nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2013‒04‒20
fifteen papers chosen by
Matthew Baker
City University of New York

  1. Cooperation, Trust, and Economic Development: An Experimental Study in China By Junyi Shen; Xiangdong Qin
  2. "Behavioral Approach to Repeated Games with Private Monitoring" By Hitoshi Matsushima; Tomomi Tanaka; Tomohisa Toyama
  3. Low second-to-fourth digit ratio predicts indiscriminate social suspicion, not improved trustworthiness detection By Bonnefon, Jean-François; De Neys, Wim; Hopfensitz, Astrid
  4. The Importance of the Cognitive Environment for Intertemporal Choice By Michael A. Kuhn; Peter Kuhn; Marie-Claire Villeval
  5. Seeds of Distrust: Conflict in Uganda By Dominic Rohner; Mathias Thoenig; Fabrizio Zilibotti
  6. Do Control Questions Influence Behavior in Experiments? By Catherine Roux; Christian Thöni
  7. Risk Aversion Relates to Cognitive Ability: Fact or Fiction? By Andersson, Ola; Tyran, Jean-Robert; Wengström, Erik; Holm, Håkan J.
  8. Bounded Rationality and Strategic Uncertainty in a Simple Dominance Solvable Game By Nobuyuki Hanaki; Nicolas Jacquemet; Stéphane Luchini; Adam Zylbersztejn
  9. I am sorry - Honest and fake apologies By Verena Utikal
  10. National Diversity Under Pressure: Group Composition and Expedition Success in Himalayan Mountaineering By Sherman, Eliot L.; Chatman, Jennifer A.
  11. Religious Diversity and Economic Development in Sub-Saharan Africa: So Far So Good By Kodila-Tedika, Oasis; Agbor , Julius
  12. Honest on Mondays: Honesty and the Temporal Distance between Decisions and Payoffs By Ruffle, Bradley; Tobol, Yossi
  13. Family Ties By Alberto Alesina; Paola Giuliano
  14. Evolution, Fertility and the Ageing Population By Jason Collins; Oliver Richards
  15. "Thou Shalt Not Covet ...": Prohibitions, Temptation and Moral Values By Cervellati, Matteo; Vanin, Paolo

  1. By: Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Xiangdong Qin (School of Economics, Shanghai Jiao Tong University, China)
    Abstract: Many previous empirical studies have suggested that cooperation and trust affect economic growth. However, the precise relationship between trust and cooperation (i.e., whether trust leads to cooperation or cooperation leads to trust) remains unclear and it is not known how the level of economic development affects the level of cooperation and trust. Using a combination of public goods experiment, gambling game experiment, and trust game experiment, we investigate the links among cooperation, trust, and economic development in four regions of China. Our results suggest that first, there is a U-shaped or V-shaped relationship between cooperation and economic development; second, on the one hand, cooperation leads to trust, and on the other hand, more cooperative behavior may be created by rewarding trusting behavior; and third, men are more cooperative and trusting than women. Furthermore, we find that the widely used 'GSS trust' question from the General Social Survey (GSS) does not predict either cooperation or trust, whereas the questions 'GSS fair' and 'GSS help' have weak predictive power for trusting behavior but not for cooperative behavior.
    Keywords: Cooperation, Trust, Economic development, Experiment, China
    JEL: C91 H41 I32
    Date: 2013–04
  2. By: Hitoshi Matsushima (Faculty of Economics, University of Tokyo); Tomomi Tanaka (Economic Development & Global Education, LLC); Tomohisa Toyama (Faculty of Engineering, Kogakuin University)
    Abstract: We examine repeated prisoners' dilemma with imperfect private monitoring and random termination where the termination probability is low. We run laboratory experiments and show subjects retaliate more severely when monitoring is more accurate. This experimental result contradicts the prediction of standard game theory. Instead of assuming full rationality and pure self-interest, we introduce naiveté and social preferences, i.e., reciprocal concerns, and develop a model that is consistent with, and uniquely predicts, the observed behavior in the experiments. Our behavioral model suggests there is a trade-off between naiveté and reciprocity. When people are concerned about reciprocity, they tend to make fewer random choices.
    Date: 2013–03
  3. By: Bonnefon, Jean-François (CLLE); De Neys, Wim (Sorbonne, Universite Paris Descartes); Hopfensitz, Astrid (TSE)
    Abstract: Testosterone administration appears to make individuals less trusting, and this effect was interpreted as an adaptive adjustment of social suspicion, that improved the accuracy of trusting decisions. Here we consider another possibility, namely that testosterone increases the subjective cost of being duped, decreasing the propensity to trust without improving the accuracy of trusting decisions. In line with this hypothesis, we show that second-to-fourth digit ratio (2D:4D, a proxy for organising effects of testosterone in the foetus) correlates with the propensity to trust but not with the accuracy of trusting decisions. Trust game players (N=144) trusted less when they had lower 2D:4D (high prenatal testosterone), but their ability to detect the strategy of other players was constant (and better than chance) across all levels of digit ratio. Our results suggest that early prenatal organizing effects of testoterone in the foetus might impair rather than boost economic outcomes, by promoting indiscriminate social suspicion.
    Keywords: Trust – Digit Ratio – Testosterone – Strategy Detection – Betrayal Aversion
    JEL: C91 D03 D64 D87
    Date: 2013–02
  4. By: Michael A. Kuhn (Department of Economics, University of California - University of California, San Diego); Peter Kuhn (Department of Economics, University of California - University of California, Santa Barbara); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: We experimentally manipulate two aspects of the cognitive environment -- cognitive depletion and recent sugar intake -- and estimate their effects on individuals' time preferences in a way that allows us to identify the structural parameters of a simple (α,β,δ) intertemporal utility function for each person. We find that individuals exposed to a prior cognitive load, individuals who consumed a sugared drink and individuals who consumed a sugar-free drink all defer more income than a control group exposed to none of these conditions. Structural estimates show that all three effects are driven entirely by increases in the intertemporal substitution elasticity parameter (α). Together, our results suggest that at least for complex economic decisions like intertemporal financial choice, the 'attention/focusing' effect of both prior cognitively demanding activity and prior assignment of a primary reward can improve decision-making.
    Keywords: Time preferences; self-control; depletion; sucrose; experiment
    Date: 2013–04–03
  5. By: Dominic Rohner; Mathias Thoenig; Fabrizio Zilibotti
    Abstract: We study the effect of civil conflict on social capital, focusing on the experience of Uganda during the last decade. Using individual and county-level data, we document large causal effects on trust and ethnic identity of an exogenous outburst of ethnic conflicts in 2002-05. We exploit two waves of survey data from Afrobarometer 2000 and 2008, including information on socioeconomic characteristics at the individual level, and geo-referenced measures of fighting events from ACLED. Our identification strategy exploits variations in the intensity of fighting both in the spatial and cross-ethnic dimensions. We find that more intense fighting decreases generalized trust and increases ethnic identity. The effects are quantitatively large and robust to a number of control variables, alternative measures of violence, and different statistical techniques involving ethnic and spatial fixed effects and instrumental variables. We also document that the post-war effects of ethnic violence depend on the ethnic fractionalization. Fighting has a negative e¤ect on the economic situation in highly fractionalized counties, but has no effect in less fractionalized counties. Our findings are consistent with the existence of a self-reinforcing process between conflicts and ethnic cleavages.
    Keywords: conflict, Uganda, seeds of distrust, ethnic conflicts, ACLED, cross-ethnic
    JEL: D74 Q34
    Date: 2012
  6. By: Catherine Roux; Christian Thöni
    Abstract: Outcomes and strategies shown in control questions prior to experimental play may provide subjects with anchors or induce experimenter demand effects. In a Cournot oligopoly experiment we explore whether control questions influence subjects' choices in initial periods and over the course of a repeated game. We vary the framing of the control question to explore the cause of potential influences. We find no evidence for an influence of the control question on choices, neither in the first period nor later in the game.
    Keywords: Control questions; Experimenter demand effects; Anchoring; Experimental design
    JEL: B41 C72 C91
    Date: 2013–03
  7. By: Andersson, Ola (Research Institute of Industrial Economics (IFN)); Tyran, Jean-Robert (Department of Economics, University of Vienna); Wengström, Erik (Department of Economics, Lund University); Holm, Håkan J. (Department of Economics, Lund University)
    Abstract: Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making, rather than to risk preferences.
    Keywords: Risk preference; cognitive ability; experiment; noise
    JEL: C81 C91 D12 D81
    Date: 2013–04–12
  8. By: Nobuyuki Hanaki (Aix-Marseille University); Nicolas Jacquemet (University of Lorraine and Paris School of Economics); Stéphane Luchini (Aix-Marseille University); Adam Zylbersztejn (University of Lorraine and Paris School of Economics)
    Abstract: How much of the failures to achieve Pareto efficient outcome observed in a simple 2 2 dominance solvable game can be attributed to strategic uncertainty and how much is actually due to individual bounded rationality? We address this question by conducting a set of experiments involving two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer opponent perfectly predictable, the latter treatment eliminates strategic uncertainty. Our results suggest that observed coordination failures can be attributed equally to individual bounded rationality and strategic uncertainty.
    Date: 2013
  9. By: Verena Utikal
    Abstract: Apologies have a positive effect on forgiveness. Nevertheless not all people apologize after an offense. In a laboratory experiment we test whether lying aversion can explain this behavior by comparing honest and fake apologies. First, we show that even an honest apology comes along with a cost for some people. Second, costs for fake apologies are even higher. Fake apologies are less likely than honest apologies and consist of different wording and content. Receivers understand apologies as a signal for honesty. Following, forgiveness after an honest apology is more likely than after a fake apology.
    Keywords: Apology, Lying, Intentions, Experiment
    Date: 2013
  10. By: Sherman, Eliot L.; Chatman, Jennifer A.
    Abstract: Understanding how a task group’s demographic composition influences its effectiveness requires considering situational demands. We explore this insight in a high-pressure situation, Himalayan mountain climbing. We hypothesize that the distribution of members’ nationality withinclimbing expeditions is a meaningful basis for ingroup categorization, and that nationalheterogeneity within expeditions is associated with intragroup competition manifested through climbers’ propensity to take more risk to reach the summit. We test this hypothesis using an archival dataset comprised of 2,756 non-commercial Himalayan expeditions undertaken from1950 to 2010. Our results show that nationally diverse expeditions are more likely to experience a climber injury or death but also that a greater proportion of their group will reach the summit of their target mountain. We also conduct individual level analyses to better understand howrelative demography—being part of a more or less heavily represented nation in the expedition—influences climbers’ likelihood of being injured or killed and summiting. We discuss the implications of our findings for group demography research and consider how they might extend to work groups that operate in other types of high-pressure environments.
    Keywords: Human Resources Management and Services, Group Composition, Himalayan Mountaineering, Diversity
    Date: 2013–04–04
  11. By: Kodila-Tedika, Oasis; Agbor , Julius
    Abstract: This paper investigates the effects of religion on a broad set of development outcomes in sub-Saharan Africa. We regroup these outcomes into three broad categories, namely, development process outcomes (growth, investment, conflict, and government quality), institutional outcomes (property rights and the rule of law) and social development outcomes (social and gender protection). Using two new measures of religion – religious fractionalization (RELFRAC) and religious polarization (RELPOL), alongside the traditional measure of religious diversity, our results suggest that broadly speaking, religion or religious diversity has no statistically significant impact on the institutional and social aspects of development in sub-Saharan Africa. However, our findings do suggest that religion has important effects on the development process through its effects on investment. The analysis suggests that African policy-makers need to pay attention to the changing religious dynamics and increasing religious polarization of African societies.
    Keywords: Economic development, Africa, Religious Polarization; Conflict; Religious diversity
    JEL: D74 O1 O55 Z12
    Date: 2013–04–17
  12. By: Ruffle, Bradley (Ben Gurion University); Tobol, Yossi (Jerusalem College of Technology (JTC))
    Abstract: We show that temporally distancing the decision task from the payment of the reward increases honest behavior. Each of 427 Israeli soldiers fulfilling their mandatory military service rolled a six-sided die in private and reported the outcome to the unit's cadet coordinator. For every point reported, the soldier received an additional half-hour early release from the army base on Thursday afternoon. Soldiers who participated on Sunday (the first work day of the week) are significantly more honest than those who participated later in the week. We derive practical implications for eliciting honesty.
    Keywords: experimental economics, honesty, temporal distance, soldiers
    JEL: C93 D63
    Date: 2013–03
  13. By: Alberto Alesina; Paola Giuliano
    Abstract: We study the role of the most primitive institution in society: the family. Its organization and relationship between generations shape values formation, economic outcomes and influences national institutions. We use a measure of family ties, constructed from the World Values Survey, to review and extend the literature on the effect of family ties on economic behavior and economic attitudes. We show that strong family ties are negatively correlated with generalized trust; they imply more household production and less participation in the labor market of women, young adult and elderly. They are correlated with lower interest and participation in political activities and prefer labor market regulation and welfare systems based upon the family rather than the market or the government. Strong family ties may interfere with activities leading to faster growth, but they may provide relief from stress, support to family members and increased wellbeing. We argue that the value regarding the strength of family relationships are very persistent over time, more so than institutions like labor market regulation or welfare systems.
    JEL: J2 J6 O4 O5 Z1
    Date: 2013–04
  14. By: Jason Collins (Business School, University of Western Australia); Oliver Richards (Australian Treasury)
    Abstract: We propose that the recent rise in the fertility rate in developed countries is the beginning of a broad-based increase in fertility towards above-replacement levels. Environmental shocks that reduced fertility over the past 200 years changed the composition of fertility-related traits in the population and temporarily raised fertility heritability. As those with higher fertility are selected for, the “high-fertility” genotypes are expected to come to dominate the population, causing the fertility rate to return to its pre-shock level. We show that even with relatively low levels of genetically based variation in fertility, there can be a rapid return to a high-fertility state, with recovery to above-replacement levels usually occurring within a few generations. In the longer term, this implies that the proportion of elderly in the population will be lower than projected, reducing the fiscal burden of ageing on developed world governments. However, the rise in the fertility rate increases the population size and proportion of dependent young, presenting other fiscal and policy challenges.
    Date: 2013
  15. By: Cervellati, Matteo (University of Bologna); Vanin, Paolo (University of Bologna)
    Abstract: This paper proposes a theory of the relationship between prohibitions and temptation. In presence of self-control problems, moral values may increase individual material welfare (and utility) by serving as a self-commitment device. The model investigates the relationship between morality and temptation, the individual gains from morality, the interaction between external sanctions and moral self-punishment and the spread and strength of individually optimal moral values. The empirical analysis, based on survey data for a large set of countries, documents a hump-shaped pattern of morality in social class, which supports the theoretical predictions of the model.
    Keywords: self-control, temptation, prohibitions, moral values, crime
    JEL: D03 K42 Z13
    Date: 2013–04

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