nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2013‒06‒09
twelve papers chosen by
Matthew Baker
City University of New York

  1. Accepting Zero in the Ultimatum Game: Selfish Nash Response? By Gianandrea Staffiero; Filippos Exadaktylos; Antonio M. Espín
  2. Indirect Reciprocity, Golden Opportunities for Defection, and Inclusive Reputation By Hannes Rusch; Max Albert
  3. Incomplete Information Models of Guilt Aversion in the Trust Game By Giuseppe Attanasi; Pierpaolo Battigalli; Elena Manzoni
  4. Tangible temptation in the social dilemma: Cash, cooperation, and self-control By Kristian Ove R. Myrseth; Gerhard Riener; Conny Wollbrant
  5. Social Identity and Punishment By Jeffrey V. Butler; Pierluigi Conzo; Martin A. Leroch
  6. Competitive Altruism and Endogenous Reference Group Selection in Private Provision of Environmental Public Goods By Heinz Welsch; Jan Kühling
  7. Does Social Judgement Diminish Rule Breaking? By Timothy C. Salmon; Danila Serra
  8. The Relevance of Social Norms for Economic Efficiency: Theory and its Empirical Test By Anil Alpman
  9. From Malthusian to Modern fertility: When intergenerational transfers matter By Luca Spataro; Luciano Fanti
  10. Risk and time preferences under the threat of background risk: a case-study of lahars risk in central Java By Marc Willinger; Mohamed Ali Bchir; Carine Heitz
  11. Social Capital, Investment and Economic Growth: Evidence for Spanish Provinces By Tortosa-Ausina Emili; Peiró Palomino Jesús
  12. Social Capital and the Family: Evidence that Strong Family Ties Cultivate Civic Virtues By Ljunge, Martin

  1. By: Gianandrea Staffiero (Universitat Pompeu Fabra); Filippos Exadaktylos (BELIS, Murat Sertel Center for Advanced Economic Studies,Istanbul Bilgi University); Antonio M. Espín
    Abstract: The rejection of unfair proposals in ultimatum games is often quoted as evidence of other-regarding preferences. In this paper we focus on those responders who accept any proposals, setting the minimum acceptable offer (MAO) at zero. While this behavior could result from the randomization between the two payoff-maximizing strategies (i.e. setting MAO at zero or at the smallest positive amount), it also implies that the opponent’s payoff is maximized and the “pie†remains intact. We match subjects’ behavior as ultimatum responders with their choices in the dictator game, in two large-scale experiments. We find that those who set MAO at zero are the most generous dictators. Moreover, they differ substantially from responders whose MAO is the smallest positive offer, who are the greediest dictators. Thus, an interpretation of zero MAOs in terms of selfish, payoff-maximizing behavior could be misleading. Our evidence indicates that the restraint from punishing others can be driven by altruism and by the desire to maximize social welfare.
    Keywords: ultimatum game, dictator game, altruism, social welfare, costly punishment, selfishness, social preferences
    JEL: C93 C91 D03 C70
    Date: 2012–01
  2. By: Hannes Rusch (University of Giessen); Max Albert (University of Munich)
    Abstract: In evolutionary models of indirect reciprocity, reputation mechanisms can stabilize cooperation even in severe cooperation problems like the prisoner’s dilemma. Under certain circumstances, conditionally cooperative strategies, which cooperate iff their partner has a good reputation, cannot be invaded by any other strategy that conditions behavior only on own and partner reputation. The first point of this paper is to show that an evolutionary version of backward induction can lead to a breakdown of this kind of indirectly reciprocal cooperation. Backward induction, however, requires trategies that count and then cease to cooperate in the last, last but one, last but two, game they play. These strategies are unlikely to exist in natural settings. We then present two new findings. (1) Surprisingly, the same kind of breakdown is also possible without counting. Strategies using rare golden opportunities for defection can invade conditional cooperators. This can create further golden opportunities, inviting the next wave of opportunists, and so on, until cooperation breaks down completely. (2) Cooperation can be stabilized against these opportunists, by letting an individual’s initial reputation be inherited from that individual’s parent. This ‘inclusive reputation’ mechanism can cope with any observably opportunistic strategy. Offspring of opportunists who successfully exploited a conditional cooperator cannot repeat their parents’ success because they inherit a bad reputation, which forewarns conditional cooperators in later generations.
    Keywords: evolutionary game theory; repeated prisoner’s dilemma; backward induction; conditional cooperation; opportunism;
    JEL: C73
    Date: 2013
  3. By: Giuseppe Attanasi; Pierpaolo Battigalli; Elena Manzoni
    Abstract: In the theory of psychological games it is assumed that players' preferences on material consequences depend on endogenous beliefs. Most of the applications of this theoretical framework assume that the psychological utility functions representing such preferences are common knowledge. But this is often unrealistic. In particular, it cannot be true in experimental games where players are subjects drawn at random from a population. Therefore an incomplete-information methodology is called for. We take a first step in this direction, focusing on models of guilt aversion in the Trust Game. We consider two alternative modeling assumptions: (i) guilt aversion depends on the role played in the game, because only the trustee can feel guilt for letting the co-player down, (ii) guilt aversion is independent of the role played in the game. We show how the set of Bayesian equilibria changes as the upper bound on guilt sensitivity varies, and we compare this with the complete-information case. Our analysis illustrates the incomplete-information approach to psychological games and can help organize experimental results in the Trust Game.
    Keywords: Psychological games, Trust Game, guilt, incomplete information
    JEL: C72 C91 D03
    Date: 2013–06
  4. By: Kristian Ove R. Myrseth (ESMT European School of Management and Technology); Gerhard Riener (DICE, University of Düsseldorf); Conny Wollbrant (University of Gothenburg)
    Abstract: The social dilemma may contain, within the individual, a self-control conflict between urges to act selfishly and better judgment to cooperate. Examining the argument from the perspective of temptation, we pair the public good game with treatments that vary the degree to which money is abstract (merely numbers on-screen) or tangible (tokens or cash). We also include psychometric measures of self-control and impulsivity. Consistent with our hypothesis, we find in the treatments that render money more tangible a stronger positive association between cooperation and self-control—and a stronger negative association between cooperation and impulsivity. Our results shed light on the conditions under which self-control matters for cooperation.
    Keywords: Self-control, pro-social behavior, public good experiment, temptation
    JEL: D01 D03 D64 D70
    Date: 2013–05–24
  5. By: Jeffrey V. Butler (EIEF); Pierluigi Conzo (University of Turin); Martin A. Leroch (University of Mainz)
    Abstract: Third party punishment is crucial for sustaining cooperative behavior. Still, little is known about its determinants. In this paper we use laboratory experiments to investigate a long-conjectured interaction between group identification and bystanders' punishment preferences using a novel measure of these preferences. We induce minimal groups and give a bystander the opportunity to punish the perpetrator of an unfair act against a defenseless victim. We elicit the bystander's valuation for punishment in four cases - when the perpetrator, the victim, both or neither are members of the bystander's group. We generate testable predictions about the rank order of punishment valuations from a simple framework incorporating group-contingent preferences for justice which are largely confirmed. Finally, we conduct control sessions where groups are not induced. Comparing punishment across treatment and control suggests that third-party punishers tend to treat others as in-group members unless otherwise divided.
    Date: 2013
  6. By: Heinz Welsch (University of Oldenburg, Department of Economics); Jan Kühling (University of Oldenburg, Department of Economics)
    Abstract: We develop and test a model of social comparison in which individuals gain status through pro-social behavior (competitive altruism) and in which they endogenously choose the reference group and associated reference standard involved in signaling status (reference group selection). In our framework of private provision of environmental public goods, the optimal reference standard involves a balance between the magnitude of the status signal (implying a low reference standard) and the higher value of the signal in a greener social environment. By using a unique set of survey data we find evidence of (a) respondents behaving in a competitively altruistic fashion and (b) reference persons’ intensity of pro-environmental behavior depending on relevant attitudes of the respondents, consistent with predictions from our framework of reference group selection.
    Keywords: competitive altruism; reference groups; endogenous reference standard; pro-environmental behavior; private public good provision
    JEL: D64 H31 H41 Q00
    Date: 2012–10
  7. By: Timothy C. Salmon; Danila Serra
    Abstract: We experimentally investigate the extent to which social obervability of one's actions and the possibility of social non-monetary judgment affect the decision to engage in rule breaking behavior.  We consider three rule bfeaking scenarios - theft, bribery and embezzlement - in the absence of any formal enforcement mechanism.  By involving a student sample characterized by cultural heterogeneity due to immigraiton of ancestors to the US, we are able to investigate whether the effectiveness of informal social enforcement mechanisms is conditional on the cultural background of the decision-maker.  A total of 52 countries are represented in our sample, ranging from Low Rule of Law countries such as Liberia and Nigeria to High Rule of Law countries such as Sweden and Norway.  Our data provide evidence that people with different cultural backgrounds do respond differently to increased social observability of their actions.  In particular, while subjects that dientify culturally with a High Rule of law country respond to social obervability and judgment by lowering their propensities to engage in rule breaking, subjects that identify with Low Rule of law countries do not.  Our findings suggest that development policies that rely purely on social judgment to enforce behavior may not work with Low Rule of Law populations
    Keywords: Theft, corruption, social enforement, culture, experiemnts
    JEL: C90 D73 K42 Z10
    Date: 2013–03–15
  8. By: Anil Alpman (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    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
    Date: 2013–04
  9. By: Luca Spataro; Luciano Fanti
    Abstract: In a standard OLG model of a small open economy with logarithmic utility and endogenous fertility we show that the reversion of the relationship between fertility and wages (i.e. a transition from the Malthusian to the Modern fertility behaviour) may be possible in presence of intergenerational public transfers(i.e. public national debt or PAYG pensions). In fact, as known, the latter have been implemented mostly in the advanced Western Countries, where the fertility behavior reversion has mainly occurred. We show that such a reversion is more likely to occur in economies that are entailed with low interest rate, low costs for raising children and low degree of patience, and high preference for children.
    Keywords: overlapping generations, endogenous fertility, savings,small open economy, public national debt, PAYG pension scheme,demographic transition.
    JEL: D91 E62 H63 J13
    Date: 2013–05–01
  10. By: Marc Willinger; Mohamed Ali Bchir; Carine Heitz
    Abstract: We study the evolution of preferences of villagers living under the threat of natural hazards in a volcanic area (Mount Mer- api, Central Java). Between December 2010 and April 2011, shortly after a major eruption, the villagers (perceived) expo- sure changed dramatically. We ran incentivized experiments at the beginning and after this period in order to elicit villagers' risk preferences and time preferences. Our three main …ndings are as follows: (1) there exists a signi…cant negative correlation between risk-tolerance and impatience (before and after): individuals who are more risk-tolerant are less impatient; (2) most respondents exhibit a change in their risk preference and/or time preference after having been exposed to a higher level of threat; (3) there ex- ists a signi…cant negative correlation between the erosion of risk tolerance and the erosion of patience: individuals who became less (more) risk-tolerant also became more (less) impatient.
    Date: 2013–05
  11. By: Tortosa-Ausina Emili (INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie) UNIVERSITY JAUME I); Peiró Palomino Jesús (Universidad Jaime I)
    Abstract: This working paper analyzes the impact of social capital on economic growth in Spain during the 1985-2005 period. The literature in this context is virtually nonexistent and, in addition, whereas most studies, regardless of their context, have used survey data in order to measure social capital, we use a measure whose construction is based on similar criteria to other measures of capital stock. In addition, compared with more standard measures of social capital and trust, the measure we use is available with a high level of disaggregation, and with annual frequency for a long time period. Following a panel data approach, our findings indicate that social capital has a positive impact on GDP per capita growth in the context of Spanish provinces, implying that social features are important for explaining the differences in wealth observable across Spanish provinces. Following some recent contributions, we also explore the transmission mechanisms from social capital to growth, finding a highly positive relation between social capital and private physical investment.
    Keywords: Growth, physical capital investment, province, social capital
    JEL: Z13 O18 R11
    Date: 2012–09
  12. By: Ljunge, Martin (Research Institute of Industrial Economics (IFN))
    Abstract: I establish a positive relationship between family ties and civic virtues, as captured by disapproval of tax and benefit cheating, corruption, and a range of other dimensions of exploiting others for personal gain. I find that family ties are a complement to social capital, using within country evidence from 83 nations and data on second generation immigrants in 29 countries with ancestry in 85 nations. Strong families cultivate universalist values and produce more civic and altruistic individuals. The results provide a constructive role for families in promoting family values, which challenge an ‘amoral familism.’ Moreover, strong families are complementary with more developed and democratic institutions. The results provide a constructive role for families in promoting family values that support successful societies with a high state and fiscal capacity.
    Keywords: Family ties; Civic; Family values; Cultural transmission; Altruism; Social capital
    JEL: A13 H26 P16 Z13
    Date: 2013–06–04

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