nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒03‒01
nine papers chosen by
Matthew Baker
City University of New York

  1. Fair and unfair punishers coexist in the Ultimatum Game By Pablo Branas-Garza; Antonio M. Espin; Benedikt Herrmann
  2. Self-Confidence, Overconfidence and Prenatal Testosterone Exposure: Evidence from the Lab By Patricio S. Dalton; Sayantan Ghosal
  3. Preferences for redistribution and social structure By Erik SCHOKKAERT; Tom TRUYTS
  4. Moving Ahead by Thinking Backwards: Cognitive Skills, Personality, and Economic Preferences in Collegiate Success By Burks, Stephen V.; Lewis, Connor; Kivi, Paul; Wiener, Amanda; Anderson, Jon E.; Götte, Lorenz; DeYoung, Colin G.; Rustichini, Aldo
  5. The Divorce Revolution and Generalized Trust: Evidence from the United States 1973-2010 By Viitanen, Tarja
  6. Cultural Diversity in Europe: a story of mutual benefit By Ulrike Hanna Meinhof
  7. The Economics of Human Development and Social Mobility By James J. Heckman; Stefano Mosso
  8. Tariffs, Social Status, and Gender in India By Anukriti, S; Kumler, Todd J.
  9. Study choices in an evolutionary game By Cyrille Piatecki

  1. By: Pablo Branas-Garza (Business School, Middlesex University London); Antonio M. Espin (GLOBE,Universidad de Granada; Departamento de Teoría e Historia Económica, Universidad de Granada); Benedikt Herrmann (Behavioural Economics Team, Institute for Health and Consumer Protection, Joint Research Centre, European Commission)
    Abstract: Fairness norms are crucial in understanding the emergence and enforcement of large-scale cooperation in human societies. The most widely applied framework in the study of human fairness is the Ultimatum Game (UG). In the UG, a proposer suggests how to split a sum of money with a responder. If the responder rejects the proposer’s offer, both players get nothing. Rejection of unfair offers is considered to be a form of punishment implemented by fair-minded individuals, who are willing to sacrifice their own resources in order to impose the fairness norm. However, an alternative interpretation is equally plausible: punishers might actually be using rejections in a competitive, spiteful fashion as a means to increase their relative standing. This hypothesis is in line with recent evidence demonstrating that “prosocial” and “antisocial” punishers coexist in other experimental games. Using two large-scale experiments, we explore the nature of UG punishers by analyzing their behavior in a Dictator Game. In both studies, we confirm the coexistence of two entirely different sub-populations: prosocial punishers, who behave fairly as dictators, and spiteful (antisocial) punishers, who are totally unfair. Such a result is fundamental for research on the foundations of punishment behavior employing the UG. We discuss how focusing only on the fairness-oriented part of human behavior might give rise to misleading conclusions regarding the evolution of cooperation and the behavioral underpinnings of stable social systems.
    Date: 2014–01
  2. By: Patricio S. Dalton; Sayantan Ghosal
    Abstract: This paper examines whether the degree of confidence and overconfidence in one’s ability is determined biologically. In particular, we study whether foetal testosterone exposure correlates with an incentive-compatible measure of confidence within an experimental setting. We find that men (rather than women) who were exposed to high testosterone levels in their mother’s womb are less likely to overestimate their actual performance, which in turn helps them to gain higher monetary rewards. Men exposed to low prenatal testosterone levels, instead, set unrealistically high expectations which results in self-defeating behavior. These results from the lab are able to recon- cile hitherto disconnected evidence from the field, by providing a link between traders’ overconfidence bias, long-term financial returns and prenatal testosterone exposure.
    Keywords: 2D:4D, testosterone, neuroeconomics, expectations, overconfidence, self- confidence, goals.
    JEL: C91 D03 D87
    Date: 2014–02
    Abstract: We model inter-individual differences in preferences for redistribution as a function of (a) self-interest; (b) stable ideological traits; (c) subjective perceptions of the relative importance of the main determinants of income differences (luck, effort, talent). Individuals base the latter on information obtained from their reference group. We analyse the consequences for redistributive preferences of homophilous reference group formation based on talent. We argue that our theoretical results make it possible to understand and integrate some of the main insights from the empirical literature. We illustrate with GSS data from 1987 how our model may help in structuring empirical work.
    Date: 2014–01
  4. By: Burks, Stephen V. (University of Minnesota, Morris); Lewis, Connor (University of Minnesota, Morris); Kivi, Paul (University of Minnesota, Morris); Wiener, Amanda (University of Minnesota, Morris); Anderson, Jon E. (University of Minnesota, Morris); Götte, Lorenz (University of Lausanne); DeYoung, Colin G. (University of Minnesota); Rustichini, Aldo (University of Minnesota)
    Abstract: We collected personality (Big Five) and demographic characteristics, and ran incentivized experiments measuring cognitive skills (non-verbal IQ, numeracy, backward induction/ planning), and economic (time, risk) preferences, with 100 students at a small public undergraduate liberal arts college in the Midwestern US as part of a larger study that collected the same measures from 1,065 trainee truckers. Using standardized (z-score) versions of our variables we analyze their relative power to predict (1) timely graduation (four years or less), (2) graduation in six years or less, and (3) final GPA. The proactive aspect of Conscientious (but not the inhibitive one) has a large and robust positive effect on all three outcomes, and Agreeableness has a robust negative effect on both graduation outcomes, but not on GPA. Economic time preferences predict graduation in four years, and GPA. Cognitive skill measures predict as expected if entered individually in a multivariate model, but when all variables compete it is only our backward induction measure ("Hit15") that weakly predicts graduation in four years, and strongly predicts graduation in six years. Trainee truckers work in a different vocational setting and their results are appropriately different, but there is a common element: Hit15 also predicts their job success (completing a one year employment contract that makes training free). We interpret Hit15 as capturing a specific part of the cognitive skills required for self-management in non-routine settings – thinking backward from future goals to make the best current choice – that is not well measured by existing instruments, and suggest this deserves further scientific and institutional scrutiny.
    Keywords: graduation, Big Five, cognitive skill, backward induction, economic preferences, GPA
    JEL: D03 I21 C99
    Date: 2014–02
  5. By: Viitanen, Tarja (University of Otago)
    Abstract: This paper examines the effect of exposure to a culture of easier divorce as a minor on generalized trust using the General Social Survey from 1973-2010. The easier divorce culture is defined as the introduction of no-fault including unilateral divorce reforms across the US. According to the results, the divorce revolution seems to have had some effect on trust levels across the US. While there are no discernible effects for the whole sample of men, there are statistically significant effects for women with an additional year of exposure being associated with a 4 percentage point lower generalized trust in the states with easy divorce culture compared to states with fault based divorce culture. An analysis by sub-group of women indicates that married and divorced/separated women have significantly lower levels of trust associated with exposure to easy divorce culture as a child. The findings are in agreement with the predictions of previous literature regarding no-fault divorce reforms reducing the security offered by marriage, in particular for women.
    Keywords: divorce laws, trust, GSS, panel data analysis
    JEL: J12 K36 Z13
    Date: 2014–02
  6. By: Ulrike Hanna Meinhof
    Abstract: The paper highlights the considerable positive impact of cultural diversity and the mutual benefit accrued for migrants and non-migrants alike. Against the background of growing hostility against, and increasing politicisation of the presence of migrants in European societies it sets a different vision of mutual respect, collaboration and benefit. So as to show the way in which contemporary migration is not a ‘one-way’ street of movements from poorer to richer countries where the rich offer all and receive nothing in return, the paper develops a four-tiered ‘hub’ structure that highlights complex multidirectional connections and mutual support of people in transnational networks. Central to the argument is the understanding that migrants do not come empty-handed but possess substantial ‘transcultural capital ‘that forms the basis for enriching reciprocal encounters between the global North and the global South. The paper offers much-needed empirical data from these encounters based on the author’s field work in Madagascar and across different European countries.
    Date: 2013–12–11
  7. By: James J. Heckman; Stefano Mosso
    Abstract: This paper distills and extends recent research on the economics of human development and social mobility. It summarizes the evidence from diverse literatures on the importance of early life conditions in shaping multiple life skills and the evidence on critical and sensitive investment periods for shaping different skills. It presents economic models that rationalize the evidence and unify the treatment effect and family influence literatures. The evidence on the empirical and policy importance of credit constraints in forming skills is examined. There is little support for the claim that untargeted income transfer policies to poor families significantly boost child outcomes. Mentoring, parenting, and attachment are essential features of successful families and interventions to shape skills at all stages of childhood. The next wave of family studies will better capture the active role of the emerging autonomous child in learning and responding to the actions of parents, mentors and teachers.
    JEL: I20 I24 I28 J13
    Date: 2014–02
  8. By: Anukriti, S (Boston College); Kumler, Todd J. (Columbia University)
    Abstract: This paper shows that trade policy can have significant intergenerational distributional effects across gender and social strata. We compare women and births in rural Indian districts more or less exposed to tariff cuts. For low socioeconomic status women, tariff cuts increase the likelihood of a female birth and these daughters are less likely to die during infancy and childhood. On the contrary, high-status women are less likely to give birth to girls and their daughters have higher mortality rates when more exposed to tariff declines. Consistent with the fertility-sex ratio trade-off in high son preference societies, fertility increases for low-status women and decreases for high-status women. An exploration of the mechanisms suggests that the labor market returns for low-status women (relative to men) and high-status men (relative to women) have increased in response to trade liberalization. Thus, altered expectations about future returns from daughters relative to sons seem to have caused families to change the sex-composition of and health investments in their children.
    Keywords: trade liberalization, India, gender, sex ratio, child mortality, fertility
    JEL: F13 I15 J12 J13 J16 J82 O15 O18 O19 O24
    Date: 2014–02
  9. By: Cyrille Piatecki (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans)
    Abstract: Depuis la contribution de Becker (1964), l'accumulation de capital humain n'a été développée que dans le cadre des choix individuels fondés sur les attentes salariales. Pour plus de quarante ans, cette approche s'est montrée fructueuse. Cependant, avec la raréfaction des emplois en période de crise, elle semble incapable d'expliquer la plupart des décisions concernant l'accumulation de capital humain. En effet, parce que personne ne peut être sûr d'obtenir un emploi qui donnera un rendement positif à son niveau d'études, la décision d'acquérir la formation continue ne peut être appréhendée comme une décision stratégique prise dans une situation d'information imparfaite. Cette décision individuelle dépendra de la réponse à la question simple suivante: avec le niveau d'études que j'ai l'intention d'acquérir, vais-je avoir de plus grandes chances d'obtenir un emploi que mes camarades de classe qui ont arrêté leurs études à un niveau inférieur?
    Keywords: Economie du travail, jeux évolutionnaires, interactions stratégiques
    Date: 2014–02–03

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