nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2021‒04‒19
eleven papers chosen by
Matthew Baker
City University of New York

  1. The Volunteer's Dilemma in Finite Populations By Kai A. Konrad; Florian Morath
  2. How Experiments with Children Inform Economics By John List; Ragan Petrie; Anya Samek
  3. Georgia Leads in Prosociality: Comparison to Cross-Cultural Economic Experiment By Mekvabishvili, Rati
  4. Conservative Updating By Matthew Kovach
  5. An evolutionary view on the emergence of Artificial Intelligence By Matheus E. Leusin; Bjoern Jindra; Daniel S. Hain
  6. I win it's fair, you win it's not. Selective heeding of merit in ambiguous settings By Serhiy Kandul; Olexandr Nikolaychuk
  7. Variation in primate decision-making under uncertainty and the roots of human economic behaviour By Francesca de Petrillo; Alexandra Rosati
  8. Homophily, Peer Effects, and Dishonesty By Liza Charroin; Bernard Fortin; Marie Villeval
  9. The Distribution of Ambiguity Attitudes By Hans-Martin von Gaudecker; Axel Wogrolly; Christian Zimpelmann
  10. Measuring Human Development for the Anthropocene By Ajay Chhibber
  11. Self-Serving Biases in Beliefs about Collective Outcomes By Shimon Kogan; Florian H. Schneider; Roberto A. Weber

  1. By: Kai A. Konrad; Florian Morath
    Abstract: We study the long-run stochastic stability properties of volunteering strategies in finite populations. We allow for mixed strategies, characterized by the probability that a player may not volunteer. A pairwise comparison of evolutionary strategies shows that the strategy with a lower probability of volunteering is advantaged. However, in the long run there are also groups of volunteering types. Homomorphisms with the more volunteering types are more frequent if the groups have fewer members, and if the benefits from volunteering are larger. Such homomorphisms with volunteering cease to exist if the group becomes infinitely large. In contrast, the disadvantage of volunteering disappears if the ratio of individual benefits and costs of volunteering becomes infinitely large.
    Keywords: Volunteering, stochastic stability, finite populations, mixed strategies, collective action
    JEL: C73 D62 H41
    Date: 2020–12
  2. By: John List; Ragan Petrie; Anya Samek
    Abstract: In the past several decades the experimental method has lent deep insights into economics. One surprising area that has contributed is the experimental study of children, where advances as varied as the evolution of human behaviors that shape markets and institutions to how early life influences shape later life outcomes have been explored. We first develop a framework for economic preference measurement that provides a lens into how to interpret data from experiments with children. Next, we survey work that provides general empirical insights within our framework. Finally, we provide 10 tips for pulling off experiments with children, including factors such as taking into account child competencies, causal identification, and logistical issues related to recruitment and implementation. We envision the experimental study of children as a high growth research area in the coming decades as social scientists begin to more fully appreciate that children are active participants in markets who (might) respond predictably to economic incentives.
    Date: 2021
  3. By: Mekvabishvili, Rati
    Abstract: Recent experimental economic research highlights the importance of Altruism and prosociality in many economic relations. Our experiment replicates the cross-cultural public goods game experiment conducted in 16 different countries by (Herrmann, Thöni, and Gächter 2008). We find that the mean contributions in standard public goods experiment with voluntary contribution in Tbilisi participant pool appears the highest compared to 16 experiment participant pool of different countries. Moreover, our experimental results show surprisingly flat pattern of mean contributions, indicating on strong evidence of altruism and prosociality. Individual level experimental data tentatively suggests, the repeated game incentives and considerable portion of altruism seems to reinforce each other and motivate subjects' genuine generosity reputation building, as it is a distinct and esteemed character of Georgian culture. In our view, our results of strong evidence of altruism contributes to the cross-cultural economic research of human cooperation.
    Keywords: Prosociality, Altruism, Culture, Human cooperation, Public Goods Experiment
    JEL: C92 H41
    Date: 2021–03–23
  4. By: Matthew Kovach
    Abstract: This paper provides a behavioral analysis of conservatism in beliefs. I introduce a new axiom, Dynamic Conservatism, that relaxes Dynamic Consistency when information and prior beliefs "conflict." When the agent is a subjective expected utility maximizer, Dynamic Conservatism implies that conditional beliefs are a convex combination of the prior and the Bayesian posterior. Conservatism may result in belief dynamics consistent with confirmation bias, representativeness, and the good news-bad news effect, suggesting a deeper behavioral connection between these biases. An index of conservatism and a notion of comparative conservatism are characterized. Finally, I extend conservatism to the case of an agent with incomplete preferences that admit a multiple priors representation.
    Date: 2021–01
  5. By: Matheus E. Leusin; Bjoern Jindra; Daniel S. Hain
    Abstract: This paper draws upon the evolutionary concepts of technological relatedness and knowledge complexity to enhance our understanding of the long-term evolution of Artificial Intelligence (AI). We reveal corresponding patterns in the emergence of AI - globally and in the context of specific geographies of the US, Japan, South Korea, and China. We argue that AI emergence is associated with increasing related variety due to knowledge commonalities as well as increasing complexity. We use patent-based indicators for the period between 1974-2018 to analyse the evolution of AI's global technological space, to identify its technological core as well as changes to its overall relatedness and knowledge complexity. At the national level, we also measure countries' overall specialisations against AI-specific ones. At the global level, we find increasing overall relatedness and complexity of AI. However, for the technological core of AI, which has been stable over time, we find decreasing related variety and increasing complexity. This evidence points out that AI innovations related to core technologies are becoming increasingly distinct from each other. At the country level, we find that the US and Japan have been increasing the overall relatedness of their innovations. The opposite is the case for China and South Korea, which we associate with the fact that these countries are overall less technologically developed than the US and Japan. Finally, we observe a stable increasing overall complexity for all countries apart from China, which we explain by the focus of this country in technologies not strongly linked to AI.
    Date: 2021–01
  6. By: Serhiy Kandul (Digital Society Initiative, University of Zurich, Switzerland); Olexandr Nikolaychuk (Faculty of Economics and Business Administration, Friedrich Schiller University Jena, Germany)
    Abstract: One's willingness to accept an outcome or even to correct it depends on whether or not the underlying procedure is deemed legitimate. We manipulate the role allocation procedure in the dictator game to illustrate that this belief is not independent of the outcome and is self-serving in its nature. Our findings suggest that there may be some positive level of dissatisfaction with virtually any social outcome in the populace without there being anything wrong as far as the underlying procedure. We also discuss the perceptions of fairness and merit as potential drivers of the observed behavioral phenomenon.
    Keywords: fairness, entitlement, merit, redistribution, procedural preferences, dictator game
    JEL: D63 D91
    Date: 2021–01–25
  7. By: Francesca de Petrillo (IAST - Institute for Advanced Study in Toulouse); Alexandra Rosati (University of Michigan [Ann Arbor] - University of Michigan System)
    Abstract: Uncertainty is a ubiquitous component of human economic behaviour, yet people can vary in their preferences for risk across populations, individuals and different points in time. As uncertainty also characterizes many aspects of animal decision-making, comparative research can help evaluate different potential mechanisms that generate this variation, including the role of biological differences or maturational change versus cultural learning, as well as identify human-unique components of economic decision-making. Here, we examine decision-making under risk across non-human primates, our closest relatives. We first review theoretical approaches and current methods for understanding decision-making in animals. We then assess the current evidence for variation in animal preferences between species and populations, between individuals based on personality, sex and age, and finally, between different contexts and individual states. We then use these primate data to evaluate the processes that can shape human decision-making strategies and identify the primate foundations of human economic behaviour.
    Keywords: non-human primates,risk,economic behaviour,individual variation,cooperation
    Date: 2021
  8. By: Liza Charroin (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne); Bernard Fortin (CIRPEE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi [Montréal] - UQAM - Université du Québec à Montréal = University of Québec in Montréal, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Marie Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics)
    Abstract: If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers; homophily, that is, the tendency of people to bond with similar others; or both? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect..
    Keywords: Peer Effects,Homophily,Dishonesty,Self-Selection Bias
    Date: 2021–04–01
  9. By: Hans-Martin von Gaudecker; Axel Wogrolly; Christian Zimpelmann
    Abstract: This paper analyses the stability and distribution of ambiguity attitudes using a broad population sample. We employ four waves of data from a survey instrument with high-powered incentives. Structural estimation of random utility models yields three individual-level parameters: Ambiguity aversion, likelihood insensitivity or perceived level of ambiguity, and the variance of decision errors. We demonstrate that these parameters are very heterogeneous but fairly stable over time and across domains. These contexts span financial markets—our main application—and climate change. The ambiguity parameters are interdependent in their interpretation and the precision of their estimates depends on decision errors. To describe heterogeneity in these three dimensions, we adopt a discrete classification approach. A third of our sample comes rather close to the behaviour of expected utility maximisers. Half of the sample is characterized by a high likelihood insensitivity, with thirty per cent ambiguity-averse and twenty per cent making ambiguity-seeking choices for most events. For the remaining eighteen per cent, we estimate sizeable error parameters, which implies that no robust conclusions about their ambiguity attitudes are possible. Predicting group membership with a large number of observed characteristics shows reasonable patterns.
    Date: 2021–04
  10. By: Ajay Chhibber (George Washington University)
    Abstract: This paper makes the case for an adjusted Human Development Index (HDI) that adds sustainability, vulnerability and human security to the existing HDI components of income, health and education. It shows that these additional elements were part of the discourse in many original writings on human development. They are also central in any discourse on development today. The HDI has made progress by adding gender and inequality in its formulations, but is more reflective of the Millennium Development Goal (MDG) agenda than the more comprehensive Sustainable Development Goals (SDGs) agreed in 2015. The paper reviews existing indicators and suggests a way towards an adjusted HDI. It shows that above an HDI level of 0.8, the cut-off for very high human development, major trade-offs emerge with ecology. It argues for incorporating ecological and human security variables into the HDI, and creating a vulnerability-adjusted HDI that measures resilience to ecological, health and economic shocks, akin to the Inequality-adjusted HDI.
    Date: 2021–06
  11. By: Shimon Kogan; Florian H. Schneider; Roberto A. Weber
    Abstract: Beliefs about collective outcomes, such as economic growth or firm profitability, play an important role in many contexts. We study biases in the formation of such beliefs. Specifically, we explore whether over-optimism and self-serving biases in information processing—documented for beliefs about individual outcomes—affect beliefs about collective outcomes. We find that people indeed exhibit self-serving biases for collective outcomes, and that such biases are similar to biases for individual outcomes. In addition, we investigate whether collective self-delusion is mitigated by market institutions. If anything, biases in information processing are more pronounced in the presence of a market.
    Keywords: beliefs, Bayes’ rule, asymmetric updating, overconfidence, motivated reasoning
    JEL: I18 C93 Z13
    Date: 2021

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