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on Evolutionary Economics |
| By: | David S. Ahn (University of California, Berkeley); Ryota Iijima (Cowles Foundation, Yale University); Todd Sarver (Duke University) |
| Abstract: | We introduce and characterize a recursive model of dynamic choice that accommodates naiveté about present bias. The model incorporates costly self-control in the sense of Gul and Pesendorfer (2001) to overcome the technical hurdles of the Strotz representation. The important novel condition is an axiom for naiveté. We first introduce appropriate definitions of absolute and comparative naiveté for a simple two-period model, and explore their implications for the costly self-control model. We then extend this definition for infinite-horizon environments, and discuss some of the subtleties involved with the extension. Incorporating the definition of absolute naiveté as an axiom, we characterize a recursive representation of naive quasi-hyperbolic discounting with self-control for an individual who is jointly overoptimistic about her present-bias factor and her ability to resist instant gratification. We study the implications of our proposed comparison of naiveté for the parameters of the recursive representation. Finally, we discuss the obstacles that preclude more general notions of naiveté, and illuminate the impossibility of a definition that simultaneously incorporates both random choice and costly self-control. devices. |
| Keywords: | Naive, Sophisticated, Self-control, Quasi-hyperbolic discounting |
| JEL: | D11 D91 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2099&r=evo |
| By: | Kitessa, Rahel Jigi (Tilburg University, Center For Economic Research) |
| Abstract: | The standard economic theory predicts that collective action problem arise because the selfish agents have no incentive to contribute to public goods. However, considerable shares of mankind, conditional cooperators, contribute to public goods as revealed by numerous empirical and experimental findings. Ostrom (2000) revised collective action problems predicts that as time passes with proper social norm institution in place, and information about the types of agent is known, the share of such cooperators will grow in population and the cooperative behavior will be a dominant economic decision. This is because, the conditional cooperators are in general more trusted, whereas, selfish agents are less trusted which enables the cooperators to drive higher payoff. I tested this hypothesis in a setting that let participants who are members of collaborative forest management group (CFM), and non- members (non-CFM) to play a trust game. Using this experiment, the finding in this study support the hypothesis that high trust is placed on the cooperators than non-cooperators. Therefore, the cooperator type receives more money, but send and return less to non-cooperators which allow them to receive consistently higher pay off. |
| Keywords: | collective action; trust and trustworthiness; field experiment; forestry; public goods |
| JEL: | C12 C93 D64 D71 H41 O31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:1c4fc7fc-2e1d-4094-8b85-a95c07cecba6&r=evo |