nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒01‒17
nine papers chosen by
Matthew Baker
City University of New York

  1. Digit Ratios and Social Preferences: A Comment on Buser (2012) By Pablo Brañas-Garza; Jaromír Kovárík
  2. Explaining Behavior in the "11-20" Game By Choo, Lawrence C.Y; Kaplan, Todd R.
  3. When best-replies are not in equilibrium: understanding cooperative behaviour By Irenaeus Wolff
  4. Signaling about norms: Socialization under strategic uncertainty By Fabrizio Adriani; Silvia Sonderegger
  5. Social preferences and lying aversion in children By Valeria Maggian; Marie Claire Villeval
  6. Approaches to well-being, use of psychology and paternalism in economics By Collewet, Marion
  7. Inequality, Ethnicity and Civil Conflict By John D. Huber; Laura Mayoral
  8. Episodes from the Early History of Experimentation in Economics By Andreas Ortman
  9. Some Conceptual and Methodological Issues on Happiness: Lessons from Evolutionary Biology By Yew-Kwang NG

  1. 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
  2. By: Choo, Lawrence C.Y; Kaplan, Todd R.
    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, the Cognitive Hierarchy 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: 2014–01–09
  3. By: Irenaeus Wolff
    Abstract: To understand cooperative behaviour in social-dilemma experiments, we need to understand the game participants play not only in monetary but in preference terms. Does a Nash-prediction based on participants' actual preferences describe their behaviour in a public-good experiment well? And if not, where does the observed behaviour diverge from the prediction? This study provides an environment which allows to answer these questions: when making their contribution decision, participants are informed about their co-playersÕ priorly-elicited conditional contribution preferences. This induces common knowledge of preferences and thereby leads to direct experimental control over the game participants play. Results show that most people play best-responses to their beliefs. At the same time, beliefs in a third of the cases do not correspond to an equilibrium prediction that is based on the elicited conditional-cooperation preferences. Moreover, more often than not, beliefs are empirically inaccurate. This holds true even in a treatment that gives participants the option to look up the set of equilibria of their game.
    Keywords: Public good, social dilemma, Nash-equilibrium, rational beliefs, conditional cooperation, social preferences.
    Date: 2013
  4. By: Fabrizio Adriani (Department of Economics, University of Leicester); Silvia Sonderegger (School of Economics, University of Nottingham)
    Abstract: We consider a society with informed individuals (adults) and naive individuals (children). Adults are altruistic towards their own children and possess information that allows to better predict the behavior of other adults. Children benefit from adopting behaviors that conform to the social norm determined by aggregate adult behavior, but, lacking accurate information, have to rely on the observed behavior of their adult parent to infer the norm. We show that this causes a signaling distortion in adult behavior. Compared to the benchmark case of no signaling, parents have a higher propensity to adopt attitudes that encourage their children to behave in a socially safe way, i.e. the way which would be optimal under maximum uncertainty about the prevailing social norm. This distortion is different in nature from the typical distortion due to a conflict of interest between sender and receiver in standard signaling games. The norm-signaling bias is self-reinforcing and might lead both to (Pareto) superior and inferior outcomes relative to the case of no signaling. We discuss applications to sexual attitudes, collective reputation, and trust.
    Keywords: Signaling, Norms, Strategic Uncertainty, Complementarities, Coordination Games, Socialization.
    Date: 2013–11
  5. By: Valeria Maggian (Università degli studi di Milano-Bicocca - UNIVERSITÀ DEGLI STUDI DI MILANO-BICOCCA); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon)
    Abstract: While previous research has shown that social preferences develop in childhood, we study whether this development is accompanied by reduced use of deception when lies would harm others, and increased use of deception to benefit others. In a sample of children aged between 7 and 14, we find strong aversion to lying at all ages. Lying is driven mainly by selfish motives and envy. Children with stronger social preferences are less prone to deception, even when lying would benefit others at no monetary cost. Older children lie less than younger children and require more selfjustification to lie.
    Keywords: Lie aversion; deception; social preferences; children; experiment
    Date: 2014–01–07
  6. By: Collewet, Marion
    Abstract: This paper discusses three approaches to well-being in economics which use insights from psychology to support their position: Scitovsky's Joyless Economy, happiness economics, and the constitutional approach to happiness in economics. It shows that in the way these approaches make use of psychology, normative choice is involved, and there is room for personal judgement. First, an approach to well-being, as an approach to what is worth pursuing, is necessarily normative. The use of psychological theories to support an approach to well-being relies on a normative step, revealed by the choice of a psychological theory by the economist. Second, personal judgement is often needed to translate the findings of psychology to recommendations for practice. Both things have implications for those theories which define well-being as something different than the fulfillment of individual preferences whatever they are, and therefore yield potential for paternalism. The paternalistic recommendations derived by economists are not based on positive science only, but also rely on personal judgement and normative choice. --
    Keywords: paternalism,well-being,Scitovsky,happiness economics,constitutional approach
    JEL: I31 D71 B21
    Date: 2014
  7. By: John D. Huber; Laura Mayoral
    Abstract: Although economic inequality has long been viewed as a cause of civil conflict, existing research has not found robust empirical support for this relationship. This study explores the connections between inequality and civil conflict by focusing on the mediating role of ethnic identity. Using over 200 individual-level surveys from 89 countries, we provide a new data set with country- and group-level measures of inequality within and across ethnic groups. We then show that consistent with Esteban and Ray’s (2011) argument about the need for labor and capital to fight civil wars, at both the country and group level, there is a strong positive association between within-group inequality and civil conflict. We do not, however, find support for previous arguments that inequality across ethnic groups should be associated with the incidence or intensity of civil conflict. By breaking down the measures of inequality into group-level components, the analysis helps explain why it is difficult to identify a relationship between general inequality and conflict. More generally, it highlights the limitations in cross-national research associated with drawing substantive conclusions by relying on measures of overall inequality, like the Gini.
    Keywords: ethnicity, inequality, civil conflict, gini decomposition, within-group inequality, between-group inequality, fractionalization
    JEL: D63 D74 J15 O15
    Date: 2013–10
  8. By: Andreas Ortman (School of Economics, Australian School of Business, the University of New South Wales)
    Keywords: Experimental methods, Early History of Experimentation in Economics
    JEL: B41 C9
    Date: 2013–12
  9. By: Yew-Kwang NG (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore, 637332.)
    Abstract: Despite recent intense interest, happiness studies have been impeded by some conceptual and methodological problems, including viewing happiness (well-being/welfare) as different over different persons, as relative, multi-dimensional, non-cardinally measurable, interpersonally noncomparable and using non-cardinal and interpersonally non-comparable methods of happiness measurement. Using the evolutionary biology of happiness, this paper argues that happiness is absolute, universal, and unidimensional and is also cardinally measurable and interpersonally comparable. This is needed to make choices motivated by reward (pleasure) and punishment (pain) consistent with fitness maximization. However, happiness indices obtained by virtually all existing methods of happiness measurement are largely non-cardinal and non-comparable, making the use of averaging in group happiness indices of dubious philosophical validity. A method of measuring happiness to give cardinal and interpersonally comparable indices is discussed. These may contribute towards the more scientific study of happiness that is based on sounder methodological grounds as well as yielding more useful results.
    Keywords: Evolutionary biology; happiness; interpersonal comparison; measurability; wellbeing; welfare.
    Date: 2013–08

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