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on Evolutionary Economics |
| By: | Ernst ⓡ Fehr; Thomas ⓡ Epper; Julien ⓡ Senn; Ernst Fehr |
| Abstract: | Parsimony is a desirable feature of economic models but almost all human behaviors are characterized by vast individual variation that appears to defy parsimony. How much parsimony do we need to give up to capture the fundamental aspects of a population’s distributional preferences and to maintain high predictive ability? Using a Bayesian nonparametric clustering method that makes the trade-off between parsimony and descriptive accuracy explicit, we show that three preference types—an inequality averse, an altruistic and a predominantly selfish type—capture the essence of behavioral heterogeneity. These types independently emerge in four different data sets and are strikingly stable over time. They predict out-of-sample behaviour equally well as a model that permits all individuals to differ and substantially better than a representative agent model and a state-of-the-art machine learning algorithm. Thus, a parsimonious model with three stable types captures key characteristics of distributional preferences and has excellent predictive power. |
| Keywords: | distributional preferences, altruism, inequality aversion, preference heterogeneity, stability, out-of-sample prediction, parsimony, Bayesian nonparametrics |
| JEL: | D31 D63 C49 C90 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10727&r=evo |
| By: | Vojtěch Bartoš; Ian Levely; Vojtech Bartos |
| Abstract: | For the past two decades, studies measuring social preferences in developing settings have played an important role in building our understanding of economic development and poverty. This book chapter reviews lab-in-the-field experiments that measure social preferences, summarizes categories of social preferences, the standard experimental games that have been developed to test them, and why they are of interest to development economists. We describe experimental methodology adapted for developing contexts, give an overview of some recent advances in measuring social preferences in developing settings, we comment on the external validity of standard experimental games, and discuss unincentivized measures of social preferences. Finally, we review studies that explain variations in social preferences between and within individuals, with a focus on environmental factors. We comment on possible paths forward. |
| Keywords: | social preferences, development economics, measurement, experimental methodology |
| JEL: | A33 B41 C90 D90 O12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10744&r=evo |
| By: | Daron Acemoglu; Ali Makhdoumi; Azarakhsh Malekian; Asuman Ozdaglar |
| Abstract: | We build a model of online behavioral manipulation driven by AI advances. A platform dynamically offers one of n products to a user who slowly learns product quality. User learning depends on a product’s “glossiness, ’ which captures attributes that make products appear more attractive than they are. AI tools enable platforms to learn glossiness and engage in behavioral manipulation. We establish that AI benefits consumers when glossiness is short-lived. In contrast, when glossiness is long-lived, users suffer because of behavioral manipulation. Finally, as the number of products increases, the platform can intensify behavioral manipulation by presenting more low-quality, glossy products. |
| JEL: | D83 D90 D91 L86 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31872&r=evo |