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on Evolutionary Economics |
| By: | Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Martin G. Kocher (University of Munich, University of Gothenburg and CESifo Munich) |
| Abstract: | Take-it or leave-it offers are probably as old as mankind. Our objective here is, first, to provide a, probably subjectively-colored, recollection of the initial ultimatum game experiment, its motivation and the immediate responses. Second, we discuss important extensions of the standard ultimatum bargaining game in a unified framework, and, third, we offer a survey of the experimental ultimatum bargaining literature containing papers published since the turn of the century. The paper argues that the ultimatum game is an extremely versatile tool for research in bargaining and on social preferences. Finally, we provide examples for open research questions and directions for future studies. |
| Keywords: | ultimatum bargaining, experiment, social preferences |
| JEL: | C91 |
| Date: | 2013–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-035&r=evo |
| By: | Tamilina, Larysa; Tamilina, Natalya |
| Abstract: | While formal institutions are recognized as having an effect on trust formation, no theoretical or empirical models exist to formalize this relationship. This study introduces a new conceptual framework to explain trust building by individuals and the role that formal rules and laws may play in this process. Drawing on a social-cognitive theory of psychology, we present trust as composed of internal, interpersonal, and external components with the latter encompassing formal institutions. We further demonstrate that there are three mechanisms – sanction, legitimacy, and autonomy – through which formal institutions may affect trust levels either directly or indirectly. These propositions are tested empirically based on the European Social Survey data (2004) by using a variety of statistical techniques. Our empirical analysis demonstrates evidence of heterogeneity in institutional effects on trust, suggesting that the autonomy dimension of the institutional framework is particularly important for trust formation processes. |
| Keywords: | interpersonal trust, formal institutions, social-cognitive psychology, heterogeneity, trust formation process |
| JEL: | K42 Z10 Z13 |
| Date: | 2013–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:49812&r=evo |
| By: | Guillermo Baquero (ESMT European School of Management and Technology); Willem Smit (SMU, IMD); Luc Wathieu (Georgetown University, McDonough School of Business) |
| Abstract: | We explore the interaction between fairness attitudes and reference dependence both theoretically and experimentally. Our theory of fairness behavior under reference-dependent preferences in the context of ultimatum games, defines fairness in the utility domain and not in the domain of dollar payments. We test our model predictions using a within-subject design with ultimatum and dictator games involving gains and losses of varying amounts. Proposers indicated their offer in gain- and (neatly comparable) loss- games; responders indicated minimum acceptable gain and maximum acceptable loss. We find a significant “generosity effect” in the loss domain: on average, proposers bear the largest share of losses as if anticipating responders’ call for a smaller share. In contrast, reference dependence hardly affects the outcome of dictator games -where responders have no veto right- though we detect a small but significant “compassion effect”, whereby dictators are on average somewhat more generous sharing losses than sharing gains. |
| Keywords: | Fairness, loss domain, ultimatum game, dictator game, referencedependent preferences, social preferences |
| JEL: | D03 D81 |
| Date: | 2013–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:esm:wpaper:esmt-13-08&r=evo |
| By: | Dimitrios Varvarigos |
| Abstract: | Recent evidence of increasing fertility rates in developed countries, offers support to the idea that, from the onset of early industrialisation to the present day, the dynamics of fertility can be represented by an N-shaped curve. An OLG model with parental investment in human capital can account for these observed movements in fertility rates during the different phases of demographic change. A demographic transition with declining fertility emerges at the intermediate phase, when parents engage on a child quantity-quality tradeoff. At later stages however, the continuing process of economic growth generates sufficient resources so that households can rear more children while still providing the desirable amount of educational investment per child. |
| Keywords: | Demographic transition; Fertility rebound; Human capital |
| JEL: | J11 O41 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:13/19&r=evo |