Economic Growth; Income Distribution |
| JEL: | D31 O11 O43 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_755&r=evo |
| By: | Barnett, Andy (Auburn University); Yandle, Bruce (Clemson University); Naufal, George S (American University of Sharjah) |
| Abstract: | Despite being a fixture of everyday life in the Arab world, wasta, which may be thought of as special influence by members of the same group or tribe, has received little attention from social scientists. Our casual empiricism suggests that wasta is an important determinant of how economic activities are organized and resources are allocated in Middle Eastern societies, yet economists, even those who specialize in work related to the Middle East, have not addressed the issue of wasta. With this paper we provide a modest beginning to filling that void. Specifically, we use the history of wasta, Hayek's concept of extended order and Coase's work on the nature of the firm to draw inferences regarding the existence of wasta and its persistence in Arab societies. |
| Keywords: | cronyism, wasta, firm, Hayek, Coase, Middle East, social capital |
| JEL: | D21 K20 N45 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7201&r=evo |
| By: | Paolo Crosetto (Max Planck Institute for Economics, Jena); Antonio Filippin (University of Milan, Department of Economics, and Institute for the Study of Labor (IZA)) |
| Abstract: | We perform a comparative analysis of five incentivized tasks used to elicit risk preferences. Theoretically, we compare the elicitation methods in terms of completeness of the range of the estimates as well as their precision, the likelihood of triggering loss aversion, and problems arising when multiple choices are required. Using original data from a homogeneous population, we experimentally investigate the distribution of estimated risk preferences, whether they differ by gender, and the complexity of the tasks. We do so using both non-parametric tests and a structural model estimated with maximum likelihood. We find that the estimated risk aversion parameters vary greatly across tasks and that gender differences appear only when the task is more likely to trigger loss aversion. |
| Keywords: | Risk attitudes, Elicitation methods, Experiment |
| JEL: | C81 C91 D81 |
| Date: | 2013–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-009&r=evo |
| By: | Justin Wolfers; Daniel W. Sacks; Betsey Stevenson |
| 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: | Subjective well-being, life satisfaction, quality of life, Easterlin Paradox, adaptation, economic growth |
| JEL: | D6 I3 J1 O1 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2013-03&r=evo |
| By: | Timothy Besley and Marta Reynal-Querol |
| Abstract: | This paper exploits variation between and within countries to examine the legacy of recorded conflicts in Africa in the pre-colonial period between 1400 and 1700. There are three main findings. First, we show that historical conflict is correlated with a greater prevalence of post-colonial con.ict. Second, historical conflict is correlated with lower levels of trust, a stronger sense of ethnic identity and a weaker sense of national identity across countries. Third, historical conflict is negatively correlated with subsequent patterns of development within countries. |
| Keywords: | Conflict, Trust, Identity |
| JEL: | N47 O43 O55 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:312&r=evo |
| By: | Steven Levitt; John List; Susanne Neckermann; Sally Sadoff |
| Abstract: | Research on behavioral economics has established the importance of factors such as reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence educational performance. Several insights emerge. First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to under-investment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00379&r=evo |