nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2019‒04‒15
seven papers chosen by
Matthew Baker
City University of New York

  1. Risk-averse and self-interested shifts in groups in both median and random rules By Yoshio Kamijo; Teruyuki Tamura
  2. On the economic importance of the determinants of long-term growth By Olivier Sterck
  3. Optimal Prosocial Nudging By Carlsson, Fredrik; Johansson-Stenman, Olof
  4. Beliefs and Endogenous Cognitive Levels: An Experimental Study By Marina Agranov; Elizabeth Potamites; Andrew Schotter; Chloe Tergiman
  5. Partial norms By Giovanna D'Adda; Martin Dufwenberg; Francesco Passarelli; Guido Tabellini
  6. Prudent case-based prediction when experience is lacking By Patrick H. O'Callaghan
  7. Learning to cooperate in the shadow of the law By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet

  1. By: Yoshio Kamijo (School of Economics and Management, Kochi University of Technology); Teruyuki Tamura (Department of Management, Kyoto College of Economics)
    Abstract: This study examines whether attitudes toward risk and altruism are affected by being in a group or being alone. Differing from previous economic studies of group decision-making, we attempt to exclude the effects of group informal discussion, which are thought to be a black box when individuals make decisions in a group. Subjects in our experiment were requested only to show their faces to other members without any further communication. Moreover, we adopted two collective decision rules—namely, the median rule and the random rule—which provide the truth-telling mechanism. In experiments of both anonymous investments and donations, we found that subjects who made decisions in a group offered significantly lower amounts than individuals who made decisions alone, even controlling for individuals’ risk and altruistic preferences. Our results indicate that people are more risk averse and self-interested when they are in a group regardless of which collective decision rules are adopted.
    Keywords: Group decision, Individual decision, Altruism, Decision under risk
    JEL: C91 C92 D81
    Date: 2019–04
  2. By: Olivier Sterck
    Abstract: The economic literature has identified dozens of statistically significant determinants of long-run growth, from malaria ecology and ruggedness to genetic diversity and the timing of the Neolithic transition. Yet, the economic importance of these factors - understood as their contribution to variation in current GDP per capita - is unknown. In this paper, I propose two complementary approaches to measure economic importance, and apply these methods to assess the importance of the determinants of longrun growth. I find that distance to coast, malaria ecology, and legal origins are the three most important factors explaining contemporary development, ceteris paribus. Temperature, the share of the population from European descent, and the timing of the Neolithic transition are also important. In comparison, ruggedness, genetic diversity, slave trade intensity, and ethnolinguistic fragmentation appear to be relatively unimportant. The effects of malaria ecology, of temperature, of the share of the population from European descent, and of the timing of the Neolithic transition are mutually reinforcing.
    Keywords: Economic importance; Effect size; Long-run growth
    JEL: O1 O4 B4
    Date: 2018
  3. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: While nudges are still mostly associated with affecting individual choices for their own long-run interest, i.e. dealing with internalities, they are increasingly used in order to reduce externalities, such as environmental consequences. While we are gaining increasing insights into when and how nudges work, much less attention has been given to the normative aspects of nudging as a policy instrument to deal with externalities. We investigate optimal prosocial nudging under a number of different settings in a world where a conventional Pigovian tax can be used to a varying extent. We find that nudges typically only play a limited role when optimal taxes can be implemented. What we denote encouraging moral nudges, i.e. nudges where people’s choices are affected by strengthening consumers’ moral norms for doing the right thing, are more likely to play a role even when the tax is optimal compared to purely cognitive nudges. In addition, if a nudge better can target the right consumers, then it might also be optimal to use even when an optimal tax can be implemented. We also present decision rules for the optimal size of a nudge when an optimal tax cannot be implemented.
    Keywords: nudge; environmental policy; behavior
    JEL: D90 H21 H23
    Date: 2019–04
  4. By: Marina Agranov; Elizabeth Potamites; Andrew Schotter; Chloe Tergiman
    Abstract: Uses a laboratory setting to manipulate our subjectsʼ beliefs about the cognitive levels of the players they are playing against. We show that in the context of the 2/3 guessing game, individual choices crucially depend on their beliefs about the level of others.
    Keywords: Guessing game , Beliefs , Level-k theory
    JEL: I
  5. By: Giovanna D'Adda; Martin Dufwenberg; Francesco Passarelli; Guido Tabellini
    Abstract: We consider an expanded notion of social norms that renders them belief-dependent and partial, formulate a series of related testable predictions, and design an experiment based on a variant of the dictator game that tests for empirical relevance. Main results: Normative beliefs influence generosity, as predicted. Degree of partiality leads to more dispersion in giving behavior, as predicted.
    Keywords: social norms, partial norms, normative expectations, consensus, experiment
    JEL: C91 D91
    Date: 2019
  6. By: Patrick H. O'Callaghan
    Abstract: An inexperienced predictor is asked to qualitatively rank eventualities according to their plausibility, given past cases. Inexperience means that, resampling past cases (with replacement) fails to generate a suitably diverse set of rankings. (4-diversity requires that each of the 4! strict rankings of four eventualities arises for some sample.) Along with other essential consistency requirements, 4-diversity yields a matrix representation that may be viewed as an empirical likelihood function (Gilboa and Schmeidler, 2003). We impose 2-diversity and derive a similar representation: provided the predictor is prudent enough to ensure that the arrival of novel cases will not force her into being dogmatic, intransitive or into revising her existing rankings. We build on this to establish a formal tradeoff between inexperience and the cognitive or computational cost of more abstract resampling.
    Date: 2019–04
  7. By: Roberto Galbiati (Département d'économie); Emeric Henry (Département d'économie); Nicolas Jacquemet (Centre d'économie de la Sorbonne (CNRS/UP 1))
    Abstract: How does the exposure to past institutions affect current cooperation? While a growing literature focuses on behavioral channels, we show how cooperation-enforcing institutions affect rational learning about the group’s value. Strong institutions, by inducing members to cooperate, may hinder learning about intrinsic values in the group. We show, using a lab experiment with independent interactions and random rematching, that participants behave in accordance with a learning model, and in particular react differently to actions of past partners whether they were played in an environment with coercive enforcement or not.
    Keywords: Enforcement; Social values; Cooperation; Learning spillovers; Persistence of institutions; Repeated games; Experiments
    JEL: C91 C73 D02 K49 P16 Z1
    Date: 2019–04

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