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on Evolutionary Economics |
| By: | Felipe Balmaceda (Facultad de Economía y Empresa, Universidad Diego Portales); Juan Escobar (Departamento de Ingenieria Industrial, Universidad de Chile) |
| Abstract: | This paper investigates the social structures that maximize trust and cooperation when agreements are implicitly enforced. We study a repeated trust game in which the social network determines the information transmission technology. We show that cohesive communities, modeled as social networks of complete components, emerge as the optimal community design. Cohesive communities generate some degree of common knowledge of transpired play that allows players to coordinate their punishments and, as a result, yield relatively high equilibrium payos. Our results provide an economic rationale for the commonly argued optimality of cohesive social networks. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ptl:wpaper:40&r=evo |
| By: | Pandelis Perakakis (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); José Vicente Guinot (Laboratorio de Economía Experimental (LEE), Universitat Jaume I, Castellón, Spain); Alfonso Conde (Laboratorio de Economía Experimental (LEE), Universitat Jaume I, Castellón, Spain); Tarek Jaber-López (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Aurora García-Gallego (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Nikolaos Georgantzis (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | The increasing use of physiological recordings in experimental economics requires a precise timing of interesting events, such as the presentation of a set of choices, the decision-making moment and the reception of feedback through the display of a decision outcome. In this note we provide a simple, accurate and inexpensive solution based on the use of external photo-sensors that detect changes in light intensity on the participants’ screens occurring in synchrony with experimental events. This system ensures an accurate communication between standard programs broadly used to run behavioral economic experiments, such as z-Tree, and biosignal acquisition systems recording physiological variables, such as skin conductance, heart rate and electroencephalogram. An example is briefly discussed, offering specific guidelines for the application of this methodology in economic contexts with strategic interaction. |
| Keywords: | Economic experiments, timing of events, psychophysiology, physioeconomics |
| JEL: | C90 C99 C88 B41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2013/12&r=evo |
| By: | W. Brian Arthur |
| Abstract: | This paper provides a logical framework for complexity economics. Complexity economics builds from the proposition that the economy is not necessarily in equilibrium: economic agents (firms, consumers, investors) constantly change their actions and strategies in response to the outcome they mutually create. This further changes the outcome, which requires them to adjust afresh. Agents thus live in a world where their beliefs and strategies are constantly being “tested” for survival within an outcome or “ecology” these beliefs and strategies together create. Economics has largely avoided this nonequilibrium view in the past, but if we allow it, we see patterns or phenomena not visible to equilibrium analysis. These emerge probabilistically, last for some time and dissipate, and they correspond to complex structures in other fields. We also see the economy not as something given and existing but forming from a constantly developing set of technological innovations, institutions, and arrangements that draw forth further innovations, institutions and arrangements. Complexity economics sees the economy as in motion, perpetually “computing” itself— perpetually constructing itself anew. Where equilibrium economics emphasizes order, determinacy, deduction, and stasis, complexity economics emphasizes contingency, indeterminacy, sense-making, and openness to change. In this framework time, in the sense of real historical time, becomes important, and a solution is no longer necessarily a set of mathematical conditions but a pattern, a set of emergent phenomena, a set of changes that may induce further changes, a set of existing entities creating novel entities. Equilibrium economics is a special case of nonequilibrium and hence complexity economics, therefore complexity economics is economics done in a more general way. It shows us an economy perpetually inventing itself, creating novel structures and possibilities for exploitation, and perpetually open to response. |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:thk:rnotes:33&r=evo |