nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2013‒06‒04
eleven papers chosen by
Matthew Baker
City University of New York

  1. Cooperation Hidden Frontiers: The Behavioral Foundations of the Italian North-South Divide By M. Bigoni; S. Bortolotti; M. Casari; D. Gambetta; F. Pancotto
  2. Recalibrational Emotions and the Regulation of Trust-Based Behaviors By Eric Schniter; Timothy Shields
  3. Learning in a Black Box By H Peyton Young; H.H. Nax; M.N. Burton-Chellew; S.A. West
  4. Surprising Gifts - Theory and Laboratory Evidence By Kiryl Khalmetski; Axel Ockenfels; Peter Werner
  5. Can You Trust the Good Guys? Trust Within and Between Groups with Different Missions By Fehrler, Sebastian; Kosfeld, Michael
  6. Justification and Legitimate Punishment By Xiao, Erte; Tan, Fangfang
  7. Resource scarcity, spite and cooperation By Sebastian Prediger; Bjoern Vollan; Benedikt Herrmann
  8. THE TIMES THEY ARE A CHANGIN': The effect of institutions on behavior, cooperation, emotional attachment and sentiment at 26,000ft By David A. Savage; Benno Torgler
  9. Beliefs and (In)Stability in Normal-Form Games By Hyndman, Kyle; Terracol, Antoine; Vaksmann, Jonathan
  10. Cross-cultural experimental economics and indigenous management research: Issues and contributions By Horak, Sven
  11. Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India By Anirban Mitra; Debraj Ray

  1. By: M. Bigoni; S. Bortolotti; M. Casari; D. Gambetta; F. Pancotto
    Abstract: Socio-economic performance differs not only across countries but within countries too and can persist even after religion, language, and formal institutions are long shared. One interpretation of these disparities is that successful regions are characterized by higher levels of trust, and, more generally, of cooperation. Here we study a classic case of within-country disparities, the Italian North-South divide, to find out whether people exhibit geographically distinct abilities to cooperate independently of many other factors and whence these differences emerge. Through an experiment in four Italian cities, we study the behavior of a sample of the general population toward trust and contributions to the common good. We find that trust and contributions vary in unison, and diminish moving from North to South. This regional gap cannot be attributed to payoffs from cooperation or to institutions, formal or informal, that may vary across Italy, as the experimental methodology silences their impact. The gap is also independent of risk and other-regarding preferences which we measure experimentally, suggesting that the lower ability to cooperate we find in the South is not due to individual \moral" flaws. The gap could originate from emergent collective properties, such as different social norms and the expectations they engender. The absence of convergence in behavior during the last 150 years, since Italy was unified, further suggests that these norms can persist overtime. Using a millennium-long dataset, we explore whether the quality of past political institutions and the frequency of wars could explain the emergence of these differences in norms.
    JEL: C90 D03
    Date: 2013–05
  2. By: Eric Schniter (Economic Science Institute, Chapman University); Timothy Shields (Economic Science Institute, Chapman University)
    Abstract: Though individuals differ in the degree to which they are predisposed to trust or act trustworthy, we theorize that trust-based behaviors are universally determined by the calibration of conflicting short- and long-sighted behavior regulation programs, and that these programs are calibrated by emotions experienced personally and interpersonally. In this chapter we review both the main-stream and evolutionary theories of emotions that philosophers, psychologists, and behavioral economists have based their work on and which can inform our understanding of trust-based behavior regulation. The standard paradigm for understanding emotions is based on mapping their positive and negative affect valence. While Valence Models often expect that the experience of positive and negative affect is interdependent (leading to the popular use of bipolar affect scales), a multivariate “recalibrational” model based on positive, negative, interpersonal, intrapersonal, short-sighted and long-sighted dimensions predicts and recognizes more complex mixed-valence emotional states. We summarize experimental evidence that supports a model of emotionally-calibrated trust regulation and discuss implications for the use of various emotion measures. Finally, in light of these discussions we suggest future directions for the investigation of emotions and trust psychology.
    Keywords: emotion, affect valence, recalibrational theory, trust game, experiment
    Date: 2013
  3. By: H Peyton Young; H.H. Nax; M.N. Burton-Chellew; S.A. West
    Abstract: Many interactive environments can be represented as games, but they are so large and complex that individual players are in the dark about what others are doing and how their own payoffs are affected.  This paper analyzes learning behavior in such 'black box' environments, where players' only source of information is their own history of actions taken and payoffs received.  Specifically we study repeated public goods games, where players must decide how much to contribute at each stage, but they do not know how much others have contributed or how others' contributions affect their own payoffs.  We identify two key features of the players' learning dynamics.  First, if a player's realized payoff increases he is less inclined to change his strategy, whereas if his realized payoff decreases he is more inclined to change his strategy.  Second, if increasing his own contribution results in higher payoffs he will tend to increase his contribution still further, whereas the reverse holds if an increase in contribution leads to lower payoffs.  These two effects are clearly present when players have no information about the game; moreover they are still present even when players have full information.  Convergence to Nash equilibrium occurs at about the same rate in both situations.
    Keywords: Learning, information, public goods games
    JEL: C70 C73 C91 D83 H41
    Date: 2013–04–23
  4. By: Kiryl Khalmetski; Axel Ockenfels; Peter Werner
    Abstract: People do not only feel guilt from not living up to others' expectations (Battigalli and Dufwenberg (2007)), but may also like to exceed them. We propose a model that generalizes the guilt aversion model to capture the possibility of positive surprises when making gifts. A model extension allows decision makers to care about others' attribution of intentions behind surprises. We test the model in two dictator game experiments. Experiment 1 shows a strong causal effect of recipients' expectations on dictators' transfers. Moreover, in line with our model, the correlation between transfers and expectations can be both, positive and negative, obscuring the effect in the aggregate. Experiment 2 shows that dictators care about what recipients know about the intentions behind surprises.
    Keywords: guilt aversion, surprise seeking, dictator game, consensus effect
    JEL: C91 D64
    Date: 2013–05–09
  5. By: Fehrler, Sebastian (University of Zurich); Kosfeld, Michael (Goethe University Frankfurt)
    Abstract: NGOs and other non-profit organizations attract workers who strongly identify themselves with their missions. We study whether these "good guys" are more trustworthy and how such pronounced group identities affect trust and trustworthiness within the groups and toward out-groups. We find that subjects who strongly identify themselves with a non-profit mission are more trustworthy in a minimal group setting but also harshly discriminate against out-groups when subjects are grouped by the missions they identify themselves with.
    Keywords: trustworthiness, trust, group identity, social identity theory, discrimination, organization
    JEL: C72 C92 M51
    Date: 2013–05
  6. By: Xiao, Erte; Tan, Fangfang
    Abstract: Punishment can lose its legitimacy if the enforcer can profit from delivering punishment. We use a controlled laboratory experiment to examine how justification can combat profit-seeking punishment and promote the legitimacy of punishment. In a one-shot sender-receiver game, an independent third party can punish the sender upon seeing whether the sender has told the truth. Most third parties punish the senders regardless of how the senders behave when they can profit from punishment. However, majority third parties punish the sender if and only if the sender lies when they have to provide explanations for their punishment decisions. Our data also suggests that senders are more likely to perceive punishment as legitimate and behave honestly when they know the enforcer has to justify their punishment decisions. Our findings suggest that justification requirement plays an important role in building efficient punishment institutions.
    Keywords: third-party punishment, justification, sender-receiver game, experiment
    JEL: C72 C92 D63 D83
    Date: 2013–05–22
  7. By: Sebastian Prediger; Bjoern Vollan; Benedikt Herrmann
    Abstract: Using an experimental approach, this paper examines how scarcity of natural resources affects people’s readiness to cooperate and to engage in antisocial behaviour. The experiments were carried out with pastoralists from southern Namibia whose livelihoods are highly dependent on grazing availability on their collectively used rangelands. We split the study region into two areas according to exogenous differences in biomass production, a high-yield and a low-yield area, and conduct a one-shot public goods experiment and the joy-of-destruction experiment with pastoralists from both areas. Results from the joy-of-destruction experiment reveal that a substantial fraction of people is willing to reduce another subject’s income, although this comes at an own cost. We show that this kind of spiteful behaviour occurs twice as often in the area where resources are scarcer and hence competitive pressure is higher. By contrast, levels of cooperation are very similar across areas. This indicates that scarcity does not hamper cooperation, at least as long as a sub-survival level has not been reached. Our data further reveal a coexistence of prosocial and antisocial behaviour within individuals, suggesting that people’s motivations depend on the experimental environment they are acting in. One possible explanation is that subjects are ready to cooperate when substantial net gains can be realized, but turn to spiteful money burners when there is no scope for efficiency improvements and the risk of “falling behind” is particularly salient.
    Keywords: competition, natural resource scarcity, antisocial behaviour, cooperation, Namibia, lab-in-the-field experiments
    JEL: C71 C72 C91 D03 H41 Q24
    Date: 2013–05
  8. By: David A. Savage; Benno Torgler
    Abstract: This paper attempts to determine if the introduction of a competing social institution has had a significant effect and shifted the pro-social behavior in the extreme (life-and-death) environment of mountaineering in the Himalayan Mountains over the last sixty years. We apply an analytic narratives approach to empirically investigate the link between death, success and the introduced social institution (commercialization). We use the Hawley and Salisbury (2007) Himalayan Database to determine if the introduction of this social institution is responsible for the decline in pro-social and altruistic behaviors. The results show that the change helping behavior is strongly correlated with the on mass introduction of commercialization. The results show a weakening of the prosocial behavior in the more "traditional climbers" in the modern period, created by a crowding out effect, which may have lead to the break down in prosocial behavior and the rise of anti-social behavior. Additionally, the results indicate that the prosocial behavior of the non-commercial groups in recent times may in fact be driven by the behavior of the Sherpa and not that of the climbers.
    Keywords: Decision under Pressure, Altruism, Tragic Events and Disasters, Survival, Natural Field Experiment, Mountaineering.
    JEL: D63 D64 D71 D81
    Date: 2013–05–17
  9. By: Hyndman, Kyle; Terracol, Antoine; Vaksmann, Jonathan
    Abstract: In this paper, we use experimental data to study players' stability in normal-form games where subjects have to report beliefs and to choose actions. Subjects saw each of 12 games four times in a regular or isomorphic form spread over two days without feedback. We document a high degree of stability within the same (strategically equivalent) game, although time and changes in the presentation of the game do lead to less stability. To look at stability across different games, we adopt the level-k theory, and show that stability of both beliefs and actions is significantly lower. Finally, we estimate a structural model in which players either apply a consistent level of reasoning across strategically different games, or reasoning levels change from game to game. Our results show that approximately 30% of subjects apply a consistent level of reasoning across the 12 games, but that they assign a low level of sophistication to their opponent. The remaining 70% apply different levels of reasoning to different games.
    Keywords: Game theory, Beliefs, Stability, Level-$k$ thinking
    JEL: C72 C91 D83
    Date: 2013–05–23
  10. By: Horak, Sven
    Abstract: Cross-Cultural Experimental Economics (CCEE) and Indigenous Management Research (IMR) are dynamic and flourishing disciplines today. Whereas the former lacks a deep understanding of the distinctive factors leading to behavioral differences so far, the latter gives priority to deep contextualization and cultural embeddedness of the research design. This paper argues that both disciplines can mutually benefit from each other. Based on a review of 23 articles, four general research fields are identified that CCEE is concerned with: fairness, cooperation, trust and norm enforcement. In these fields CCEE and IMR can meet and mutually advance knowledge: CCEE can benefit by applying increased contextualization in the future, i.e., by integrating indigenous context-specific variables explicitly into future research designs; IMR can benefit by applying a replicable quantitative research methodology enabling high-quality IMR (Tsui 2004). Both approaches will benefit from increased validity if research designs are systematically integrated in a mixed method design for future research. --
    Keywords: culture,cross-cultural economic experiments,indigenous management research,research methods,contextualization
    Date: 2013
  11. By: Anirban Mitra; Debraj Ray
    Abstract: We study inter-group conflict driven by economic changes within groups. We show that if group incomes are “low”, increasing group incomes raises violence against that group, and lowers violence generated by it. These predicted relationships demonstrate the complex connections between economic growth and violence, and in particular serve as tests for group aggression or victimization, which we apply to Hindu-Muslim violence in India. Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict. An increase in Hindu expenditures has negative or no effect. This robust empirical finding, combined with the theory, has direct implications for the origins of Hindu-Muslim violence in post-Independence India.
    JEL: O15 O43 O53
    Date: 2013–05

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