nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2015‒03‒27
three papers chosen by
Matthew Baker
City University of New York

  1. Stable Observable Behavior By Heller, Yuval; Mohlin, Erik
  2. The impact of formal institutions on social trust formation: A social-cognitive approach By Tamilina, Larysa; Tamilina, Natalya
  3. Why Are Indian Children So Short? By Jayachandran, Seema; Pande, Rohini

  1. By: Heller, Yuval; Mohlin, Erik
    Abstract: We study stable behavior when players are randomly matched to play a game, and before the game begins each player may observe how his partner behaved in a few interactions in the past. We present a novel modeling approach and we show that strict Nash equilibria are always stable in such environments. We apply the model to study the Prisoner's Dilemma. We show that if players only observe past actions, then defection is the unique stable outcome. However, if players are able to observe past action profiles, then cooperation is also stable. Finally, we present extensions that study endogenous observation probabilities and the evolution of preferences.
    Keywords: Evolutionary stability, random matching, indirect reciprocity, secret handshake, submodularity, image scoring.
    JEL: C72 C73 D01
    Date: 2015–03–19
  2. By: Tamilina, Larysa; Tamilina, Natalya
    Abstract: While formal institutions are recognized as having an effect on trust formation, no theoretical or empirical models exist to formalize this relationship. This study introduces a new conceptual framework to explain trust building by individuals and the role that formal rules and laws may play in this process. Drawing on a social-cognitive theory of psychology, we present trust as composed of personal, interpersonal, and intrapersonal components with the latter encompassing formal institutions. We further demonstrate that there are three mechanisms – sanction, legitimacy, and autonomy – through which formal institutions may affect trust levels either directly or indirectly. In addition, our empirical analysis furnishes evidence of heterogeneity in institutional effects on trust, suggesting that the autonomy dimension of the institutional framework is particularly important for trust formation processes.
    Keywords: Interpersonal trust, trust formation processes, formal institutions, social-cognitive psychology
    JEL: K4
    Date: 2014–05–01
  3. By: Jayachandran, Seema; Pande, Rohini
    Abstract: India's child stunting rate is among the highest in the world, exceeding that of many poorer African countries. In this paper, we analyze data for over 174,000 Indian and Sub-Saharan African children to show that Indian firstborns are taller than African firstborns; the Indian height disadvantage emerges with the second child and then increases with birth order. This pattern persists when we compare height between siblings, and also holds for health inputs such as vaccinations. Three patterns in the data indicate that India's culture of eldest son preference plays a key role in explaining the steeper birth order gradient among Indian children and, consequently, the overall height deficit. First, the Indian firstborn height advantage only exists for sons. Second, an Indian son with an older sibling is taller than his African counterpart if and only if he is the eldest son. Third, the India-Africa height deficit is largest for daughters with no older brothers, which reflects that fact that their families are those most likely to exceed their desired fertility in order to have a son.
    Keywords: development; economic growth; height; malnutrition; microeconomics
    JEL: D10 O12 O53
    Date: 2015–03

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