nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2016‒09‒04
nine papers chosen by
Matthew Baker
City University of New York

  1. Coevolution of cooperation, preferences, and cooperative signals in social dilemmas By Müller, Stephan; von Wangenheim, Georg
  2. On the Origins to Dishonesty: from Parents to Children By Anya Samek; Daniel Houser; Joachim Winter; John List; Marco Piovesan
  3. Spatial and social distance in the fertility transition: Sweden 1880-1900 By Sebastian Klüsener; Martin Dribe; Francesco Scalone
  4. The Rapid Evolution of Homo Economicus: Brief Exposure to Neoclassical Assumptions Increases Self-Interested Behavior By Ifcher, John; Zarghamee, Homa
  5. Are groups 'less behavioral'? The case of anchoring By Meub, Lukas; Proeger, Till
  6. A Theory of Community Formation and Social Hierarchy By Susan Athey; Emilio Calvano; Saumitra Jha
  7. Networks: An Economic Perspective By Matthew O. Jackson; Brian W. Rogers; Yves Zenou
  8. Principles of (Behavioral) Economics By David Laibson; John List
  9. Institutions Without Culture. A Critique of Acemoglu and Robinson's Theory of Economic Development By Joanna Dzionek-Kozlowska; Rafal Matera

  1. By: Müller, Stephan; von Wangenheim, Georg
    Abstract: We study the coevolution of cooperation, preferences and cooperative signals in an environment where individuals engage in a signaling-extended prisoner's dilemma. We identify a new type of evolutionary equilibrium - a transitional equilibrium - which is constituted and stabilized by the dynamic interaction of multiple Bayesian equilibria. A transitional equilibrium: (1) exists under mild conditions, and (2) can stabilize a population that is characterized by the heterogeneity of behavior, preferences, and signaling. We thereby offer an explanation for persistent regularities observed in laboratory and field data on cooperative behavior. Furthermore, this type of equilibria is least demanding with respect to differences in signaling costs between 'conditional cooperators' and 'opportunists.' Indeed, and quite surprisingly, a transitional equilibrium is consistent with 'conditional cooperators' bearing higher signaling cost in terms of fitness than 'opportunists.'
    Keywords: evolutionary game theory,cooperation,signaling
    JEL: C73 D64 D82
    Date: 2016
  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 under explored area of research. This study takes an economics approach to explore the propensity of individuals to act dishonestly across different economic environments. We begin by developing a simple model that highlights the channels through which one can increase or decrease dishonest acts. We lend empirical insights into this model by using an experiment that includes both parents and their young children as subjects. We find that the highest level of dishonesty occurs in settings where the parent acts alone and the dishonest act benefits the child rather than the parent. In this spirit, there is also an interesting effect of children on parents' behavior: in the child's presence, parents act more honestly, but there are gender differences. Parents act more dishonestly in front of sons than daughters. This finding has the potential of shedding light on the origins of the widely documented gender differences in cheating behavior observed among adults.
    Date: 2015
  3. By: Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Martin Dribe; Francesco Scalone
    Abstract: Most existing studies on the fertility transition focus either on macro-level trends or on micro-level patterns with limited geographic scope. Much less attention has been given to the interplay between individual characteristics and contextual conditions, including geographic location. This paper contributes to closing this research gap. We investigate the relevance of geography and socioeconomic status (SES) for understanding fertility variation in the initial phase of the fertility decline in Sweden. Spatially-sensitive multi-level analyses are applied to study fertility trends by SES and parish, using full-count individual-level census data for 1880, 1890, and 1900. Our results show that the elite not only constituted the vanguard group in the fertility decline, but that the shift in fertility behavior occurred quickly among this social class in virtually all parts of Sweden. Other social classes experienced the decline with some delay in both central and peripheral areas, and their patterns of decline were more clustered in and around the early centers of the decline compared to the pattern of the elite. Long-distance migrants, who were disproportionately represented among the elite and who initially had higher fertility, were among the pioneers in the process. This suggests that factors such as social connectedness through space and local social embeddedness were important in determining the early adoption of changes in fertility behavior. Our results confirm the view that social status and social class boundaries were of considerable relevance in structuring the fertility transition. The importance of space for understanding variation in the fertility decline seems to be negatively correlated with social status, with the pattern of decline among the elite showing the lowest degree of spatial variation.
    Keywords: Sweden, fertility decline, geography, social classes, spatial analysis
    JEL: J1 Z0
    Date: 2016–08
  4. By: Ifcher, John (Santa Clara University); Zarghamee, Homa (Barnard College)
    Abstract: Economics students have been shown to exhibit more selfishness than other students. Because the literature identifies the impact of long-term exposure to economics instruction (e.g., taking a course), it cannot isolate the specific course content responsible; nor can selection, peer effects, or other confounds be properly controlled for. In a laboratory experiment, we use a within- and across-subject design to identify the impact of brief, randomly-assigned economics lessons on behavior in games often used to measure selfishness: the ultimatum game (UG), dictator game (DG), prisoner's dilemma (PD), and public-goods game (PGG). We find that a brief lesson that includes the assumptions of self-interest and strategic considerations moves behavior toward traditional economic rationality in UG, PD, and DG. Despite entering the study with higher levels of selfishness than others, subjects with prior exposure to economics instruction have similar training effects. We show that the lesson reduces efficiency and increases inequity in the UG. The results demonstrate that even brief exposure to commonplace neoclassical economics assumptions measurably moves behavior toward self-interest.
    Keywords: economics instruction, self-interest, game theory, laboratory experiment, social preferences
    JEL: A2 D6 C9 C7 A1
    Date: 2016–08
  5. By: Meub, Lukas; Proeger, Till
    Abstract: Economic small group research points to groups as more rational decision-makers in numerous economic situations. However, no attempts have been made to investigate whether groups are affected similarly by behavioral biases that are pervasive for individuals. If groups were also able to more effectively avoid these biases, the relevance of biases in actual economic contexts dominated by group decision-making might be questioned. We consider the case of anchoring as a prime example of a well-established, robust bias. Individual and group biasedness in three economically relevant domains are compared: factual knowledge, probability estimates and price valuations. In contrast to previous anchoring studies, we find groups to successfully reduce, albeit not eliminate, anchoring in the factual knowledge domain. For the other two domains, groups and individuals are equally biased by external anchors. Group cooperation thus reduces biases for predominantly intellective tasks only, while no such reduction is achieved when judgmental aspects are involved.
    Keywords: anchoring bias,group decision-making,heuristics and biases,incentives,laboratory experiment
    JEL: C91 C92 D8
    Date: 2016
  6. By: Susan Athey (Stanford GSB); Emilio Calvano (Università di Bologna and CSEF); Saumitra Jha (Stanford GSB)
    Abstract: We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups – communities - that allow repeated interaction. Hierarchies provide incentives for loyalty and allow individuals to trust agents to extent that the agents are actually trustworthy. We contrast these with other plausible institutions for engendering loyalty that require inefficient withholding of trust to support group norms, and are not robust to coalitional deviations. In communities whose members randomly match, we show that social mobility within hierarchies falls as temptations to cheat rise. In communities where individuals can concentrate their trading with pre-selected members, hierarchies where senior members are favored for trade sustain trust even in the presence of proximate non-hierarchical communities. We link these results to the emergence of trust in new market environments and early human societies
    Date: 2016–08–26
  7. By: Matthew O. Jackson; Brian W. Rogers; Yves Zenou
    Abstract: We discuss social network analysis from the perspective of economics. We organize the presentaion around the theme of externalities: the effects that one's behavior has on others' well-being. Externalities underlie the interdependencies that make networks interesting. We discuss network formation, as well as interactions between peoples' behaviors within a given network, and the implications in a variety of settings. Finally, we highlight some empirical challenges inherent in the statistical analysis of network-based data.
    Date: 2016–08
  8. By: David Laibson; John List
    Abstract: There are many great ways to incorporate behavioral economics in a first-year undergraduate economics class-i.e., the course that is typically called "Principles of Economics." Our preferred approach integrates behavioral economics throughout the course (e.g., see Acemoglu, Laibson, and List 2015). With the integrated approach, behavioral content plays a role in many of the chapters of the principles of economics curriculum, including chapters on optimization, equilibrium, game theory, intertemporal choice, probability and risk, social preferences, household finance, the labor market, financial intermediation, monetary policy, economic fluctuations, and financial crises. We prefer the integrated approach because it enables the behavioral insights to show up where they are conceptually most relevant. By illustration, it is best to combine a discussion of downward nominal wage rigidity (i.e., the idea that workers strongly resist nominal wage declines) with the overall discussion of the labor market. Whether or not an instructor integrates behavioral economics throughout the principles of economics course, it makes sense to pull central materials together and dedicate a lecture (or more) to a focused discussion of behavioral economics. This note describes our approach to such a lecture, emphasizing six key principles of behavioral economics. Our choice of content for a behavioral lecture is motivated by three factors. First, we include ideas that are conceptually important. Second, we include material that is practically important and personally relevant to our students-we have found that such content resonates long after the course ends. Third, we include content that relates to what has been (or will be) taught in the rest of the course, and therefore serves as a complement. We want students to see that behavioral economics is an integrated part of economics, not a freak show that is isolated from "the standard ingredients" in the rest of the economics course. This paper summarizes our approach to such a focused behavioral lecture. In Section I, we define behavioral economics and place it in historical context. In Section II, we introduce six modular principles that can be used to teach behavioral economics. We provide PowerPoint notes on our home pages, which instructors should feel free to edit and use.
    Date: 2015
  9. By: Joanna Dzionek-Kozlowska (Institute of Economics, Department of History of Economic Thought and Economic History, University of Lodz); Rafal Matera (Institute of Economics, Department of History of Economic Thought and Economic History, University of Lodz)
    Abstract: Acemoglu and Robinson’s theory presented in their famous Why Nations Fail, and other papers, should be placed among the institutional theories of economic development. Yet the problem is they strongly differentiate their concept from the so-called culture hypothesis, which they reject. This stance is difficult to accept, not only because of the significance of culture-related factors of economic development, but it is also difficult to reconcile with their own model. The aim of this paper is to demonstrate that such a strong rejection of the culture hypothesis is inconsistent with their own analysis, triggers some principal problems with understanding the basic notion of institution, and suggests Acemoglu and Robinson are only focused on considering formal institutions. The article concludes with the statement that, paradoxically, Acemoglu and Robinson’s unconvincing rejection of the culture hypothesis may be regarded as a justification of the importance of culture-related factors.
    Keywords: Institutional Economics, Daron Acemoglu, James Robinson, Institutions vs Culture Controversy, Economic Development
    JEL: B52 O10 Z10
    Date: 2016–08

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