nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2020‒05‒25
five papers chosen by
Matthew Baker
City University of New York

  1. Intelligence, Errors and Strategic Choices in the Repeated Prisoners Dilemma By Eugenio Proto; Aldo Rustichini; Andis Sofianos
  2. The love for children hypothesis and the multiplicity of fertility rates By Paolo Melindi-Ghidi; Thomas Seegmuller
  3. Culture and Market: A Macroeconomic Tale of Two Institutions By Mausumi Das; Priyanka Arora
  4. The Creation of Social Norms under Weak Institutions By Diekert, Florian; Eymess, Tillmann; Luomba, Joseph; Waichman, Israel
  5. Responding to (Un)Reasonable Requests by an Authority By Pelligra, Vittorio; Reggiani, Tommaso; Zizzo, Daniel John

  1. By: Eugenio Proto; Aldo Rustichini; Andis Sofianos
    Abstract: A large literature in behavioral economics has emphasized in the last decades the role of individual differences in social preferences (such as trust and altruism) in influencing behavior in strategic environments. Here we emphasize the role of attention and working memory, and show that social interactions among heterogeneous groups are mediated by differences in cognitive skills. Our design uses a repeated prisoner’s dilemma; we compare rates of cooperation in groups of subjects separated according to their IQ, with those in integrated groups, where subjects of different IQ are pooled together. In integrated groups we observe higher aggregated cooperation rates and profits than in separated groups. There are gains in earnings among lower IQ subjects who learn how to cooperate faster than when they play separately, and smaller losses for higher IQ subjects. We also see that higher IQ subjects become less lenient when they are matched with lower IQ subjects than when they play separately. This pattern is an instance of a general phenomenon, which we demonstrate in an evolutionary game theory model, in which higher IQ among subjects induces –possibly thanks to better working memory– a lower frequency of errors in strategy implementation. We show that players indeed choose less-lenient strategies in environments in which subjects have higher error rates. Estimations of errors and strategies from the experimental data are consistent with the hypothesis and model’s predictions.
    Keywords: Repeated Prisoners Dilemma, Cooperation, Intelligence, IQ, Strategy, Error in Transition
    JEL: C73 C91 C92
    Date: 2020–03
  2. By: Paolo Melindi-Ghidi (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Thomas Seegmuller (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fundamentals , preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expectations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.
    Keywords: Fertility,Love for Children,Expectations,Endogenous Growth,Bal- anced Growth Path
    Date: 2019–08
  3. By: Mausumi Das (Department of Economics, Delhi School of Economics); Priyanka Arora (Delhi School of Economics)
    Abstract: In this paper we model endogenous evolution of cultural traits which is mediated through market, and examine its impact on long run economic growth. Historically culture has played an important role in the process of economic development. Yet, economic development itself impacts upon the pre-existing cultural values and beliefs. We interact culture with market and show that such interaction may generate multiple growth trajectories depending on the initial distribution of cultural traits in the economy. In particular, an economy may end up in a culture-induced low growth trap in the long run. We also show that over time, with economic development, culture takes a back seat but its initial influence continues to impact long run outcomes.
    JEL: Z13 O11 D90
    Date: 2020–04
  4. By: Diekert, Florian; Eymess, Tillmann; Luomba, Joseph; Waichman, Israel
    Abstract: Preventing overfishing at Lake Victoria is a typical situation where policies have to rely on norm-based interventions to improve outcomes. Our lab-in-the-field experiment studies how information about high or low levels of previous cooperation affects the creation of social norms in a three-player prisoner’s dilemma game with/without a feedback mechanism. The provision of social information succeeds in creating norms of cooperation only if a feedback mechanism is available. Without feedback, social information cannot prevent the decline of cooperation rates. Exploring the role of the reference network, we find that the effect increases with social proximity among participants.
    Keywords: common pool resource; collective action; social norms; lab-in-the-field experiment
    Date: 2020–05–14
  5. By: Pelligra, Vittorio; Reggiani, Tommaso (Cardiff Business School); Zizzo, Daniel John (University of Queensland)
    Abstract: We consider the notions of static and dynamic reasonableness of requests by an authority in a trust game experiment. The authority, modelled as the experimenter, systematically varies the experimental norm of what is expected from trustees to return to trustors, both in terms of the level of each request and in terms of the sequence of the requests. Static reasonableness matters in a self-biased way, in the sense that low requests justify returning less, but high requests tend to be ignored. Dynamic reasonableness also matters, in the sense that, if requests keep increasing, trustees return less compared to the same requests presented in random or decreasing order. Requests never systematically increase trustworthiness but may decrease it.
    Keywords: trust; trustworthiness; authority; reasonableness; moral wiggle room; moral licensing
    JEL: C91 D01 D03 D63
    Date: 2020–05

This nep-evo issue is ©2020 by Matthew Baker. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.