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on Evolutionary Economics |
| By: | Uwe Sunde (University of Munich, Department of Economics); Thomas Dohmen (University of Bonn, Department of Economics); Benjamin Enke (Harvard University, Department of Economics); Armin Falk (Institute on Behavior and Inequality (briq) and University of Bonn); David Huffman (University of Pittsburgh, Department of Economics) |
| Abstract: | This paper studies the relationship between patience and comparative development through a combination of reduced-form analyses and model estimations. Based on a globally representative dataset on time preference in 76 countries, we document two sets of stylized facts. First, patience is strongly correlated with both per capita income and the accumulation of physical capital, human capital and productivity. These correlations hold across countries, subnational regions, and individuals. Second, the quantitative magnitude of the patience elasticity strongly increases in the level of aggregation. To provide an interpretive lens for these patterns, we analyze an OLG model in which savings and education decisions are endogenous to patience, and aggregate production is characterized by capital-skill complementarities. This model reconciles both the correlations between patience and macroeconomic variables as well as the substantial amplification of patience elasticities at higher levels of aggregation. The results of model estimations resemble the reduced-form patterns and suggest that cross-country variation in productivity plays an important role in generating the observed comparative development patterns and aggregation effects |
| Keywords: | Time Preference, Comparative Development, Factor Accumulation |
| JEL: | D03 D90 O10 O30 O40 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:035&r=all |
| By: | Si Chen; Carl Heese |
| Abstract: | Individuals can often inquire about how their decisions would affect others. When do they stop the inquiry if one of their options is preferred based on a selfish motive but is potentially in conflict with social motives? Using a laboratory experiment, we provide causal evidence that having a selfishly preferred option makes individuals more likely to continue the inquiry when the information received up to that point predominantly suggests that the selfish behavior harms others. In contrast, when the information received up to that point predominantly suggests that being selfish harms nobody, individuals are more likely to stop acquiring information. We propose a theoretical model drawing on the Bayesian persuasion model of (Kamenica and Gentzkow, 2011). The model shows that the information acquisition strategy documented in our experiment can be optimal for a Bayesian agent who values the belief of herself not harming others but attempts to persuade herself to behave self-interestedly. The model predicts that strategic information acquisition motivated by self-interest can reduce the decisions' resulting negative externalities and improve the welfare of the affected others. Our laboratory experiment indeed confirms this prediction. |
| Keywords: | Motivated Beliefs, Social Preferences, Information Preferences, Bayesian Persuasion, Belief Utility |
| JEL: | D90 D91 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_223&r=all |
| By: | Edi Karni (Johns Hopkins University); Marie-Louise Vierø (Queen's University) |
| Abstract: | This paper introduces measures of overall incompleteness of preference relations under risk and uncertainty, as well as measures of incompleteness of beliefs and tastes. These measures are used to define "more incomplete than" relations among different preference relations. We show how greater incompleteness is manifested in the representations of decision makers' preferences and illustrate its behavioral implications. In addition, the paper introduces incentive compatible schemes of eliciting the degrees of overall incompleteness and those of beliefs and tastes. |
| Keywords: | Incomplete Preferences, Knightian Uncertainty, Comparative Incompleteness, Elicitation Mechanisms |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1443&r=all |
| By: | Dobromir Rahnev; Kobe Desender; Alan Lee; William Adler; David Aguilar-Lleyda; Başak Akdoğan; Polina Arbuzova; Lauren Atlas; Fuat Balcı; Ji Won Bang; Indrit Bègue; Damian Birney; Timothy Brady; Joshua Calder-Travis; Andrey Chetverikov; Torin Clark; Karen Davranche; Rachel Denison; Troy Dildine; Kit Double; Yalçın Duyan; Nathan Faivre; Kaitlyn Fallow; Elisa Filevich; Thibault Gajdos; Regan Gallagher; Vincent de Gardelle (CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Sabina Gherman; Nadia Haddara; Marine Hainguerlot; Tzu-Yu Hsu; Xiao Hu; Iñaki Iturrate; Matt Jaquiery; Justin Kantner; Marcin Koculak; Mahiko Konishi; Christina Koß; Peter Kvam; Sze Chai Kwok; Maël Lebreton; Karolina Lempert; Chien Ming Lo; Liang Luo; Brian Maniscalco; Antonio Martin; Sébastien Massoni; Julian Matthews; Audrey Mazancieux; Daniel Merfeld; Denis O’hora; Eleanor Palser; Borysław Paulewicz; Michael Pereira; Caroline Peters; Marios Philiastides; Gerit Pfuhl; Fernanda Prieto; Manuel Rausch; Samuel Recht; Gabriel Reyes; Marion Rouault; Jérôme Sackur; Saeedeh Sadeghi; Jason Samaha; Tricia Seow; Medha Shekhar; Maxine Sherman; Marta Siedlecka; Zuzanna Skóra; Chen Song; David Soto; Sai Sun; Jeroen van Boxtel; Shuo Wang; Christoph Weidemann; Gabriel Weindel; Michał Wierzchoń; Xinming Xu; Qun Ye; Jiwon Yeon; Futing Zou; Ariel Zylberberg |
| Abstract: | Understanding how people rate their confidence is critical for the characterization of a wide range of perceptual, memory, motor and cognitive processes. To enable the continued exploration of these processes, we created a large database of confidence studies spanning a broad set of paradigms, participant populations and fields of study. The data from each study are structured in a common, easy-to-use format that can be easily imported and analysed using multiple software packages. Each dataset is accompanied by an explanation regarding the nature of the collected data. At the time of publication, the Confidence Database (which is available at https://osf.io/s46pr/) contained 145 datasets with data from more than 8,700 participants and almost 4 million trials. The database will remain open for new submissions indefinitely and is expected to continue to grow. Here we show the usefulness of this large collection of datasets in four different analyses that provide precise estimations of several foundational confidence-related effects. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-02958766&r=all |
| By: | Wen-Juan Xu; Chen-Yang Zhong; Fei Ren; Tian Qiu; Rong-Da Chen; Yun-Xin He; Li-Xin Zhong |
| Abstract: | In nature and human societies, the effects of homogeneous and heterogeneous characteristics on the evolution of collective behaviors are quite different from each other. It is of great importance to understand the underlying mechanisms of the occurrence of such differences. By incorporating pair pattern strategies and reference point strategies into an agent-based model, we have investigated the coupled effects of heterogeneous investment strategies and heterogeneous risk tolerance on price fluctuations. In the market flooded with the investors with homogeneous investment strategies or homogeneous risk tolerance, large price fluctuations are easy to occur. In the market flooded with the investors with heterogeneous investment strategies or heterogeneous risk tolerance, the price fluctuations are suppressed. For a heterogeneous population, the coexistence of investors with pair pattern strategies and reference point strategies causes the price to have a slow fluctuation around a typical equilibrium point and both a large price fluctuation and a no-trading state are avoided, in which the pair pattern strategies push the system far away from the equilibrium while the reference point strategies pull the system back to the equilibrium. A theoretical analysis indicates that the evolutionary dynamics in the present model is governed by the competition between different strategies. The strategy that causes large price fluctuations loses more while the strategy that pulls the system back to the equilibrium gains more. Overfrequent trading does harm to one's pursuit for more wealth. |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2010.08962&r=all |