nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2022‒09‒05
four papers chosen by
Matthew Baker
City University of New York

  1. Looming Large or Seeming Small? Attitudes Towards Losses in a Representative Sample By Jonathan Chapman; Erik Snowberg; Stephanie W. Wang; Colin Camerer
  2. Mistaking Noise for Bias - Victimhood and Hutu-Tutsi Reconciliation in East Africa By Arthur Blouin; Sharun W. Mukand; Sharun Mukand
  3. Ancestral Livelihoods and Moral Universalism: Evidence from Transhumant Pastoralist Societies By Etienne Le Rossignol; Sara Lowes
  4. Cooperation, competition, and welfare in a matching market By Bester, Helmut; Sákovics, József

  1. By: Jonathan Chapman; Erik Snowberg; Stephanie W. Wang; Colin Camerer
    Abstract: We measure individual-level loss aversion using three incentivized, representative surveys of the U.S. population (combined N=3,000). We find that around 50% of the U.S. population is loss tolerant, with many participants accepting negative-expected-value gambles. This is counter to earlier findings—which mostly come from lab/student samples—and expert predictions that 70-90% of participants are loss averse. Consistent with the difference between our study and the prior literature, loss aversion is more prevalent in people with high cognitive ability. Loss-tolerant individuals are more likely to report recent gambling and to have experienced financial shocks. These results support the general hypothesis that individuals value gains and losses differently, although the tendency in a large proportion of the population to emphasize gains over losses is an overlooked behavioral phenomenon.
    JEL: C81 C9 D03 D81 D9
    Date: 2022–07
  2. By: Arthur Blouin; Sharun W. Mukand; Sharun Mukand
    Abstract: The difficulty in resurrecting inter-ethnic cooperation in the aftermath of violence and genocide is one of the biggest challenges facing post-conflict societies. Using experimental data from post-genocide Rwanda and Burundi, this paper shows that an unwarranted tendency to blame others for negative outcomes is a behavioural barrier that makes reconciliation difficult. We show that individuals systematically (and mistakenly) blame accidental negative shocks (noise) to the deliberate intent of individuals (bias). This “victimhood bias” wherein individuals ascribe noise to bias is much larger for (a) individuals for whom ethnic identity is salient; (b) for those who have had greater exposure to inter-ethnic violence. Further, we observe that both inter-ethnic contact and economic development are associated with a decline in this victimhood bias. Finally, those with a lower victimhood bias are more likely to behave cooperatively in inter-ethnic rela-tionships. Our results suggest that insurance agreements that limit negative shocks and reduce noise, can encourage reconciliation by mitigating feelings of victimhood.
    Keywords: noise, bias, victim, conflict, reconciliation, attribution
    JEL: D71 D74
    Date: 2022
  3. By: Etienne Le Rossignol; Sara Lowes
    Abstract: Moral universalism, the extent to which individuals exhibit similar altruism and trust towards in-group and out-group members, varies widely across societies. We test the hypothesis from anthropology that the requirements of transhumant pastoralism – a livelihood in which populations seasonally migrate and herd livestock – made individuals highly interdependent and cohesive within groups but hostile to individuals beyond the radius of extended kin. Using global data, we find that historical reliance on transhumant pastoralism is strongly predictive of greater in-group relative to out-group trust. This result is consistent across countries, between residents of the same country, among second-generation migrants, and with an instrumental variable strategy. We find evidence that these results are specific to transhumant pastoralism. The effects are particularly pronounced when transhumant pastoralists interact with groups that rely on other forms of economic production and in areas that are prone to climate shocks and conflict. Finally, we explore the economic implications of limited moral universalism. We find that greater reliance on transhumant pastoralism is associated with less objective promotion criteria within firms and smaller firm size.
    JEL: N9 O1 Z1 Z10
    Date: 2022–07
  4. By: Bester, Helmut; Sákovics, József
    Abstract: We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out, however, that a reduction in matching frictions also increases welfare because more agents find themselves in a cooperative relationship. We characterize the conditions for which increasing competition increases overall welfare. In particular, this is always the case when the incentives for defection are high.
    Keywords: Cooperation,Prisoner's Dilemma,Competition,Welfare,Matching,Trust Building
    JEL: C72 C73 C78 D6
    Date: 2022

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