nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2013‒10‒18
ten papers chosen by
Matthew Baker
City University of New York

  1. The Social Egoist By Boschini, Anne; Muren, Astri; Persson, Mats
  2. Workers' propensity to cooperate with colleagues and the general population: a comparison based on a field experiment By Giacomo Degli Antoni
  3. Limitations to Signaling Trust with All or Nothing Investments By Eric Schniter; Roman M. Sheremeta; Timothy W. Shields
  4. Cooperation in Small Groups: The Effect of Group Size By Daniele Nosenzo; Simone Quercia; Martin Sefton
  5. Optimal Contracting with Altruism and Reciprocity By Matteo Bassi; Marco Pagnozzi; Salvatore Piccolo
  6. Guilt aversion and redistributive politics: A moral intuitionist approach By Le Garrec, Gilles
  7. Evolutionary determinants of war By Konrad, Kai A.; Morath, Florian
  8. Preferences, Homophily, and Social Learning By Ilan Lobel; Evan Sadler
  9. Aggregate effects of behavioral anomalies: A new research area By Frey, Bruno S.; Gallus, Jana
  10. Scitovsky, behavioural economics, and beyond By Pugno, Maurizio

  1. By: Boschini, Anne (Dept. of Economics, Stockholm University); Muren, Astri (Dept. of Economics, Stockholm University); Persson, Mats (Institute for International Economic Studies, Stockholm University)
    Abstract: People cooperate more in one-shot interactions than can be explained by standard textbook preferences. We discuss a set of non-standard preferences that can accommodate such behavior. They are social, in the sense of incorporating the payoffs of other persons; they are also norm-based, in the sense of taking into account the behavior of other persons. We show theoretically that, with such preferences, a Nash equilibrium with a strictly positive cooperation rate can exist. We use experimental data on within-subject decisions to show that such preferences are empirically plausible. The data show that, in addition to the well-known types (egoist, altruist, reciprocator), there is an important group: the social egoist. Such individuals care for people who have cooperated, but ignore people who have broken the implicit cooperation norm in society. The social egoists, who turn out to be different from “conditional cooperators”, account for one third of the observations in our experiment.
    Keywords: social norms; prisoner’s dilemma; hawk-dove game; egoism; altruism; reciprocity; conditional cooperation
    JEL: C91 D03 D64
    Date: 2013–10–10
  2. By: Giacomo Degli Antoni (University of Parma, Department of Law)
    Abstract: Experimental evidence shows that people tend to be more cooperative with persons belonging to their own group than with others. Strangely enough, this literature largely fails to consider a type of group pervasive in modern societies: colleagues belonging to the same productive organization. This is particularly curious if one considers the importance of cooperation among colleagues for the economic performance of organizations. This paper carries out an original experimental analysis which compares the level of cooperation of social cooperative workers when they are paired with colleagues and with people from the general population. In contrast with the literature on in-group favoritism, we find that workers trust their colleagues less and cooperate less with them than they do with people from the general public, even though, in absolute terms, the level of cooperation is quite high also among colleagues. By analyzing first- and second-order beliefs, we show that the difference in cooperation is partly mediated by expectations concerning the counterpart's behavior, since workers expect their colleagues to be less cooperative than members of the general public. However, the analysis reveals that also other motivations count, such as other-regarding preferences and warm glow.
    Keywords: social cooperatives, field experiment, social dilemmas, in-group favoritism, trust, beliefs
    JEL: C72 C93 L31 P13 Z13
    Date: 2013–10
  3. By: Eric Schniter (Economic Science Institute, Chapman University); Roman M. Sheremeta (Department of Economics, Weatherhead School of Management, Case Western Reserve University and the Economic Science Institute); Timothy W. Shields (Argyros School of Business and Economics, Chapman University)
    Abstract: Many economic interactions are characterized by “all or nothing” action spaces that may limit a demonstrable index of trust and, therefore, the propensity to reciprocate. In two experimental trust games, the action space governing investments was manipulated to examine the effects on investments and reciprocity. In the continuous game the investor could invest any amount between $0 and $10, while in the binary game the investor could invest either $0 or $10. In both games, the trustee received the tripled investment and then could return any amount back to the investor. Investors invested significantly more in the binary game than in the continuous game. However, higher investments in the binary game did not lead to more reciprocity. To the contrary, conditional on investment of $10, on average trustees returned significantly less in the binary game than in the continuous game.
    Keywords: trust game, signaling, demonstrable index of trust, reciprocity, experiments
    JEL: C72 C91
    Date: 2013
  4. By: Daniele Nosenzo (School of Economics, University of Nottingham); Simone Quercia (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham)
    Abstract: We study the effect of group size on cooperation in voluntary contribution mechanism games. As in previous experiments, we study four- and eight-person groups in high and low marginal per capita return (MPCR) conditions. We find a positive effect of group size in the low MPCR condition, as in previous experiments. However, in the high MPCR condition we observe a negative group size effect. We extend the design to investigate two- and three-person groups in the high MPCR condition, and find that cooperation is highest of all in two-person groups. The findings in the high MPCR condition are consistent with those from n-person prisoner’s dilemma and oligopoly experiments that suggest it is more difficult to sustain cooperation in larger groups. The findings from the low MPCR condition suggest that this effect can be overridden. In particular, when cooperation is low other factors, such as considerations of the social benefits of contributing (which increase with group size), may dominate any negative group size effect.
    Keywords: voluntary contribution mechanism, cooperation, group size
    Date: 2013–05
  5. By: Matteo Bassi (Università di Napoli Federico II and CSEF); Marco Pagnozzi (Università di Napoli Federico II and CSEF); Salvatore Piccolo (Università Cattolica delSacro Cuore di Milano and CSEF)
    Abstract: Motivated by the recent experimental evidence on altruistic behavior, we study a simple principal-agent model where each player cares about other players’ utility, and may reciprocate their attitude towards him. We show that, relative to the selfish benchmark, efficiency improves when players are altruistic. Nevertheless, in contrast to what may be expected, an increase in the degree of the agent’s altruism as well as a more reciprocal behavior by players has ambiguous effects on efficiency. We also consider the effects of the presence of spiteful players and discuss how monetary transfers between players depend on their degrees of altruism and spitefulness.
    Keywords: Adverse selection, altruism, reciprocity, optimal contracting
    JEL: D64 D86
    Date: 2013–10–10
  6. By: Le Garrec, Gilles
    Abstract: In mainstream economics individuals are supposed to be driven only by their self-interest. By contrast, surveys clearly show that people do care about fairness in their demand for redistribution. In this article, in the spirit of the new synthesis in moral psychology (Haidt, 2007: The new synthesis in moral psychology) the author proposes to modelize the voting behavior over redistribution as the interaction between (a) an automatic cognitive process which quickly generates intuitions on the fair level of redistribution, (b) a rational self-oriented reasoning which controls the feeling of guilt associated with fair intuitions. In addition, considering that guilt aversion depends on the cultural context, the author shows that the model exhibits a multiplicity of history-dependent steady states which may account for the huge difference of redistribution observed between Europe and the United States. --
    Keywords: redistribution,voting behavior,fairness,behavioral economics
    JEL: D03 D64 D72 H53
    Date: 2013
  7. By: Konrad, Kai A.; Morath, Florian
    Abstract: This paper considers evolutionarily stable decisions about whether to initiate violent conflict rather than accepting a peaceful sharing outcome. Focusing on small sets of players such as countries in a geographically confined area, we use Schaffer’s (1988) concept of evolutionary stability. We find that players ‘evolutionarily stable preferences widen the range of peaceful resource allocations that are rejected in favor of violent conflict, compared to the Nash equilibrium outcomes. Relative advantages in fighting strength are reflected in the equilibrium set of peaceful resource allocations.
    Keywords: Conflict; Contest; Endogenous fighting; Balance of power; Evolutionary stability
    JEL: D72 D74
    Date: 2013–04–22
  8. By: Ilan Lobel (New York University Stern School of Business); Evan Sadler (New York University Stern School of Business)
    Abstract: We study a model of social learning in networks where agents have heterogeneous preferences, and neighbors tend to have similar preferences---a phenomenon known as homophily. Using this model, we resolve a puzzle in the literature: theoretical models predict that preference diversity helps learning, and homophily slows learning, while empirical work suggests the opposite. We find that the density of network connections determines the impact of preference diversity and homophily on learning. When connections are sparse, diverse preferences are harmful to learning, and homophily may lead to substantial improvements. In a dense network, preference diversity is beneficial. The conflicting findings in prior work result from a focus on networks with different densities; theory has focused on dense networks, while empirical papers have studied sparse networks. Our results suggest that in complex networks containing both sparse and dense components, diverse preferences and homophily play complementary, beneficial roles.
    Keywords: Social Networks, Learning, Homophily
    Date: 2013–09
  9. By: Frey, Bruno S.; Gallus, Jana
    Abstract: Much recent research in economics focuses on exploring behavioral anomalies, i.e., systematic deviations from the assumptions of the rationally self-interested model of man. Laboratory studies are used to identify seeming inconsistencies with micro-economic theory on the level of individuals. Since economics is a social science, this article proposes that the next crucial step consists in shifting the focus to the macro-level. It examines the process through which behavioral anomalies are aggregated to a societal outcome. Since individuals are reactive when they interact with others and face institutional constraints, the aggregation process may lead to different outcomes than what has been observed in individual-level studies: the respective anomalies may disappear, or they may become stronger on the macro-level. The discussion demonstrates that there are a great number of aspects to be analyzed. The paper presents fragments of what could become a more extensive field of research. --
    Keywords: economics and psychology,behavioral economics,behavioral anomalies,reactivity
    JEL: A10 B00 D70
    Date: 2013
  10. By: Pugno, Maurizio
    Abstract: By revisiting Scitovsky's work on well-being, which introduces 'novelty' into the consumer's option set as a peculiar source of satisfaction, this paper finds a number of connections with the recent behavioural economics so as to open new lines on inquiry. First, similarly to behavioural economics, Scitovsky used psychology to interpret sub-optimal choices. However, his welfare benchmark is different from rational choice, as understood by the economists, because 'novelty' implies a very strong form of uncertainty, as well as learning. Second, Scitovsky contributed to further elaboration of the two-systems framework put forward by Kahneman's recent book, which attempts to base behavioural economics on new foundations. Third, Scitovsky anticipated and contributed to specific analytical issues that have been studied in behavioural economics, such as the role of people's skill in uncertainty, the unpredictability of taste changes, and harmful addiction. --
    Keywords: Scitovsky,behavioural economics,novelty,consumption skill,strong uncertainty,harmful addiction
    JEL: B31 D03 D11
    Date: 2013

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