nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒01‒10
seven papers chosen by
Matthew Baker
City University of New York

  1. Reference Dependent Altruism By Breitmoser, Yves; Tan, Jonathan H.W.
  2. Explaining Behavior in the "11-20” Game By Lawrence C.Y Choo; Todd R. Kaplan
  3. Digit Ratios and Social Preferences: A Comment on Buser (2012) By Pablo Brañas-Garza; Jaromír Kovárík
  4. Social mobility at the top: Why are elites self-reproducing? By Elise S. Brezis; Joel Hellier
  5. Evolution, empowerment and emancipation: How societies ascend the utility ladder of freedoms By Christian Welzel; Ronald Inglehart
  6. Genes, security, tolerance and happiness By Ronald Inglehart; Svetlana Borinskaya; Anna Cotter; Jaanus Harro; Ronald C. Inglehart; Eduard Ponarin; Christian Welzel
  7. The Construction of Morals By Daniel L. Chen; Susan Yeh

  1. By: Breitmoser, Yves; Tan, Jonathan H.W.
    Abstract: In view of behavioral patterns left unorganized by current social preference theories, we propose a theory of reference dependent altruism (RDA). With RDA, one's degree of altruism increases at reference points. It induces equity and efficiency effects that are conditional on whether or not payoffs meet reference points. We verify the theory first by experimentally analyzing majority bargaining, where observed behavior contradicts existing theories but confirms RDA. Using parameter estimates from majority bargaining, we then make out-of-sample predictions for Charness-Rabin, Engelmann-Strobel, and Bolton-Ockenfels games. RDA organizes these seemingly disparate games out-of-sample, which validates our hypothesis that pro-social behavior primarily relates to reference points.
    Keywords: bargaining, non-cooperative game, laboratory experiment, social preferences, quantal response equilibrium
    JEL: C72 C78 D72
    Date: 2014–01–07
  2. By: Lawrence C.Y Choo (Department of Economics, University of Exeter); Todd R. Kaplan (Department of Economics, University of Exeter and University of Haifa)
    Abstract: We investigate whether subjects’ behavior in the Arad and Rubinstein (2012) "11-20" game could be well explained by the k-level process described by the authors. We replicated their game in our baseline experiment and provided two other variations that retained the same mixed-strategy equilibrium but resulted in different predicted behavior by the k-level process. Our experiments results suggest that k-level process leads to inconsistent predictions. In contrast to the standard k-level process as in Arad and Rubinstein, we allow players to best respond stochastically in our "SK" model and compared the model’s statistical fit against the Quantal Response Equilibrium and Cognitive Hierarchy Model. The SK model and Cognitive Model were able to outperform the QRE in a statistical sense and performed as well as each other. In addition, theCognitiveHierarchy and to lesser extend the SK model, demonstrate consistent estimates. Our findings suggest that the behavioral assumptions of Arad and Rubinstein k-level process does not fully explain behavior in the "11-20" and better explanations could be obtained when one allows for stochastic best responds as in the SK and Cognitive Hierarchy Models.
    Keywords: k-level, Cognitive Hierarchy, Quantal Response Equilibrium, "11-20" money request game.
    JEL: C73 C91
    Date: 2014
  3. By: Pablo Brañas-Garza (Middlesex University London, Business School); Jaromír Kovárík (Dpto. Fundamentos Analisis Economico I & BRiDGE, University of the Basque Country)
    Abstract: Buser (2012) reports an association between the second-to-fourth digit ratio, a biomarker of the exposure to prenatal sex hormones, and behavior in several classic experimental games designed to elicit prosocial attitudes. His subjects self-report whether they have shorter, equal, or larger ring than index nger. We argue that this elicitation method is inappropriate. It generates a poor proxy for the digit ratio as it suers from measurement errors. As a result, using this variable in the regression analysis may lead to inconsistent estimates.
    Keywords: Digit ratio, measurement errors, endogeneity, social preferences, non-monotonicity, altruism
    Date: 2013
  4. By: Elise S. Brezis (Azrieli Center for Economic Policy (ACEP), Bar-Ilan University, Israel); Joel Hellier (Department of Economics, EQUIPPE, Univ. de Lille and LEMNA, Univ. de Nantes, France)
    Abstract: This paper proposes an explanation for the decrease in social mobility that has occurred in the last two decades in a number of advanced economies, as well as for the divergence in mobility dynamics across countries. Within an intergenerational framework, we show that a two-tier higher education system with standard and elite universities generates social stratification, high social immobility and self-reproduction of the elite. Moreover, we show that the higher the relative funding for elite universities, the higher the elite self-reproduction, and the lower social mobility. We also analyse the impacts of changes in the weight of the elite and of the middle class upon social mobility. Our findings provide theoretical bases for the inverted-U profile of social mobility experienced in several countries since World War II and to the ``Great Gatsby Curve'' relating social mobility to inequality.
    Keywords: Elite, higher education, selection, social mobility, social stratification.
    JEL: I21 J62 O15 Z13
    Date: 2013–11
  5. By: Christian Welzel (Center for the Study of Democracy, Leuphana University, Scharnhorststr.); Ronald Inglehart (Higher School of Economics)
    Abstract: This article presents a new theory of development that unifies disparate insights into a single framework, focusing on human empowerment—a process that emancipates people from domination. Human empowerment sets in when mass-scale technological progress widens ordinary people’s ‘action resources.’ As this happens, life turns from a source of threats into a source of opportunities, and societies climb the utility ladder of freedoms: universal freedoms become instrumental to taking advantage of what a more promising life offers. Accordingly, people adopt ‘emancipative values’ that emphasize universal freedoms. As the utility and value of freedoms rise, ‘civic entitlements’ that guarantee these become undeniable at some point. Human empowerment thus proceeds as the sequential growth in the utility, value and guarantee of freedoms (sequence thesis). Because universal freedoms are a reciprocal good that flourishes through mutual recognition, the utility ladder of freedoms is a social ladder: people climb it in alliance with like-minded others who share similar utilities (solidarity thesis). Historically speaking, human empowerment on a mass scale started only recently because civilization matured late where natural conditions bestow an initial utility on freedoms that has been absent elsewhere (initiation thesis). However, globalization is breaking human empowerment free from its confinement to the initially favourable conditions (contagion thesis). Together, these theses form an evolutionary theory of emancipation. After unfolding this theory, the article presents evidence in support of its major propositions.
    Keywords: action resources - civic entitlements - civilization process - cool-water condition - democratization - economic development - emancipation theory - emancipative values - human empowerment - social evolution - technological progress - utility ladder of freedoms
    JEL: E11
    Date: 2013
  6. By: Ronald Inglehart (Higher School of Economics); Svetlana Borinskaya (Institute of General Genetics, Moscow, Russia); Anna Cotter (University of Michigan); Jaanus Harro (Department of Psychology, University of Tartu, Estonian Centre of Behavioral and Health Sciences); Ronald C. Inglehart (University of Michigan); Eduard Ponarin (Higher School of Economics); Christian Welzel (Center for the Study of Democracy, Leuphana University, Scharnhorststr.)
    Abstract: This paper discusses correlations between certain genetic characterestics of the human populations and their aggregate levels of tolerance and happiness. We argue that a major cause of the systematic clustering of genetic characteristics may be climatic conditions linked with relatively high or low levels of parasite. This may lead certain populations to develop gene pools linked with different levels of avoidance of strangers, which helped shape different cultures, both of which eventually helped shape economic development. Still more recently, this combination of distinctive cultural and economic and perhaps genetic factors has led some societies to more readily adopt gender equality and high levels of social tolerance, than others. More tolerant societies tend to be happier because they create a more relaxed environment conducive to happiness.
    Keywords: genetic research, World Values Survey, happiness, tolerance.
    JEL: E11
    Date: 2013
  7. By: Daniel L. Chen (ETH Zurich); Susan Yeh (George Mason University School of Law)
    Abstract: When do policies generate expressive or backlash effects? Recent economic models suggest that where a proscribed activity is prevalent, permissive laws liberalize attitudes toward partakers while increasing utility. The opposite occurs in communities where the proscribed activity is rare. To test these predictions, we randomize data entry workers to transcribe newspaper summaries of liberal or conservative court decisions about obscenity. We find that liberal obscenity decisions liberalize individual and perceived community standards and increase utility. Yet religious workers become more conservative in their values, identify as more Republican, view community standards as becoming more liberal, and report lower utility. Workers update beliefs about the prevalence of sexual activities differently in response to liberal or conservative decisions. These results provide causal evidence for the law having indirect social effects that may amplify or attenuate deterrence effects and suggest that legitimacy of law can affect utility and self-identification. Length: 58
    Keywords: obscenity law, belief updating, values, norms, sexual risk
    JEL: D83 K1 K42 Z1
    Date: 2013–11

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