nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2015‒10‒17
six papers chosen by
Matthew Baker
City University of New York

  1. To friends everything, to strangers the law? An experiment on contract enforcement and group identity By Marian Panganiban
  2. Equality Concerns and the Limits of Self-Governance in Heterogeneous Populations By Lata Gangadharan; Nikos Nikiforakis; Marie Claire Villeval
  3. Stress and Coping - An Economic Approach By Klaus Wälde
  4. The Perils of Peer Punishment: Evidence from a Common Pool Resource Experiment By de Melo Gioia; Piaggio Matías
  5. Community Leaders and the Preservation of Cultural Traits By Prummer, Anja; Siedlarek, Jan-Peter
  6. Economic Growth and Evolution of Gender Equality By Tatiana Damjanovic; Geethanjali Selvaretnam

  1. By: Marian Panganiban (Max Planck Institute for Research on Collective Goods, Bonn, and Friedrich-Schiller-Universität, Jena)
    Abstract: Although the role of formal and informal institutions in promoting economic growth and sustaining exchange relations is now well established, explaining and differentiating how informal and formal rules affect individual behavior remain a challenge. This study aims to distill the essential characteristics of formal and informal institutions and disentangle their effects on trust and performance in exchange relations through a laboratory experiment. Formal institutions are modeled as third-party contract enforcement while informal institutions are represented as shared group identity. Results show that trust choices increase as contract enforcement increases but are not affected by shared group identity. However, performance is more likely to occur in interactions with in-group members than out-group members.
    Keywords: institutions, exchange relations, contract enforcement, group identity, laboratory experiments
    JEL: C72 C91 D03 D81
    Date: 2015–10–09
  2. By: Lata Gangadharan (Monash University, Department of Economics - Monash University); Nikos Nikiforakis (New York University Abu Dhabi - Abu Dhabi); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS)
    Abstract: Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality. Agents' concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism which allows individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no tension between efficiency and equality – the mechanism permits group to obtain maximum efficiency. This is not the case in heterogeneous populations where individuals derive different benefits from cooperation. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest that equality concerns can impose limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.
    Keywords: Communication, rewards, cooperation, normative conflict, heterogeneity
    Date: 2015
  3. By: Klaus Wälde (Johannes Gutenberg University Mainz)
    Abstract: Stress is ubiquitous in society. In our model, stressors translate into subjective stress via an appraisal process. Stress reduces instantaneous utility of an individual directly and via a cognitive load argument. Coping can be functional and under the control of the individual or more automatic with dysfunctional features. We predict the occurrence and frequency of uncontrolled coping emotional outbursts as a function of an individuals personality and environment. Outbursts cannot always be avoided. Delaying emotional outbursts articially can lead to even more outbursts. Looking at the e/ect of psychotherapy shows that expecting little and being emotional can help maximizing well-being.
    Keywords: Stress, coping, personality, controlled vs. automatic reaction, emotional outbursts, optimal stopping problem
    JEL: D03 D91 I12
  4. By: de Melo Gioia; Piaggio Matías
    Abstract: We provide experimental evidence on the effects of social disapproval by peers among communities of Uruguayan small-scale fishers exploiting a common pool resource (CPR). We combined this treatment with an in-group (groups from a single community) / mixed group (groups composed of fishers from different communities) treatment. We find that mixed groups, unlike in-groups, reduce their exploitation of the resource in response to the threat of punishment. Both in in-groups and mixed groups there is substantial antisocial punishment, which leads to increased extraction of the CPR by those who are unfairly punished. These findings indicate that effective peer punishment requires coordination to prevent antisocial targeting and to clarify the social signal conveyed by punishment.
    Keywords: Social disapproval; Social preferences; Common pool resource.
    JEL: D03 O12 C93
    Date: 2015–06
  5. By: Prummer, Anja (Cambridge-INET Institute); Siedlarek, Jan-Peter (Federal Reserve Bank of Cleveland)
    Abstract: We explain persistent differences in cultural traits of immigrant groups with the presence of community leaders. Leaders influence the cultural traits of their community, which have an impact on the group’s earnings. They determine whether a community will be more assimilated and wealthier or less assimilated and poorer. With a leader, cultural integration remains incomplete. The leader chooses more distinctive cultural traits in high-productivity environments and if the community is more connected. Lump-sum transfers to immigrants can hinder cultural integration. These findings are in line with integration patterns of various ethnic and religious groups.
    Keywords: Cultural Integration; Cultural Transmission; Leadership; Immigrants; Labor Market Outcomes; Social Influence; Networks
    JEL: D02 J15 Z10
    Date: 2015–10–09
  6. By: Tatiana Damjanovic; Geethanjali Selvaretnam
    Abstract: We put forward a theoretical growth model where the degree of gender equality evolves towards the value maximising social output. It follows that a womans bargaining power positively depends on her relative productivity. When an economy is less developed, physical strength is quite important for production and therefore the total output is bigger when the man has larger share of the reward. As society develops and accumulates physical and human capital, the woman becomes more productive, which drives social norms towards gender equality. By endogenising gender balance of power we can explain why it di¤ers across societies and how it evolves over the time.
    Keywords: gender inequality, economic growth, female bargaining power, human capital, natural resources
    JEL: C72 C73 D13 J16 O41 O43
    Date: 2015–10

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