nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2017‒11‒05
five papers chosen by
Matthew Baker
City University of New York

  1. (Un-)Stable Preferences, Beliefs, and the Predictability of Behaviour By Wolff, Irenaeus
  2. Global Evidence on Economic Preferences By Armin Falk; Anke Becker; Thomas Dohmen; Benjamin Enke; David B. Huffman; Uwe Sunde
  3. Trusting versus Monitoring: An Institutional Choice Experiment By Andrej Angelovski; Daniela Di Cagno; Werner Güth; Daniela Grieco
  4. The Limits to Moral Erosion in Markets: Social Norms and the Replacement Excuse By Björn Bartling; Yagiz Özdemir
  5. The Importance of Peers for Compliance with Norms of Fair Sharing By Simon Gaechter; Leonie Gerhards; Daniele Nosenzo

  1. By: Wolff, Irenaeus
    Abstract: I show that whether participants generally believe in others’ preference stability is a crucial determinant of behaviour. Whether a participant’s behaviour can be predicted by her best-response or a Nash-equilibrium in a context where she can observe others' elicited preferences depends heavily both on the participant having stable preferences and on her generally believing in others’ preference stability. The latter is true because such a belief is associated with less dispersed beliefs.
    JEL: C72
    Date: 2017
  2. By: Armin Falk; Anke Becker; Thomas Dohmen; Benjamin Enke; David B. Huffman; Uwe Sunde
    Abstract: This paper studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey dataset of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 individuals in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and bio-geographic and cultural variables such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors. Within countries and subnational regions, preferences are linked to individual savings decisions, labor market choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts.
    JEL: D0 D03 D9
    Date: 2017–10
  3. By: Andrej Angelovski (LUISS Guido Carli, Rome); Daniela Di Cagno (LUISS Guido Carli, Rome); Werner Güth (Luiss Guido Carli, Rome; Frankfurt School of Finance and Management, Frankfurt; Max Planck Institute on Collective Goods, Bonn); Daniela Grieco (Università Bocconi)
    Abstract: To shed light on the choice between trusting a partner versus monitoring her, we let one party decide between two stylized game paradigms—namely, the Ultimatum Game and the Yes–No Game. While in Ultimatum Games responders monitor the allocation proposal, in Yes–No Games, responders react without monitoring. Since monitoring can be costly, we allow the shared amount in Yes–No Games to be larger than that in Ultimatum Games. Experimental conditions can vary the monitoring cost, who decides between trusting and monitoring (i.e., proposer or responder), and whether the responder’s conflict payoff will be negative or positive. The latter brings about Yes–No Game (i.e., trusting) social dilemma situations. We question whether some responders opt for trusting and predominantly accept an unknown offer, especially when justified by efficiency concerns, and whether some proposers, due to behavioral concerns, are more inclined to suggest monitoring.
    Keywords: Trust, Monitoring, Institutional Choice, Ultimatum Game, Yes No Game
    JEL: C91 C72 C73
    Date: 2017–08
  4. By: Björn Bartling; Yagiz Özdemir
    Abstract: This paper studies the impact of a key feature of competitive markets on moral behavior: the possibility that a competitor will step in and conclude the deal if a conscientious market actor forgoes a profitable business opportunity for ethical reasons. We study experimentally whether people employ the argument “if I don’t do it, someone else will” to justify taking a narrowly self-interested action. Our data reveal a clear pattern. Subjects do not employ the “replacement excuse” if a social norm exists that classifies the selfish action as immoral. But if no social norm exists, subjects are more inclined to take a selfish action in situations where another subject can otherwise take it. By demonstrating the importance of social norms of moral behavior for limiting the power of the replacement excuse, our paper informs the long-standing debate on the effect of markets on morals.
    Keywords: replacement excuse, social norms, moral behavior, competition, markets, utilitarianism, deontological ethics
    JEL: C92 D02 D63
    Date: 2017
  5. By: Simon Gaechter; Leonie Gerhards; Daniele Nosenzo
    Abstract: A burgeoning literature in economics has started examining the role of social norms in explaining economic behavior. Surprisingly, the vast majority of this literature has studied social norms in asocial decision settings, where individuals are observed to act in isolation from each other. In this paper we use a large-scale dictator game experiment (N = 850) to show that “peers†can have a profound influence on individuals’ perceptions of norms of fair sharing, which we elicit in an incentive compatible way. However, in contrast to these strong peer effects in social norms of fair sharing, we find limited evidence of the influence of norms and peers on actual sharing behavior. We discuss how these results can be explained by heterogeneity in normative views as well as in willingness to comply with norms.
    Keywords: social norms, norm compliance, peer effects, fair sharing, dictator game, framing, experiments
    JEL: A13 C92 D03
    Date: 2017

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