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on Evolutionary Economics |
| By: | Chiara Aina (Universitat Pompeu Fabra); Florian H. Schneider (Department of Economics, University of Copenhagen) |
| Abstract: | We study how individuals update their beliefs in the presence of competing datagenerating processes, or models, that could explain observed data. Through experiments, we identify the weights participants assign to different models and find that the most common updating rule gives full weight to the model that best fits the data. While some participants assign positive weights to multiple models—consistent with Bayesian updating—they often do so in a systematically biased manner. Moreover, these biases in model weighting frequently lead participants to become more certain about a state regardless of the data, violating a core property of Bayesian updating. |
| Keywords: | Belief Updating, Narratives, Mental Models, Experiments |
| JEL: | D83 D9 C90 |
| Date: | 2025–03–17 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2504 |
| By: | Konovalov, Arkady (University of Birmingham); Luzyanin, Daniil (University of Birmingham); Popov, Sergey V. (Cardiff Business School, Cardiff University) |
| Abstract: | Experiment participants in a social dilemma game choose cooperation over defection, even though neither is more beneficial. High levels of cooperation cannot be explained by favorable labels for actions, collusion, k-level reasoning, quantal response behavior, or misplaced optimism about others’ actions, but can be rationalized by the Charness and Rabin (2002) preference model. However, cooperation rates fall with changes in payoffs, which cannot be explained by the standard formulation; to account for these results, we introduce a generalization of the model. |
| Keywords: | cooperation; coordination; social preferences |
| JEL: | C7 C9 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2025/10 |
| By: | Almås, Ingvild (Dept. of Economics, Norwegian School of Economics and Business Administration); Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | This paper provides global evidence on the nature of inequality acceptance, based on a large-scale experimental study with more than 65, 000 individuals across 60 countries. We show that, across the world, the source of inequality matters substantially more for inequality acceptance than the cost of redistribution. However, fairness views vary significantly across countries, largely reflecting disagreement over whether inequality caused by luck is fair. The meritocratic fairness view is most prevalent in the Western world, but substantial support for the libertarian and egalitarian fairness views exists in many countries. Focusing on beliefs, we further show that, globally, people believe luck plays a greater role than merit in shaping inequality, while disagreement about the cost of redistribution is more pronounced. Finally, we establish that both fairness views and beliefs about the source of inequality are key to understanding policy attitudes and cross-country variation in government redistribution, whereas efficiency considerations play a less important role. |
| Keywords: | Inequality acceptance; fairness views; economic inequality |
| JEL: | J18 J71 |
| Date: | 2025–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2025_006 |