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on Evolutionary Economics |
| By: | Becker, Anke (University of Bonn); Enke, Benjamin (University of Bonn); Falk, Armin (briq, University of Bonn) |
| Abstract: | Variation in economic preferences is systematically related to both individual and aggregate economic outcomes, yet little is known about the origins of the worldwide preference variation. This paper uses globally representative data on risk aversion, time preference, altruism, positive reciprocity, negative reciprocity, and trust to uncover that contemporary preference heterogeneity has its roots in the structure of the temporally distant migration patterns of our very early ancestors: In dyadic regressions, differences in preferences between populations are significantly increasing in the length of time elapsed since the ancestors of the respective groups broke apart from each other. To document this pattern, we link genetic and linguistic distance measures to population-level preference differences (i) in a wide range of cross-country regressions, (ii) in within-country analyses across groups of migrants, and (iii) in analyses that leverage variation across linguistic groups. While temporal distance drives differences in all preferences, the patterns are strongest for risk aversion and prosocial traits. |
| Keywords: | risk preferences, time preferences, social preferences, origins of preferences |
| JEL: | D01 D03 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13052&r=all |
| By: | Jos\'e Moran; Antoine Fosset; Davide Luzzati; Jean-Philippe Bouchaud; Michael Benzaquen |
| Abstract: | Historically, rational choice theory has focused on the utility maximization principle to describe how individuals make choices. In reality, there is a computational cost related to exploring the universe of available choices and it is often not clear whether we are truly maximizing an underlying utility function. In particular, memory effects and habit formation may dominate over utility maximisation. We propose a stylized model with a history-dependent utility function where the utility associated to each choice is increased when that choice has been made in the past, with a certain decaying memory kernel. We show that self-reinforcing effects can cause the agent to get stuck with a choice by sheer force of habit. We discuss the special nature of the transition between free exploration of the space of choice and self-trapping. We find in particular that the trapping time distribution is precisely a Zipf law at the transition, and that the self-trapped phase exhibits super-aging behaviour. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2003.13660&r=all |
| By: | Yan Chen; Peter Cramton; John A. List; Axel Ockenfels |
| Abstract: | We review past research and discuss future directions on how the vibrant research areas of market design and behavioral economics have influenced and will continue to impact the science and practice of management in both the private and public sectors. Using examples from various auction markets, reputation and feedback systems in online markets, matching markets in education, and labor markets, we demonstrate that combining market design theory, behavioral insights, and experimental methods can lead to fruitful implementation of superior market designs in practice. |
| JEL: | C91 C93 D4 D47 D9 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26873&r=all |
| By: | Breig, Zachary (University of Queensland); Gibson, Matthew (Williams College); Shrader, Jeffrey G. (Columbia University) |
| Abstract: | Research has shown that procrastination has signicant adverse effects on individuals, including lower savings and poorer health. Procrastination is typically modeled as resulting from present bias. In this paper we study an alternative: excessively optimistic beliefs about future demands on an individual's time. The models can be distinguished by how individuals respond to information on their past choices. Experimental results refute the hypothesis that present bias is the sole source of dynamic inconsistency, but they are consistent with optimism. These findings offer an explanation for low takeup of commitment and suggest that personalized information on past choices can mitigate procrastination. |
| Keywords: | discounting, beliefs, dynamic inconsistency, real effort |
| JEL: | D90 D84 J22 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13060&r=all |
| By: | Toke Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Lars Gårn Hansen (Department of Food and Resource Economics, University of Copenhagen); Erik Wengström (Department of Economics, Lund University; Department of Finance and Economics, Hanken School of Economics, Helsinki) |
| Abstract: | In many situations, social norms govern behavior. While the existence of a norm may be clear to someone entering the situation, it is often less clear precisely what behavior is required in order to comply with the norm. We investigate how people react to uncertainty about the prevailing norm using a modified version of the dictator game. Since the behavioral effects of social norms are tightly linked to the degree of anonymity in a situation, we also vary the extent to which subjects’ behavior is observable. We find that when behavior is anonymous, uncertainty about which norm guides partners reduces aggregate norm compliance. However, when others can observe behavior, introducing a small degree of norm uncertainty increases aggregate norm compliance. This implies that norm uncertainty may actually facilitate interaction as long as behavior is observable and uncertainty is sufficiently small. We also document that reactions to norm uncertainty are heterogeneous with one group of people reacting to norm uncertainty by increasing compliance (over-compliers), while another group reacts by reducing compliance (under-compliers). The main effect of increased observability operates through the intensive margin of the under-compliers; they reduce their negative reaction to norm uncertainty when their actions become more visible. |
| Keywords: | Social norms, Uncertainty, Audience |
| JEL: | C92 D9 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:foi:wpaper:2020_04&r=all |
| By: | Sengupta, Atanu; Hazra, Anirban |
| Abstract: | The spikes of sun give us a beautiful aura during solar eclipse. The spikes of a virus are the humanity is threatening. The new virus COVID19 is a sub group of coronaviruses. Such viruses are spike and cause few like diseases (SARS, MERS, and COVID19 etc.).Such viruses existed in wild animals long-ago. Long ago in 1798 Malthus wrote his famous book An Essay on the Principle of Population. He predicted that an over shooting of population over food grains production will create a pressure. This will lead to a Nature’s wrath. In the listing of wrath, Malthus mentioned some natural disasters. We thought Malthus was proved wrong by technological revolution (Lucas; 2004). However, probably he is now laughing in his grave. The push for food in Chinese Checker and the foray into the realm of wild fauna has probably ticked this virus. Now we are confronting a Malthusian wrath in a new form that pandemic of COVID19. Numerous socio-economic factors become important in the transmission, spread and mortality caused by COVID19. This short note tries to bring out the important of these factors in assessing the impact of COVID19. Whatever it may be COVID19 is teaching a lesson- a lesson to live in harmony with Nature. Are we prepared to learn this lesson? Or else our fate would be like dinosaurs in the remote past. It is this haunting reality that COVID19 forces us to learn. |
| Keywords: | Malthusian economics, man-land ratio, economic losses, inequality of losses |
| JEL: | Q50 Q51 Q54 Q56 Q57 |
| Date: | 2020–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99227&r=all |