nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2016‒08‒07
five papers chosen by
Matthew Baker
City University of New York

  1. Competition between Firms in Economic Evolution: Its Characteristics and Differences to the Biological Sphere By Su, Tong-Yaa
  2. Culture and Institutions By Alesina, Alberto Francesco; Giuliano, Paola
  3. Does Experience Affect Fairness and Reciprocity in Lab Experiments? By Tiziana Medda; Vittorio Pelligra; Tommaso Reggiani
  4. Does Empathy Beget Guile? Experimental Evidence By Chen, Daniel L.
  5. Stochastic choice, systematic mistakes and preference estimation By Breitmoser, Yves

  1. By: Su, Tong-Yaa
    Abstract: This paper investigates the characteristics of competition among firms from an evolutionary perspective. It develops a coherent approach to economic competition that incorporates two kinds of evolutionary concepts currently used and emerging at the intersection of social sciences, including economics, and biology: Darwinian thinking as well as the naturalistic approach. Inspired by evolutionary theory, the intersection commonly captures concepts that make metaphorical use of Darwinian ideas – these concepts draw on an analogy construction to the biological sphere. As a result in this paper, different characteristics of economic competition may be analogically described by different forms of biological selection, e.g., genetic group selection. However, selection processes do not only act on genes, but also on culture. By considering the naturalistic approach, differences to the biological sphere are revealed. The crux of this paper is the deduction that competition between firms is a form of cultural group selection in economic evolution.
    Keywords: Competition; Evolutionary Theory; Selection Processes; Continuity Hypothesis
    JEL: B52 D49
    Date: 2016–01–12
  2. By: Alesina, Alberto Francesco; Giuliano, Paola
    Abstract: A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We review work with a theoretical, empirical, and historical bent to assess the presence of a two-way causal effect between culture and institutions.
    Date: 2015
  3. By: Tiziana Medda (University of Cagliari); Vittorio Pelligra (University of Cagliari); Tommaso Reggiani (LUMSA University)
    Abstract: One of the most common criticisms about the external validity of lab experiments in economics concerns the representativeness of participants usually considered in these studies. The ever-increasing number of experiments and the prevalent location of research centers in university campuses produced a peculiar category of subjects: Students with high level of laboratory experience built through repeated participations in experimental sessions. We investigate whether the experience accumulated in this way biases subjects’ behaviour in a set of simple games widely used to study social preferences (Dictator Game, Ultimatum Game, Trust Game, and Prisoner’s Dilemma Game). Our main finding shows that subjects with a high level of experience in lab experiments do not behave in a significantly different way from novices.
    Keywords: Experimental Methodology, External Validity, Experience, Lab Experiment
    JEL: D03 D83 C91 C92
    Date: 2016–07
  4. By: Chen, Daniel L.
    Abstract: Some theories about the positive impact of markets on morality suggest that competition increases empathy, not between competitors, but between them and third parties. However, empathy may be a necessary evolutionary antecedent to guile, which is when someone knows what the other person wants and intentionally deceives him or her, and deception may have evolved as a means of exploiting empathy. This paper examines how individuals primed for empathy behave towards third parties in a simple economic game of deception. It reports the results of a data entry experiment in an online labor market. Individuals enter data randomized to be a prime for empathy, for guile, or a control. Empathy is then measured using a Reading the Mind in the Eyes Test and guile is measured using a simple economic game. Individuals primed for empathy become less deceptive towards third parties. Individuals primed for guile become less likely to perceive that deceiving an individual is unfair in a vignette. These results are robust to a variety of controls and to restricting to workers who entered the prime accurately. These findings are inconsistent with the hypothesis that empathy causes guile and suggests that empathy may cause those who are making judgements to become less deceptive.
    Keywords: Normative Commitments, Other-Regarding Preferences, Empathy, Deception, Guile
    JEL: D03 D64 K00
    Date: 2016–07
  5. By: Breitmoser, Yves
    Abstract: Individual choice exhibits "presentation effects" such as default, ordering and round-number effects. Using existing models, presentation effects bias utility estimates, which suggests instability of preferences and obscures behavioral patterns. This paper derives a generalized model of stochastic choice by weakening logit's axiomatic foundation. Weakening the axioms implies that focality of options is choice-relevant, alongside utility, which entails presentation effects. The model is tested on four well-known studies of dictator games exhibiting typical round-number patterns. The generalized logit model captures the choice patterns reliably, substantially better than existing models: it robustly predicts and controls for the round-number effects, thus provides "clean" utility estimates that are stable and predictive across experiments.
    Keywords: stochastic choice, systematic mistakes, axiomatic foundation, utility estimation, dictator game
    JEL: C10 C90 D03
    Date: 2016–07–28

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