nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2016‒08‒21
four papers chosen by
Matthew Baker
City University of New York

  1. Continuous time, continuous decision space prisoner’s dilemma: A bridge between game theory and economic GCD-models By Glötzl, Erhard
  2. Dishonesty: From Parents to Children By Anya Samek; Daniel Houser; Joachim Winter; John List; Marco Piovesan
  3. Behavioral economics: Economic Man and Evaluation of the Role of State in this Model By Sheresheva Marina; Kostanyan Ani
  4. The gender gap in mortality: How much is explained by behavior? By Schünemann, Johannes; Strulik, Holger; Trimborn, Timo

  1. By: Glötzl, Erhard
    Abstract: General Constrained Dynamic models (GCD – models) in economics are inspired by classical mechanics with constraints. Most macroeconomic models can be understood as special cases of GCD – models. Moreover, in this paper it will be shown that not only macroeconomic models but also game theoretic models are strongly related to GCD – models. GCD models are characterized by a system of differential equations in continuous time while most game theoretical models are set up in discrete time. Therefore it is necessary to build a bridge from game theoretical models denominated in discrete time to game theoretical models using continuous time. This bridge is illustrated in the following using the example of a continuous time, continuous decision space prisoner’s dilemma. Furthermore, it is shown that the differential equations which determine other continuous game theoretic models can be understood to a certain extent as special cases of the GCD – differential equations. Well known types of continuous game theoretic models include for instance “Evolutionary Game Theory” with the replicator equation, “Adaptive Dynamics” with the canonical equation, which is nothing else than a replicator – mutator equation, and the so called “Differential Games”, which are strongly related to optimal control theory with two controls and two different objectives (goals). Most of the GCD – models are characterised by 3 key feature: - mutual influence, - Power-factors - Constraints Nowak (2006b) and Taylor & Nowak (2007) show that there are five mechanisms which, under certain conditions, can lead to the evolution of cooperation in an iterated prisoner’s dilemma. Inspired by this, we apply the 3 key features of GCD – models to the standard prisoner’s dilemma in discrete time which yields 3 additional mechanisms which enable the evolution of cooperation. The assumption or axiom of the free market economy is that an individual optimisation strategy will lead to an overall optimum by virtue of Adam Smith’s invisible hand. Without additional conditions this assumption alone is fundamentally wrong. As in prisoner’s dilemma also in economics cooperation is essential to get an overall optimum. The big question of political economy is to analyse which additional measures could guarantee that the individual optimisation strategy characterising a free market economy leads to cooperation as precondition to get an overall optimum. From this point of view the different economic theories could be characterised in terms of which measures they assume to be sufficient to guarantee an overall optimum without abandoning the principle of individual optimisation.
    Keywords: economic models, economic GCD-models, continuous Game Theory, Evolutionary Game Theory , Prisoner’s Dilemma, Cooperation, Political Economy
    JEL: B41 C02 C60 C70 C72 E10 E66 P26
    Date: 2016–03–26
  2. By: Anya Samek; Daniel Houser; Joachim Winter; John List; Marco Piovesan
    Abstract: Acts of dishonesty permeate life. Understanding their origins, and what mechanisms help to attenuate such acts is an underexplored area of research. This study takes an economics approach to explore the propensity of individuals to act dishonestly across different contexts. We conduct an experiment that includes both parents and their young children as subjects, exploring the roles of moral cost and scrutiny on dishonest behavior. We find that the highest level of dishonesty occurs in settings where the parent acts alone and the dishonest act benefits the child. In this spirit, there is also an interesting, quite different, effect of children on parents' behavior: parents act more honestly under the scrutiny of daughters than under the scrutiny of sons. This finding sheds new light on the origins of the widely documented gender differences in cheating behavior observed among adults, where a typical result is that females are more honest than males.
    Date: 2015
  3. By: Sheresheva Marina (Department of Economics, Lomonosov Moscow State University); Kostanyan Ani (Department of Economics, Lomonosov Moscow State University)
    Abstract: The article presents an approach to the assessment of the economic man model in the behavioral economics as the one of the latest trends of economic thought development, and discusses the role of state in this model. The evolution of the economic man model is described on the basis of retrospective analysis (from the mercantilism up to the experimental economics). Specific features of human decision-making process in behavioral economics are revealed. A critical view at the phenomenon of paternalism in this framework is given, and the impact of different paternalism types on the human decision-making process in behavioral economics is described.
    Keywords: economic man, behavioral economics, rationality, economic psychology, paternalism.
    JEL: B1 B2
    Date: 2016–08
  4. By: Schünemann, Johannes; Strulik, Holger; Trimborn, Timo
    Abstract: In developed countries, women are expected to live about 4-5 years longer than men. In this paper we develop a novel approach in order to gauge to what extent gender differences in longevity can be attributed to gender-specific preferences and health behavior. For that purpose we set up a physiologically founded model of health deficit accumulation and calibrate it using recent insights from gerontology. From fitting life cycle health expenditure and life expectancy we obtain estimates of the gender-specific preference parameters. We then perform the counterfactual experiment of endowing women with the preferences of men. In our benchmark scenario this reduces the gender gap in life expectancy from 4.6 to 1.4 years. When we add gender-specific preferences for unhealthy consumption, the model can motivate up to 88 percent of the gender gap. Our theory offers also an economic explanation for why the gender gap declines with rising income.
    Keywords: health,aging,longevity,gender-specific preferences,unhealthy behavior
    JEL: D91 J17 J26 I12
    Date: 2016

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