nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2018‒01‒08
four papers chosen by
Matthew Baker
City University of New York

  1. Creating an Efficient Culture of Cooperation By Fehr, Ernst; Williams, Tony
  2. Why have only humans and social insects evolved a complex division of labor By Ugo Pagano
  3. From Cashews to Nudges: The Evolution of Behavioral Economics By Thaler, Richard H.
  4. Behavioral Inattention By Xavier Gabaix

  1. By: Fehr, Ernst (University of Zurich); Williams, Tony (University of Zurich)
    Abstract: Throughout human history, informal sanctions by peers were ubiquitous and played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of evidence suggests that informal peer sanctions cause large collateral damage and efficiency costs. This raises the question whether peer sanctioning systems exist that avoid these costs and whether other, more centralized, punishment systems are superior and will be preferred by the people. Here, we show that efficient peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior. We also show that subjects universally reject peer sanctioning without a norm consensus opportunity – an institution that has hitherto dominated research in this field – in favor of our efficient peer sanctioning institution or an equally efficient institution where they delegate the power to sanction to an elected judge. Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects' cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision.
    Keywords: endogenous institutions, punishment, cooperation, public goods
    JEL: D02 D03 D72 H41
    Date: 2017–11
  2. By: Ugo Pagano
    Abstract: Social species, those that have a complex division of labor, comprise about two thirds of the earth’s biomass. These social species – humans and social insects – are located at extreme points of the set of possible evolutionary paths. The queens of small social insects produce thousands of small larvae, whereas human females invest heavily in their children, who are born already with a very large brain. In spite of these and many other evident differences, social insects and humans have conquered the earth because they share two characteristics: a highly developed system of social cooperation, and a complex division of labor. These observations prompt two questions: If there are evident evolutionary advantages of cooperation and specialization, why have only few species been able to increase their fitness in this way? Why have these characteristics emerged as such extremely different forms of life? In order to answer these two questions, we will focus on possible “transition societies” in the evolutionary paths towards social species. We will argue that, in both the human and social insect cases, sexual selection had a crucial role in the development of the division of labor and entailed that the division of labor required either minimum or maximum unitary investments in the offspring. The species located in between these two extremes could not exploit the advantages of specialization.
    Keywords: division of labor, evolution, social insects, human capabilities
    JEL: N10 B00 Z13 D83 D87
    Date: 2017–12
  3. By: Thaler, Richard H. (University of Chicago)
    Abstract: Richard H. Thaler delivered his Prize Lecture on 8 December 20167 at the Aula Magna, Stockholm University.
    Keywords: Behavioral economics;
    JEL: D03 D90 G02
    Date: 2017–12–08
  4. By: Xavier Gabaix
    Abstract: Inattention is a central, unifying theme for much of behavioral economics. It permeates such disparate fields as microeconomics, macroeconomics, finance, public economics, and industrial organization. It enables us to think in a rather consistent way about behavioral biases, speculate about their origins, and trace out their implications for market outcomes. This survey first discusses the most basic models of attention, using a fairly unified framework. Then, it discusses the methods used to measure attention, which present a number of challenges on which much progress has been done. It then examines the various theories of attention, both behavioral and more Bayesian. It finally discusses some applications. For instance, inattention offers a way to write a behavioral version of basic microeconomics, as in consumer theory, producer theory, and Arrow-Debreu. A last section is devoted to open questions in the attention literature. This chapter is a pedagogical guide to the literature on attention. Derivations are self-contained.
    JEL: D03 D11 D51 G02 H2
    Date: 2017–12

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