nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2014‒05‒04
eight papers chosen by
Matthew Baker
City University of New York

  1. With God We Trust: Religion, Trust and Cooperation in Large-Scale Societies By Julien Gagnon
  2. A threshold for biological altruism in public goods games played in groups including kin By Hannes Rusch
  3. The Biocultural Origins of Human Capital Formation By Galor, Oded; Klemp, Marc
  4. Expectation Formation in an Evolving Game of Uncertainty: Theory and New Experimental Evidence By Gigi Foster; Paul Frijters; Markus Schaffner; Benno Torgler
  5. Average player traits as predictors of cooperation in a repeated prisoner's dilemma By Al-Ubaydli, Omar; Jones, Garett; Weel, Jaap
  6. A Reformulation of Normative Economics for Models with Endogenous Preferences By Vipul Bhatt; Masao Ogaki; Yuichi Yaguchi
  7. Experimental games on networks: Underpinnings of behavior and equilibrium selection By Gary Charness; Francesco Feri; Miguel A. Meléndez-Jiménez; Matthias Sutter
  8. The Out of Africa Hypothesis of Comparative Development Reflected by Nighttime Light Intensity By Ashraf, Quamrul; Galor, Oded; Klemp, Marc

  1. By: Julien Gagnon
    Abstract: The first aim of this paper is to revisit the puzzle of cooperation in large-scale societies.It proposes a game theoretic model showing how endogenous emotion-based punishment can sustain ull cooperation when interactions are not repeated, provided that players' endogenous trust is high enough. The model the signalling theory of religion. Finally, the model enables clear and tractable predictions about the levels of religious affiliation and participation within a society. Evidence of the model's implications is discussed.
    Keywords: Cooperation; Emotions; Psychological Game Theory; Punishment; Religion; Trust.
    JEL: D02 D03 D71 D81 Z12
    Date: 2014–04–29
  2. By: Hannes Rusch (University of Giessen)
    Abstract: Phenomena like meat sharing in hunter-gatherers, altruistic self-sacrifice in intergroup conflicts, and contribution to the production of public goods in laboratory experiments have led to the development of numerous theories trying to explain human prosocial preferences and behavior. Many of these focus on direct and indirect reciprocity, assortment, or (cultural) group selection. Here, I investigate analytically how genetic relatedness changes the incentive structure of that paradigmatic game which is conventionally used to model and experimentally investigate collective action problems: the public goods game. Using data on contemporary hunter-gatherer societies I then estimate a threshold value determining when biological altruism turns into maximizing inclusive fitness in this game. I find that, on average, contributing no less than about 40% of individual fitness to public goods production still is an optimal strategy from an inclusive fitness perspective under plausible socio-ecological conditions.
    JEL: B15 C72 D64 H41
    Date: 2014
  3. By: Galor, Oded; Klemp, Marc
    Abstract: This research explores the biocultural origins of human capital formation. It presents the first evidence that moderate fecundity was conducive for long-run reproductive success within the human species. Exploiting an extensive genealogy record for nearly half a million individuals in Quebec during the seventeenth and eighteenth centuries, the study traces the number of descendants of early inhabitants in the subsequent four generations. Using the time interval between the date of marriage and the first live birth as a measure of reproductive capacity, the research establishes that while a higher fecundity is associated with a larger number of children, an intermediate level maximizes long-run reproductive success. The finding further indicates that the optimal level of fecundity was below the population median, suggesting that the forces of natural selection favored individuals with a lower level of fecundity. The research lends credence to the hypothesis that during the Malthusian epoch, natural selection favored individuals with a larger predisposition towards child quality, contributing to human capital formation, the onset of the demographic transition and the evolution of societies from an epoch of stagnation to sustained economic growth.
    Keywords: Demography, Evolution, Human Capital Formation, Natural Selection, Fecundity, Quantity-Quality Trade-Off, Long-Run Reproductive Success
    JEL: J10 O10
    Date: 2014–04–29
  4. By: Gigi Foster; Paul Frijters; Markus Schaffner; Benno Torgler
    Abstract: We examine the nature of stated subjective probabilities in a complex, evolving context in which true event probabilities are not within subjects' explicit information set. Specifically, we collect information on subjective expectations in a car race wherein participants must bet on a particular car but cannot influence the odds of winning once the race begins. In our setup, the actual probability of the good outcome (a win) can be determined based on computer simulations from any point in the process. We compare this actual probability to the subjective probability participants provide at three different points in each of 6 races. We find that the S-shaped curve relating subjective to actual probabilities found in prior research when participants have direct access to actual probabilities also emerges in our much more complex situation, and that there is only a limited degree of learning through repeated play. We show that the model in the S-shaped function family that provides the best fit to our data is Prelec's (1998) conditional invariant model.
    Keywords: behavioural economics; expected utility theory; experiments; expectations; probabilities
    JEL: D40 L10
    Date: 2013–11
  5. By: Al-Ubaydli, Omar; Jones, Garett; Weel, Jaap
    Abstract: Many studies have looked at how individual player traits influence individual choice in the repeated prisoner’s dilemma, but few studies have looked at how the average traits of pairs of players influence the average choices of pairs. We consider cognitive ability, patience, risk tolerance, and the Big Five personality measures as predictors of individual and average group choices in a ten-round repeated prisoner’s dilemma. We find that a pair’s average cognitive ability measured by the Raven’s IQ test predicts average cooperation rates robustly and average earnings more modestly. Higher individual cognitive ability also predicts a greater probability of sustaining cooperation in the second round, suggesting that positive reciprocity is more likely among players with higher Raven’s scores. Openness is the only control variable that predicts first-round cooperative behavior.
    Keywords: cooperation; IQ; personality; discount rate; patience; risk-aversion; prisoner's dilemma
    JEL: D02 D23 O12 O43
    Date: 2014–02–05
  6. By: Vipul Bhatt (Assistant Professor, Department of Economics, James Madison University (E-mail:; Masao Ogaki (Professor, Department of Economics, Keio University (E-mail:; Yuichi Yaguchi (Graduate Student, Graduate School of Economics, Chuo University, Tokyo, Japan)
    Abstract: This paper proposes to balance considerations from welfarism and virtue ethics for normative analysis of economic models with endogenous preferences. Our framework introduces two concepts that are useful in evaluating alternative social states. First, we introduce the moral evaluation function (MEF), which is used to evaluate alternatives based on virtue ethics. Second, we introduce the social objective function (SOF), which gives weights to both the standard social welfare function (SWF) and the MEF. We illustrate our evaluation approach in the context of a model of intergenerational altruism with endogenous time preferences.
    Keywords: Moral virtue ethics, Welfarism, Cultural transmission of preferences, Tough love
    JEL: D03 Z18
    Date: 2014–04
  7. By: Gary Charness; Francesco Feri; Miguel A. Meléndez-Jiménez; Matthias Sutter
    Abstract: In this paper, we describe a series of laboratory experiments that implement specific examples of a more general network structure and we examine equilibrium selection. Specifically, actions are either strategic substitutes or strategic complements, and participants have either complete or incomplete information about the structure of a random network. Since economic environments typically have a considerable degree of complementarity or substitutability, this framework applies to a wide variety of settings. The degree of equilibrium play is striking, in particular with incomplete information. Behavior closely resembles the theoretical equilibrium whenever this is unique; when there are multiple equilibria, general features of networks, such as connectivity, clustering, and the degree of the players, help to predict informed behavior in the lab. People appear to be strongly attracted to maximizing aggregate payoffs (social efficiency), but there are forces that moderate this attraction: 1) people seem content with (in the aggregate) capturing only the lion’s share of the efficient profits in exchange for reduced exposure to loss, and 2) uncertainty about the network structure makes it considerably more difficult to coordinate on a demanding, but efficient, equilibrium that is typically implemented with complete information.
    Keywords: Random networks, Incomplete information, Connectivity, Clustering, Strategic substitutes, Strategic complements, Experiment
    JEL: C71 C91 D03 D85
    Date: 2014–04
  8. By: Ashraf, Quamrul; Galor, Oded; Klemp, Marc
    Abstract: This research establishes that migratory distance from the cradle of anatomically modern humans in East Africa and its effect on the distribution of genetic diversity across countries has a hump-shaped effect on nighttime light intensity per capita as observed by satellites, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. The finding lends further credence to the hypothesis that a significant portion of the variation in the standard of living across the globe can be attributed to factors that were determined in the distant past.
    Keywords: Nighttime light intensity, Out of Africa Hypothesis of Comparative Development, Genetic Diversity, Comparative Development, Migratory Distance from Africa
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2014–04–29

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