nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2019‒10‒21
five papers chosen by
Matthew Baker
City University of New York

  1. The Stability of Conditional Cooperation: Egoism Trumps Reciprocity in Social Dilemmas By Luciano Andreozzi; Matteo Ploner; Ali Seyhun Saral
  2. Why Variable-Population Social Orderings Cannot Escape the Repugnant Conclusion: Proofs and Implications By Spears, Dean; Budolfson, Mark
  3. Measuring the Completeness of Theories By Drew Fudenberg; Jon Kleinberg; Annie Liang; Sendhil Mullainathan
  4. Pure rank preferences and variation in risk-taking behavior By Stark, Oded; Budzinski, Wiktor; Jakubek, Marcin
  5. Rational hyperbolic discounting By Jos\'e Cl\'audio do Nascimento

  1. By: Luciano Andreozzi (Department of Economics, University of Trento); Matteo Ploner (Department of Economics, University of Trento); Ali Seyhun Saral (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: An often-replicated result in the experimental literature on social dilemmas is that a large share of subjects reveal conditionally cooperative preferences. Cooperation generated by this type of preferences is notoriously unstable, as individuals reduce their contributions to the public good in reaction to other subjects free-riding. This has led to the widely-shared conclusion that cooperation observed in experiments (and its collapse) is mostly driven by imperfect reciprocity. In this study, we explore the possibility that reciprocally cooperative preferences may themselves be unstable. We do so by observing the evolution of subjects’ preferences in an anonymously repeated social dilemma. Our results show that a significant fraction of reciprocally cooperative subjects become selfish in the course of the experiment, while the reverse is rarely observed. We are thus driven to the conclusion that egoism is more resistant to exposure to social dilemmas than reciprocity.
    Keywords: reciprocity, conditional cooperation, strategy method
    JEL: C72 C91
    Date: 2019–10
  2. By: Spears, Dean (University of Texas at Austin); Budolfson, Mark (University of Vermont)
    Abstract: The population literature in theoretical economics has long focused on attempts to avoid the repugnant conclusion. We advance the literature by proving that no social ordering in population economics can escape the repugnant conclusion in all instances. As we show, prior results depend on a formal definition of the repugnant conclusion that artificially excludes some repugnant cases. In particular, the literature traditionally formalizes the repugnant conclusion to exclude cases that include an unaffected subpopulation. We relax this normatively irrelevant exclusion, and others. We prove that any candidate social ordering that satisfies either a basic axiom of Aggregation or Non-Aggregation implies some instance of the repugnant conclusion. Therefore, the repugnant conclusion provides no methodological guidance for theory or policymaking, because it cannot discriminate among candidate social orderings. This result is of practical importance because evaluation of important climate or development policies depends on comparing social welfare across populations of differing sizes.
    Keywords: population economics, population ethics, repugnant conclusion, RDGU, CLGU, separability
    JEL: J10 J13 J18 D63
    Date: 2019–10
  3. By: Drew Fudenberg; Jon Kleinberg; Annie Liang; Sendhil Mullainathan
    Abstract: We use machine learning to provide a tractable measure of the amount of predictable variation in the data that a theory captures, which we call its "completeness." We apply this measure to three problems: assigning certain equivalents to lotteries, initial play in games, and human generation of random sequences. We discover considerable variation in the completeness of existing models, which sheds light on whether to focus on developing better models with the same features or instead to look for new features that will improve predictions. We also illustrate how and why completeness varies with the experiments considered, which highlights the role played in choosing which experiments to run.
    Date: 2019–10
  4. By: Stark, Oded; Budzinski, Wiktor; Jakubek, Marcin
    Abstract: Assuming that an individual's rank in the wealth distribution is the only factor determining the individual's wellbeing, we analyze the individual's risk preferences in relation to gaining or losing rank, rather than the individual's risk preferences towards gaining or losing absolute wealth. We show that in this characterization of preferences, a high-ranked individual is more willing than a low-ranked individual to take risks that can provide him with a rise in rank: relative risk aversion with respect to rank in the wealth distribution is a decreasing function of rank. This result is robust to incorporating (the level of) absolute wealth in the individual's utility function.
    Keywords: Rank in the wealth distribution,Rank-based utility,Variation in risk-takingbehavior,Relative risk aversion
    JEL: D01 D31 D81 G32
    Date: 2019
  5. By: Jos\'e Cl\'audio do Nascimento
    Abstract: This paper shows that the $q$-exponential function rationally evaluate the time discounting. When we consider two processes of wealth accumulation with different frequencies, then the discount rate and the relative frequency between them are essentials to choose the best process. In this context, the exponential discounting is a particular case, where one of the processes has a much higher frequency related to the other. In addition, one can note that some behaviors observed empirically in decision makers, such as subadditivity, magnitude effect, and preference reversal, are consistent with processes which have a low relative frequency.
    Date: 2019–10

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