nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2013‒05‒11
thirteen papers chosen by
Matthew Baker
City University of New York

  1. Simultaneous Decision-Making in Competitive and Cooperative Environments By Savikhin , Anya; Sheremeta , Roman
  2. Fairness norms can explain the emergence of specific cooperation norms in the Battle of the Prisoners Dilemma By Fabian Winter
  3. On Social Sanctions and Beliefs: A Pollution Norm Example By Garcia, Jorge H.; Wei, Jiegen
  4. Gender and other determinants of trust and reciprocity in an experimental labour market amongst Chinese students By Uwe Dulleck; Jonas Fooken; Yumei He
  5. Dynamics of Social Norms in the City By Fabien Moizeau
  6. Spatial Segregation and Urban Structure By Pierre M. Picard; Pascal Mossay
  7. Experimental Departures from Self-Interest when Competing Partnerships Share Output By Cherry, Josh; Salant, Stephen; Uler, Neslihan
  8. Trust and Prosperity: A Conditional Relationship By Asongu , Simplice A.; Kodila-Tedika, Oasis
  9. Does Cultural Heritage affect Employment decisions – Empirical Evidence for Second Generation Immigrants in Germany By Anja Koebrich Leon
  10. The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test. By Anil Alpman
  11. The Cost of Segregation in Social Networks By Nizar Allouch
  12. Kinetic exchange models: From molecular physics to social science By Marco Patriarca; Anirban Chakraborti
  13. An Analysis of Black-box Optimization Problems in Reinsurance: Evolutionary-based Approaches By Sancho Salcedo-Sanz; L. Carro-Calvo; Mercè Claramunt; Anna Castañer; Maite Marmol

  1. By: Savikhin , Anya; Sheremeta , Roman
    Abstract: We experimentally investigate simultaneous decision-making in two contrasting environments: one that encourages competition (lottery contest) and one that encourages cooperation (public good game). We find that simultaneous participation in the public good game affects behavior in the contest, decreasing sub-optimal overbidding. Contributions to the public good are not affected by participation in the contest. The direction of behavioral spillover is explained by differences in strategic uncertainty and path-dependence across games. Our design allows us to compare preferences for cooperation and competition. We find that in early periods, there is a negative correlation between decisions in competitive and in cooperative environments.
    Keywords: cooperation, competition, public goods, contests, experiments, behavioral spillover
    JEL: C72 C91
    Date: 2012–03–05
  2. By: Fabian Winter (Max Planck Institute of Economics, Jena)
    Abstract: Cooperation norms often emerge in situations, where the long term collective benefits help to overcome short run individual interests, for instance in repeated Prisoner's Dilemma (PD) situations. Often, however, there are different paths to cooperation, benefiting different kinds of actors to different degrees. This leads to payoff asymmetries even in the state of cooperation, and consequently can give rise to normative conflicts about which norms should be in place. This norm-coordination problem will be modeled as a Battle of the Sexes game (BoS) with different degrees of asymmetry in payoffs. We combine the PD and the BoS to the 3×3 Battle of the Prisoners Dilemma (BOPD) with several asymmetric cooperative and one non-cooperative equilibria. Bame theoretical and "behavioral" predictions are derived about the kind of norms that are likely to emerge under different shadows of the future and degrees of asymmetry and tested in a lab-experiment. Our experimental data show that game theory fairly well predicts the basic main effects of our experimental manipulations, but "behavioral" predictions perform better in describing the equilibrium selection process of emerging norms.
    Keywords: Social norms, normative conflict, Prisoner's Dilemma, coordination, experiment
    JEL: Z13 C92 C72 D31
    Date: 2013–04–24
  3. By: Garcia, Jorge H.; Wei, Jiegen
    Abstract: A prevailing view in the literature is that social sanctions can support, in equilibrium, high levels of obedience to a costly norm. The reason is that social disapproval and stigmatization faced by the disobedient are highest when disobedience is the exception rather than the rule in society. In contrast, the (Bayesian) model introduced here shows that imperfect information causes the expected social sanction to be lowest precisely when obedience is more common. This, amongst other fi?ndings, draws a distinct line between social and moral sanctions, both of which may depend on others' ?behavior but not on action observability.
    Keywords: social interactions, social norms, asymmetric information
    JEL: D82 K42 L51
    Date: 2013–02–14
  4. By: Uwe Dulleck; Jonas Fooken; Yumei He
    Abstract: Due to economic and demographic changes highly educated women play an important role on the Chinese labour market. Gender has been shown to be an important characteristic that influences behaviour in economic experiments, as have, to a lesser degree, academic major, age and income. We provide a study looking at trust and reciprocity and their determinants in a labour market laboratory experiment. Our experimental data is based on two games, the Gift Exchange Game (GEG) and a variant of this game (the Wage Promising Game, WPG) where the employer's wage offer is non-binding and the employer can choose the wage freely after observing the workers effort. We find that women are less trusting and reciprocal than men in the GEG while this cannot be found in the WPG. Letting participants play the GEG and the WPG, allows us to disentangle reciprocal and risk attitudes. While in the employer role, it seems to be that risk attitude is the main factor, this is not confirmed analysing decisions in the worker role.
    Date: 2013–05–01
  5. By: Fabien Moizeau (CREM CNRS UMR 6211, University of Rennes 1, Condorcet Center and Institut Universitaire de France (IUF))
    Abstract: We study how in a city either opposite social norms remain or a particular code of behavior spreads and ultimately prevails. We develop a multicommunity model with overlapping generations. When young, an individual chooses the level of educational e¤ort. The crucial feature is that her decision is inuenced by peers living in the area who favor either a social norm valuing education or a social norm discrediting education. When an adult, an individual who cares about her o¤springs expected income chooses the familys location. Endogenous location leads to di¤erent patterns of social norms in the city. We identify two types of urban equilibrium: a culturally-balanced city where social norms are distributed evenly among urban areas and the rate of education is the same in each urban area and a culturally-divided city where urban areas oppose on their prevailing social norm and exhibit di¤erent rates of education. We then study the dynamics of social norms. We show that there are multiple long-run patterns of social norms. A particular steady state is achieved depending on the initial distribution of social norms support in the population. Finally, we show that the public policies promoting social integration can lead in the long run to a population unanimously discrediting education and getting less education than letting the culturally-divided city arise.
    Date: 2013–04
  6. By: Pierre M. Picard (CREA, University of Luxembourg and CORE, Université Catholique de Louvain); Pascal Mossay (Department of Economics, University of Reading and CORE)
    Abstract: In this paper, we study social interactions between two populations of individuals living in a city. Agents consume land and benefit from intra- and inter-group social interactions. We show that in equilibrium segregation arises: populations get separated in distinct spatial neighborhoods. Two- and three-district urban structures are characterized. For high population ratios or strong inter-group interactions, only a three-district city exists. In other cases, multiplicity of equilibria arises. Moreover, for sufficiently low population ratios or very weak inter-group interactions, all individuals agree on which spatial equilibrium is best.
    Keywords: social interaction, segregation, multiple centers, urban districts
    JEL: R12 R14 R31
    Date: 2013
  7. By: Cherry, Josh; Salant, Stephen; Uler, Neslihan
    Abstract: When every individual's effort imposes negative externalities, self-interested behavior leads to socially excessive effort. To curb these excesses when effort cannot be monitored, competing output-sharing partnerships can form. With the right-sized groups, aggregate effort falls to the socially optimal level. We investigate this theory experimentally and find it makes correct qualitative predictions but there are systematic quantitative deviations, always in the direction of the socially optimal investment. By using data on subjects' conjectures of each other's behavior we show that deviations are consistent with both altruism and conformity (but not extremeness aversion).
    Keywords: output-sharing, partnership solution, laboratory experiment, altruism, conformity
    JEL: L23 Q20 Q22 O13
    Date: 2013–03–14
  8. By: Asongu , Simplice A.; Kodila-Tedika, Oasis
    Abstract: The paper extends Breggren et al. (2008, EE) on ‘trust and growth: a shaky relationship” by incorporating recent developments in the trust-growth literature and using a robust methodological underpinning that accounts for the presence of outliers. The empirical evidence is based on 63 countries. Two main findings are established. Firstly, the substantially documented positive trust-growth nexus is broadly confirmed. Secondly, when initial levels of growth come into play in determining the relationship, only 0.25 and 0.90 quantiles confirm the positive nexus. The results suggest that the trust-growth nexus cannot be generalized for all countries as some previous studies have concluded. Accordingly, blanket trust-growth policies may not succeed unless they are contingent in existing levels of development and tailored differently across rich and poor countries.
    Keywords: Trust; Growth; Conditional Effects
    JEL: A13 O40 Z13
    Date: 2013–05–07
  9. By: Anja Koebrich Leon (Institute of Economics, Leuphana University Lueneburg, Germany)
    Abstract: The participation rate of women in the labor market shows a sizeable variation across countries and across time. Following studies conducted for North America, this section tests the hypothesis whether, next to structural conditions, cultural norms with regard to existing role models within society about working women influence a woman’s participation decision. While using the epidemiological approach to economics, which aims to compare economic outcomes between immigrant groups to assess the role cultural factors may play, the persistence of heterogeneity in labor market outcomes across immigrant groups is used to assess the role cultural norms regarding working women may play in explaining differences in labor market outcomes between immigrant groups for first and second generation women in Germany. To overcome the problems associated with a qualitative proxy of culture, such as religiosity or ethnicity, the impact of culture on women working behavior is proxied by past female labor force participation (LFP) rates from the woman’s country of origin or their parents, respectively. Using data from the GSOEP for the years 2001 to 2011, compared to findings from Fernández and Fogli (2009) and Gevrek et al 2011, which use large census data sets, I find statistically significant results for the association between cultural norms towards labor market behavior of women, as measured either by past female LFP in country of origin, country of origin indicator variables or attitudes towards working women prevalent in their home country, merely for first generation immigrants in Germany. However, while cultural heritage was found to play an inferior role for second generation immigrant women, religious identity, as a specific cultural trait, exhibits a strong negative relation with Muslim labor market behavior for both generations.
    Keywords: female labor force participation; cultural norms; ethnicity; ethnic identity; religious identity
    JEL: J15 J21 Z10
    Date: 2013–04
  10. By: Anil Alpman (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This paper proposes a new formulation of the theory of social norms. The theoretical model explores the interrelation between individuals' income, time-use and consumption decisions on the one hand, and the determinants of their decision to conform or not to social norms on the other. It is shown that rational consumers will obey inefficient social norms, which in turn will slow economic development. An empirical test of the model is performed for different categories of countries using a voluminous cross-country micro dataset. The results yield the gain and the cost of disobeying inefficient social norms, the latter of which can be used as a freedom indicator regarding social pressure.
    Keywords: Consumer theory, social norms, social interactions, household production model, economic efficiency.
    JEL: D11 D12 Z13
    Date: 2013–04
  11. By: Nizar Allouch (Queen Mary, University of London)
    Abstract: This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an "asymptotic neutrality" of redistributive policies.
    Keywords: Public goods, Segregated society, Private provision, Networks, Bonacich transfer index
    JEL: C72 D31 H41
    Date: 2013–05
  12. By: Marco Patriarca; Anirban Chakraborti
    Abstract: We discuss several multi-agent models that have their origin in the kinetic exchange theory of statistical mechanics and have been recently applied to a variety of problems in the social sciences. This class of models can be easily adapted for simulations in areas other than physics, such as the modeling of income and wealth distributions in economics and opinion dynamics in sociology.
    Date: 2013–05
  13. By: Sancho Salcedo-Sanz (Department of Signal Theory and Communications, Universidad de Alcala, Spain.); L. Carro-Calvo (Department of Signal Theory and Communications, Universidad de Alcala, Spain.); Mercè Claramunt (Dept. Matematica Economica, Financera i Actuarial, Universitat de Barcelona, CREB, XREAP, Barcelona, Spain.); Anna Castañer (Dept. Matematica Economica, Financera i Actuarial, Universitat de Barcelona, CREB, XREAP, Barcelona, Spain.); Maite Marmol (Dept. Matematica Economica, Financera i Actuarial, Universitat de Barcelona, CREB, XREAP, Barcelona, Spain.)
    Abstract: Black-box optimization problems (BBOP) are dened as those optimization problems in which the objective function does not have an algebraic expression, but it is the output of a system (usually a computer program). This paper is focussed on BBOPs that arise in the eld of insurance, and more specically in reinsurance problems. In this area, the complexity of the models and assumptions considered to dene the reinsurance rules and conditions produces hard black-box optimization problems, that must be solved in order to obtain the optimal output of the reinsurance. The application of traditional optimization approaches is not possible in BBOP, so new computational paradigms must be applied to solve these problems. In this paper we show the performance of two evolutionary-based techniques (Evolutionary Programming and Particle Swarm Optimization). We provide an analysis in three BBOP in reinsurance, where the evolutionary-based approaches exhibit an excellent behaviour, nding the optimal solution within a fraction of the computational cost used by inspection or enumeration methods.
    Keywords: Reinsurance, Optimization Problems, Evolutionary-based algorithms
    Date: 2013–05

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